Contractor management software is a brilliant way of managing supply chain compliance. Far from the approach of using a dated spreadsheet to manage suppliers, smart software frees up your time, keeps processes transparent and ensures you keep control of your supply chain.

Here we look at six key benefits that you can take advantage of by investing in contractor management software.

1 – Take control

Unlike standard spreadsheets and questionnaires, some software solutions allow you to formulate your company’s requirements and convey these quickly and easily to your suppliers. Introducing requirement changes, for example, is done in a controlled manner, rather than manually checking and approving the newly signed documents for every supplier.

2 – More transparency

Understanding your requirements and communicating these to your suppliers is hard enough without factoring in changes to requirements. Through some software solutions, you and your suppliers can work collaboratively, ensuring mutual understanding at all times of what is required.

3 – Better protection

When things go wrong, you need to be in a position to say why and how they went wrong. Contractor management software can allow you to track everything automatically. Look out for solutions with built-in audit trails enabling you to see the exact status of a supplier from any previous point in time.

4 – Greater efficiency

Managing, assessing and keeping on top of your supply chain’s compliance can be very time consuming. Software solutions can release you from the day-to-day managing of the compliance of your suppliers.

5 – Enhanced visibility

Accessing accurate information and up-to-date reporting can be difficult without the right tools. Some software solutions provide a real-time view of compliance, enabling you to check the current and past status of any supplier at any time.

Solution from the world leaders

Altius, the world leaders in supply chain compliance, have launched their Exigo system – designed to specifically manage compliance across the supply chain, providing a real-time, collaborative solution that will scale with your business.

With automated processes and workflows, real-time status tracking and reporting, and ready-made templates to gather supplier information on health and safety, CSR, etc. Exigo can be your complete contractor management software.

Other features

• Customisable compliance frameworks
• Automated report generation
• Document control and versioning
• Cloud-based solution
• In-built audit trail

Find out more about Altius Exigo today.

The introduction of the Modern Slavery Act in 2015 has made UK companies sit up and take notice of their supply chain more than they ever have done before. Companies have been quick to assess their supply chain, but also to ensure that they are adhering to the updated legislation with a code of conduct and an ethical procurement policy.

An ethical procurement policy must make it clear to suppliers that compliance with requirements related to the Code of Conduct is mandatory. This requirement applies not only to existing suppliers but also to supplier selection and retention. This policy will be useful to set out what the process will be when breaches are found.

A report by modern slavery charity, Walk Free Foundation, alongside the Chartered Institute of Procurement & Supply (CIPS), sheds light on the fundamentals that any ethical procurement policy should include. For companies who have yet to create a modern slavery policy, or those who would like to check the validity of their existing policy, here’s the four key areas the policy should include.

Build in systems of ‘sanctions and rewards’

Through purchasing decisions, companies have the capacity to improve the working conditions of those employed by exploitative suppliers whilst rewarding those who treat workers with dignity and respect. The report, Tackling Modern Slavery In Supply Chains, says:

“Many buyers are developing programs that reward suppliers who demonstrate particularly strong social performance. The top suppliers get preferred supplier status and are given priority for new business.”

For suppliers that fail to adhere to the policy, or provide misleading statements, punitive measures could be added to your company policy. Training and guidance should be used to help suppliers and contractors understand modern slavery – only as a last resort should you cease to work with a supplier due to their human right violations.

Discover how UK businesses are rising to the modern slavery compliance challenge across their supply chain >

Contracts and sourcing

An ethical procurement policy needs implementing, and not just putting on the shelf to collect dust. The key standards you’ve highlighted in your policy should flow through all aspects of your company’s supplier sourcing and management.

These key standards, according to the report by Walk Free Foundation, are:

• The right to request compliance related information and to audit at the discretion of, and at any time chosen by, the contract management;
• Requirements for the supplier to have adopted the labour policies of the buyer into their Code of Conduct;
• Ability of the supplier and any subcontractors to be able to demonstrate they have taken concrete steps to implement Code of Conduct;
• Key Performance Indicators (KPIs) that reflect progress towards implementing Corrective Action
• Plans and Ethical Procurement Benchmarks;
• Transparent and frequent reporting, including the results of any social audit conducted, and the status of those suppliers who have implemented new or improved human rights policies.

With regard to sourcing processes, your Code of Conduct requirements should also be built into the Request for Tender (RFT), pre-qualification questionnaire (PQQ) and other application documents you use.

It is important to ensure that these key standards then flow through all aspects of supplier sourcing and management including; your supplier contracts, tender and purchasing processes, auditing and compliance actions, and performance standards for procurement staff too.

Supplier performance targets

Another important part of a procurement policy is to set job performance objectives and targets for procurement professionals in your business, with modern day slavery in mind.

