- Operational risk is the loss resulting from inadequate or failed internal processes, people, and systems, or from external events.
- In the context of contractor safety, operational risk can refer to any failure or breakdown in the systems and processes that are in place to ensure safe operations.
- Examples of operational risk in contractor safety include inadequate training or supervision, insufficient communication, faulty equipment or tools, poor maintenance, and ineffective hazard identification.
- To effectively manage operational risk in contractor safety, organizations must first identify and assess potential shortfalls.
- Organizations can use a variety of methods to identify operational risk, including risk assessments, safety audits, and incident investigations.
- Once risks have been identified, organizations can implement strategies to effectively manage their contractor safety efforts.
- Strategies to manage operational risk may include developing robust safety policies and procedures, safety training, conducting regular safety inspections, encouraging open communication, providing appropriate equipment and tools, ensuring consistent application of safety procedures, and monitoring and evaluating safety performance.
- Effective management of operational risk in contractor safety requires a culture of safety that is embraced by all workers and contractors.
What is Operational Risk?
Operational risk is the risk of loss resulting from inadequate or failed internal processes, people, and systems, or from external events. In the context of contractor safety, operational risk can refer to any failure or breakdown in the systems and processes that are in place to ensure safe operations pertaining to your third party workforce.
Examples of operational risk in contractor safety may include inadequate training or supervision, insufficient communication, faulty equipment or tools, poor maintenance, and ineffective hazard identification and management. These failures can lead to accidents, injuries, and even fatalities, as well as damage to equipment, facilities, and the environment. Simply put, operational risk is plain bad for business.
In this article, we’ll go over how you as a safety professional can take on the proactive steps to mitigate operational risk and make your workplace safer for everyone.
Identifying and Managing Operational Risk
To effectively manage operational risk in contractor safety, organizations must first identify and assess potential shortfalls. This requires a comprehensive understanding of the systems and processes that are in place to ensure safe operations and an awareness of potential failure points.
Organizations can use a variety of methods to identify operational risk, including risk assessments, safety audits, and incident investigations. These methods can help organizations identify areas where improvements are needed and develop strategies to address these areas.
Once risks have been identified, organizations can implement strategies to effectively manage their contractor safety efforts. These strategies may include:
Developing Robust Safety Policies and Procedures:
Organizations should have clearly defined safety policies and procedures that are communicated to all workers and contractors. These policies should cover areas such as hazard identification and management, training requirements, emergency response protocols, and incident reporting procedures.
Providing Comprehensive Safety Training:
Organizations should provide comprehensive safety training to all workers and contractors. In addition to job specific training, the training should cover processes that teach your workforce how to deal with potential hazards, carry out safety procedures, and implement emergency response protocols in real life scenarios.
Conducting Regular Safety Inspections:
Regular safety inspections can help identify issues within your workplace and ensure that safety procedures are being followed correctly. Organizations should conduct these inspections frequently and involve workers and contractors in the process to encourage participation and feedback. Doing so will ensure that you’re able to catch any potential risks before they occur.
Encouraging Open Communication:
Organizations should encourage open communication between workers, contractors, and management, particularly regarding safety concerns. Workers and contractors should feel comfortable reporting safety issues without fear of retaliation or negative consequences. Furthermore, the workers on the floor are the ones that witness business processes firsthand, so it is important to consult with them to gain insight on the practical application of your safety efforts.
Providing Appropriate Equipment and Tools:
Organizations are legally required to provide workers and contractors with appropriate equipment and tools that are well-maintained and regularly inspected. Workers and contractors should receive training on how to use the equipment safely, what to do when a certain piece of equipment is experiencing issues, and how to go about informing management of any questions and concerns they may have.
Ensuring Consistent Application of Safety Procedures:
Organizations should ensure that safety procedures are applied consistently across all job sites and tasks. Any deviation from established procedures should be investigated and addressed immediately. Not only is this one of the most important aspects of fostering a steadfast safety culture, it is also your best bet at avoiding interventions and fines from regulating bodies. Not following required safety procedures is a surefire way to get slapped with an OSHA penalty.
Monitoring and Evaluating Safety Performance:
Management should monitor and evaluate safety performance regularly, using metrics such as incident rates, near-miss reporting, and safety observations. This can help identify areas where improvements are needed and measure the effectiveness of strategies to manage operational risk.
Managing Risk Through Technology
Once you’ve established a process in place to address operational risk, your next step is to determine how you’ll apply your strategy into a real life scenario. With the endless factors that you must account for, it’s no surprise that most safety professionals often supplement their process with technology/
Contractor Compliance is a contractor safety solution that can automate and streamline essential processes such as prequalification, document management, verification, and collection. Interested in learning more? Take a product walkthrough with one of our compliance experts to learn how you can increase accuracy, safety and productivity all while minimizing operational risk when dealing with contractors.
Operational risk is a significant factor in contractor safety, and organizations must take steps to manage this risk effectively. By identifying potential failure points, developing robust safety policies, providing comprehensive safety training, conducting safety inspections, encouraging open communication, ensuring consistent application of safety procedures, and monitoring and evaluating safety performance, organizations can minimize the room for operational risk to arise and improve contractor safety and compliance.
Effective management of operational risk in contractor safety requires a culture of safety that is embraced by all workers and contractors. By promoting a commitment to safety and a willingness to learn and improve, organizations can create a safe and productive work environment for all.