Contractor relations: safety challenges of outsourcing

A 2020 British research report from a team at Cranfield University explores safety in outsourced relationships — between client firms and subcontractors — and identifies a number of challenges that arise when attempting to maintain work health and safety standards. Such challenges include: tensions that arise between organisations during the outsourcing process and the complexities of varying regulations across countries.

Method

Three global companies across the engineering, logistics and pharmaceuticals sectors were engaged for the study, each company of which had outsourced a variety of activities — including construction and facilities management — to external, global companies. The researchers conducted a series of 60 semi-structured interviews with employees from across the organisations, representing each outsourcing relationship. The aim was to investigate safety risks and the management of safety within these relationships.

For the purposes of the study, the researchers also undertook a systematic literature review of 44 empirical studies. These reviewed studies were on the topic of outsourcing relationships, and the review was done to identify safety risk factors and safety management practices within the literature. A framework was also developed by the research team to distinguish between difficulty of the task and tasks that were core to a firm’s strategic goals, accommodating for both firm-to-firm and firm-to-individual relationships.

Findings

The researchers identified a number of challenges associated with the management of safety in outsourced relationships. These included challenges to safety that emerged when:

• working across national borders where the local legal and regulatory frameworks differed from those governing the procedures and policies that had been developed by company headquarters and were prescribed by wider company practices;
• outsourcing to a company occurred where differing expectations for monitoring safety performance existed, around reporting on near misses and safety-related incidents, for example;
• there were tensions at a board level, which could adversely affect otherwise effective and amicable relations locally, together with when agreeable board level relationships could not mitigate local antagonistic relationships;
• hard fought contract negotiations adversely affected resource availability, leading to subsequent impacts on safety performance; and
• a ‘safety dip’ at the outset of an outsourcing relationship was addressed by a transference of staff from an old to a new provider, but where this later limited improvements and innovation in safety performance.

Significance

“Outsourcing is a significant and increasingly common organisational change initiative of the modern era, occurring not only in private companies but also in public sector organisations across the globe. However, outsourcing can also introduce safety risks into an organisation,” Dr Colin Pilbeam, Reader in Safety Leadership at Cranfield University and one of the researchers on the study, said.

Regarding the significance of the study’s findings, Dr Pilbeam went on to say that the research “highlights some of the safety challenges involved in outsourcing relationships and shows many industries manage safety through a common set of practices. While this can establish an acceptable level of safety performance, there can be issues around execution in organisations. More needs to be done to understand how safety can be managed in outsourced relationships between organisations.”

The research report, titled ‘Managing safety in outsourced relationships’, was funded by the Institution of Occupational Safety and Health and is freely available at www.iosh.com/outsourcing.

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