Now that we already understand that Contractor Management is the set of best practices and standards that assist in controlling and monitoring contracted companies, we will address how to manage them efficiently and assertively. Each business has its own specificities and challenges; however, it is possible to outline 5 steps to achieve excellence in Contractor Management:
1 – Supplier Qualification
Apply criteria for hiring your partners, service providers, and contractors that align with your company's values, focused on validating ethical business practices, anti-corruption policies, environmental and social impact, as well as the financial and reputational analyses of these suppliers.
2 – Classify your third parties
Identifying and classifying third parties according to their importance and risk to the company is essential. Some third parties may pose high criticality to business operations, while others may be less critical.
This classification determines which third parties require closer attention and more management, and which can be managed with less rigor.
3 – Definition of documents
Now that your third parties are properly classified according to their level of criticality, it becomes easier to identify which risks need to be monitored. For example, labor risks (payment of wages, additional allowances, payroll taxes, vacations, etc.) and/or Occupational Health and Safety risks (compliance with regulatory standards, certifications, specific medical and laboratory tests, PPE control, etc.).
4 – Document analysis
A designated professional with technical knowledge and skills is required to perform document auditing regarding third parties' labor and OHS compliance, thereby identifying potential legal and safety risks. In addition to identifying issues, it is also necessary to guide the non-compliant supplier in taking corrective action.
5 – Frequency and Management Overview
Documentary monitoring in Contractor Management must be conducted monthly, providing visibility into which suppliers are complying with legal and tax obligations and which are non-compliant and pose risks to your company's business.
The Supplier Risk Matrix and the BI dashboards for deliverables and document pending issues are excellent management-level tools for decision-making.
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Article written by: Suédma Oliveira, Management Operations Manager at Level