Traditional procurement focused on purchase price, safety and technical capabilities and procurement professionals are evaluated based on acquiring the best product for the best price. As the report by Walk Free Foundation says, this focus needs to change.

“Today, procurement professionals have a critical role to play in preventing modern slavery in supply chains by selecting new suppliers that have properly enforced policies and procedures against slavery and forced labour.”

By keeping ethical considerations at the forefront of purchasing decisions, procurement professionals can promote workers’ rights and decent working conditions. It is imperative that professionals are evaluated based on the successful acquisition of goods and services that are produced using ethical social criteria, as well as the traditional objectives around price and quality.

Communicating the policy effectively

Once your ethical procurement policy framework is in place, this should become the foundation on which the company builds strategy for engagement with internal and external stakeholders and suppliers.

Sharing and communicating the Code of Conduct on forced labour and modern slavery is integral to its implementation. Staff across the company will need to familiarise themselves with its vision and principles.

Of course, the most important staff members that need to fully understand the policy is your procurement and supplier management staff. But your communication shouldn’t be limited to inside the business. As the report suggests, your communication strategy should:

• Include new and existing suppliers and send them the new Code of Conduct and standards they must adhere to;
• Be added into all contracts, RFTs, PQQs as well as outline rewards and consequences associated with the updated policy;
• Policy and code of conduct should be sent to all employees internally and sessions facilitated to ensure everyone understands;
• Relevant stakeholders are aware of the company’s new policy and are aware of their responsibility towards modern slavery

Gaining procurement clarity

Rightly so, the government’s intervention on modern day slavery has meant that the need for clarity in your supply chain has never been so important. While creating an ethical procurement policy isn’t a taxing task, implementing and getting it understood by procurement staff and suppliers is the hardest part.

New Modern Day Slavery Report released

Discover how UK businesses are rising to the compliance challenge across their supply chain by downloading the inaugural Modern Day Slavery Survey 2017 Report. Featuring key findings from procurement and supply chain professionals such as poor internal policies, failing supply chains, and best practice advice to assure long-term slavery compliance.

The Modern Day Slavery Act implemented by the UK Government in 2015 was welcome news as global leaders fight to out-rule modern slavery. For business here in the UK since the Act was introduced, it has been a learning curve to first understand what is now required to meet legislation, and second to implement a code of conduct and procurement policy that safeguards the future of the business.

Within this learning curve, the nuances of what to look out for in susceptible supply chains have been identified by international groups and charities to help businesses stay compliant. The International Labour Organisation (ILO) has identified a number of indicators that constitute forced labour and all of which are covered in the Modern Slavery Act 2015. This includes:

• Abuse of vulnerability
• Deception
• Restriction of movement
• Isolation
• Physical and sexual violence
• Intimidation and threats
• Retention of identity documents
• Withholding of wages
• Abusive working and living conditions
• Debt bondage

Debt Bondage

While most of the above criteria is self-explanatory, thus making it easier to communicate the Act with your procurement team and suppliers, debt bondage is a relatively new phrase to the industry.

To aid the understanding of debt bondage, the following description from charity Walk Free Foundation should help to explain it further:

“Debt bondage is a worker pledging their labour or the labour of others under their control as security for a debt; when either the real value of the work undertaken is never applied to repayment of the debt, or the length and nature of the work that has to be undertaken is never fully defined or limited.”

To further explain Debt Bondage, the Walk Free Foundation in their report, Tackling Modern Day Slavery in Supply Chains, they used a real case study to explain how this practice works.

In South Asia, where caste-based stratifications still dominate the social landscape, many lower caste families working in the brick kilns are plagued for years, sometimes generations, by languishing debt.

“The initial debt is often incurred through loans from subcontractors which can never be repaid. The debt is then assigned to the entire family and is not nullified even in death. This means children are forced to work or take on the mounting debts of their deceased parents. Debt bondage subjugates entire families to inescapable cycles of poverty and a life of work in the brick kilns across the region.”

What can you do?

This atrocious way of employing workers, of course, needs stamping out. But identifying whether this practice is already in your supply chain can be a hard task. To help businesses out-rule debt bondage and indeed any of the offences under the Modern Day Slavery Act, Corporate Responsibility (CORE) have outlined the key requirements businesses should have to protect themselves, and individuals that may be subjected to modern slavery in their supply chain.

Discover how UK businesses are rising to the modern slavery compliance challenge across their supply chain >

Develop policies

As a basic foundation, businesses should be complying with UN Guiding Principles that clearly the state that policies and processes should be in place to ensure human rights. On top of this, businesses need to map existing policies and codes of conduct and identify the coverage of risks related to modern slavery.

