Selecting a contractor goes beyond finding a company that provides the lowest bid. Many contractors can offer a low bid and complete a project on time. However, it is imperative to consider a contractor’s safety performance to prevent adverse events like accidents during a project. Accidents can be detrimental to a project’s success as they carry overwhelming costs. According to the National Safety Council, work injuries cost employers 170.8 billion dollars in 2018. The cost of an accident is split into two categories, direct and indirect. Conservative estimates show $3 of indirect cost for every $1 of direct costs for accidents. Direct costs include workers’ compensation payments, medical expenses, and legal services.
Examples of indirect costs include lost productivity, equipment and property damages, accident investigation, training replacement employees, implementation of corrective measures and costs associated with lower employee morale and absence.
It is essential to look beyond the lowest priced contractor and select one that values safety. Unsafe contractors can often result in worker injuries, unnecessary delays, lost productivity and associated costs. It is unlikely to have a safe project if you start with a contractor that was selected as the lowest bidder as the primary criteria. Some companies cut back on safety because it’s considered too expensive. New PPE might not be in the budget, or there could be too much work needed to stop production and squeeze in safety training. But that’s shortsighted.
Assessing a contractor’s true price generally involves assessing their safety performance to make sure they are the best solution for a project. There are four elements to look at when selecting a contractor that places a high value on safety: The Experience Modification Rate (EMR), OSHA Data, their overall Safety Program and ultimately their Safety Culture. Too many people only look at the first three but do not pay enough attention to the companies’ culture toward safety. This culture is the true buy-in, it’s what actually happens and how safety is actually treated. It’s the only true measure, the rest of the contractors can be dishonest by not reporting. The culture doesn’t lie. The way to tell the culture is to truly spend some time with the contractor on a trial project or something short term, by auditing and visiting the crew and ownership. Another important aspect is the ownership and management team, do they perform routine safety audits, do they buy into safety? Is it a checkbox or a way of life? The other criteria, such as the EMR is a reflection of their worker’s compensation loss history compared to other contractors. OSHA data consists of Lost Time and Recordable Incidence Rates and OSHA 300 logs. Contractors who have a comprehensive safety program in place and in-house safety officers who conduct inspections will most likely place a high value on safety.
Contractors that value safety are rarely the cheapest but often the best choice.
Ultimately, the best value contractor ends up being your most cost-effective choice. It’s this contractor whose price is fair but not cheap, who values safety and training and who puts dollars and time behind their culture that will ultimately give you the best overall cost and experience.