Whilst not every company may not have a specific policy on human rights or slavery, you are likely to have at least some policies in place which these relate to. Ensure the most vulnerable areas of your supply chain include policies where applicable on migrant labour, child labour and child protection policies.

Highlight right to work policies

As a minimum, businesses should adopt procedures and policies that cover the fundamentals as set out by the ILO and Rights at Work scheme. This includes respecting the freedom rights of individuals and allowing them to move in and out of employment freely, without the threat of a penalty.

Your policies should also include information on the intolerance of abusive recruitment practices. These not only increase worker vulnerability, but they have been found to lead to debt bondage and forced labour.

Publish, implement and understand

Policies should then be made publicly available and given to suppliers and contractors. This should be swiftly followed by follow-up communication to ensure your supply chain understands the policies, and that they are adhering to them.

The consequences your businesses supply chain could face, if they don’t comply, should be made very clear in your policies. The seriousness of losing a contract from your business, shows the importance of adhering to policy guidelines.

Reviewing and re-assessing

Following the implementation of the policies, procurement teams should be integrating issues the Modern Day Slavery Act holistically into their working practices. As well as asking new suppliers and contractors to comply to your modern day slavery policies, application forms such as pre-qualification questionnaires (PQQs), and updated information questionnaires from existing suppliers, should include questions on modern slavery.

For those suppliers or procurement professionals that have identified a vulnerability in your supply chain, a whistleblowing and complaints procedure should be put in place, and put in your policy too.

Becoming debt bondage free

This combination of contingency and crisis policies and procedures, as highlighted above, can help to negate the risk of you and your supply chain falling foul of the Modern Day Slavery Act.

Debt bondage, as one of part of the act, is something that we all agree shouldn’t have a place in our supply chains. By implementing this best practice around modern slavery policies, you can ensure that debt bondage is a thing of the past – and your business is assured of legislation compliance too.

New Modern Day Slavery Report released

Discover how UK businesses are rising to the compliance challenge across their supply chain by downloading the inaugural Modern Day Slavery Survey 2017 Report. Featuring key findings from procurement and supply chain professionals such as poor internal policies, failing supply chains, and best practice advice to assure long-term slavery compliance.

Contract, Facilities, and Procurement managers will know the gut-wrenching feeling when the phone rings from a subcontractor reporting an incident or delay to the project! Some instances cannot be avoided, but you are in a position to negate as many problems as possible by understanding just why some subcontractors fail.

Speaking on leading construction website, For Construction Pros, expert Gary Goldman shared his experiences of three reasons why subcontractors fail. With 20 years’ experience in the landscaping industry, Gary has come across common subcontractor problems that are synonymous throughout all sectors and industries.

Financial barriers

As well as the problems that bad subcontractor cash flow can bring, Gary was quick to talk about the risk of undercapitalisation:

“Money’s not only the root of all evil; it might well be the leading cause of business failures among subcontractors.”

“Far too many underestimate how much money they are going to need, not merely to get the business up and running but also to sustain it as it struggles to gain a commercial foothold. Once you start out undercapitalized, that can start a downward spiral from which you can never catch up.”

Projects and ongoing work require your subcontractors to deliver when you need them. While subcontractors may be eager to cut their costs significantly to win the work from you, you need to ask yourself whether they are risking their own financial health by doing this, potentially leaving you in a bad situation when they fall into administration.

To negate this situation, you should be conducting thorough assessment checks on any new subcontractors. In The Contractor’s Guide to Managing Subcontractor Compliance, the Altius expert team talk about why it’s important to not “shy away” from asking for the financial details of subcontractors to protect you and your client.

Inadequate planning

“Not surprisingly, this is the reason problems like capitalisation and bad cash flow happen in the first place.”

Inadequate planning both in the subcontractor’s business and the projects they work on, can lead to problems. As part of your management procedures, you should be first outlining policies and rules that subcontractors should abide by, before making sure they acknowledge the contracts, controls and restraints the job comes with.

“If you don’t plan and still move ahead, you might end up with heartache and thousands of dollars down the drain.”

Ignoring “the next steps”

While some subcontractors may complete the job successfully first time around, making sure they stay to the same standard on other projects can prove to be an issue too. As a best practice guide, and something that is highlighted further in the new Altius subcontractor guide, you should be using monitoring techniques to keep the quality of workmanship high.

“All members of your staff need to be focused on operating in a proactive manner. This mindset often gets lost in the hustle and bustle of your day-to-day activities. However, it is essential for the growth and continued success of your business.”

Read more about how monitoring behaviour, carrying out on-site and off-site audits, and using KPIs can help achieve greater performance scores from your subcontractors here.

With big projects, it’s necessary for you to look for extra help, but with it comes extra responsibilities. As a contract manager, you need to manage the project which involves planning, coordination, while remaining in control of the various tasks that take place to complete the project, which can be a lot to handle, on top of daily duties.

If you’re entering into the process of outsourcing part of your project to a subcontractor, there are many details that you need to consider to keep the job on track. So that you don’t run into any unexpected problems, here’s our step-by-step guide to managing subcontractors effectively:

Assess capability

Firstly, can the subcontractor that you’re considering working with actually carry out the job at hand? Do they have the capability to tick every box that you need them to? And have they proven this elsewhere?

Finding the right subcontractor can be a difficult task – especially one that meets the standards of your client, and the industry. Every subcontractor must be authorised by the relevant industry body to carry out the work that they specialise in, not only to give you peace of mind, but also for legal reasons.

By seeking information – such as compliance with industry regulations which verifies that a subcontractor can do what they have signed up for, you can be confident they will fulfil your tasks and bring value to the client.

Define responsibilities

This can be a misconception regarding the process of subcontracting. Sometimes, people believe that if they outsource, or delegate a task, it has stopped being their problem, and therefore their responsibility. This is not the case.

Before signing any agreement with your subcontractor, you must define exactly what your responsibilities and deliveries are to them, and then you must have them define theirs in return.

Even with these agreements in place as part of the contract you hold between yourself and the subcontractor, you must still monitor the project and ensure that everything is running in a timely manner, and in line with the standards that you expect.

Appoint single point of contact

The best way to work successfully with your subcontractor is to have one single point of contact for each project. One from your organisation (or you as the contract manager) and one from the subcontractor. This will help to keep the lines of communication open, and reduce the chance of any misunderstandings from either party.

Try to look at working with subcontractors as a partnership, you’re helping them, and they’re helping you. So ensure that while they provide you complete transparency by sharing all relevant data with you regarding your project, you should give them as much relevant information in return with regards to potential problems, or future plans.

Developing a positive working relationship with your subcontractors could be a great help to you with future projects.

Implement KPIs

While this is a partnership, you still have a job that needs to be done, and your client is expecting a high standard from you. To ensure that this is achieved, and to keep the project on the right track, implement key performance indicators (KPIs) to monitor outcomes, or project milestones on an ongoing basis.

KPIs are extremely useful for detecting any trends – good or bad – and raising the standards once processes are established. The implementation, and monitoring of KPIs should be done simply, and efficiently, and not become a burden to the subcontractors trying to complete your work.

Maintain compliance

Maintaining compliance is key to projects running smoothly, and meeting all legal regulations required. The last thing that you need is to get mid-way through a project, and find out that your subcontractor hasn’t got the right insurance or qualifications for instance. By following the steps laid out in this blog, you’re already well on your way to managing subcontractors effectively, and ensuring that they remain compliant.

For further tips, and advice on how to keep your subcontractors compliant, you should download The contractors guide to managing subcontractor compliance, which explores common industry problems you’re facing, and how you can resolve them through compliance.

Subcontractor problems, such as delays and incidents can really hit your projects hard, leading to disgruntled clients and bosses too. Thankfully, these problems are a common occurrence, which means experts from different backgrounds and sectors have their own opinion on what can be done to negate problems before they happen.

Here, we share the opinions of industry experts on five of the most common mistakes companies make when managing subcontractors.

1 – “Having inconsistent processes”

Jay Lash, Vice President of Corporate Development for MBO Partners, is responsible for procurement and HR communities in the organisation. He had his say on how inconsistent processes make for a messy on-boarding process of subcontractors.

“Too many times companies allow other manager and executive leadership to “wing it” when bringing in consultants. Taking the time at the front-end to initiate a thoughtful process that cover the bases will pay off in the long run. Organisations should aim to provide a consistently good experience for the talent, while also protecting the company from potential liabilities.”

2 – “Not having appropriate types and amounts of insurance”

Ron Formanek, CEO of Telecom Solutions Inc, spoke about the importance of checking and managing insurance of subcontractors.

“Being sure they are carrying the appropriate types and amounts of insurance, if they have any at all is important. If not you could end up being liable for it when your own insurance companies audit you at the end of the year.”

3 – “Not creating clear accountability”

Managing Partner with consultancy firm Enshored, Ian Jackson reveals that clear accountability is essential to get the job done and avoid a situation which is frustrating for all parties.

“Everyone must be clear on what their role is and where their responsibilities start and end. You must also not expect more than what you are paying them for. I also believe that you need extra regular communication both one –on-one and with groups of contractors working in the same area to align everyone and deal with the knowledge gaps.”

4 – “Not managing them properly”

Deborah Schroeder-Saulnier is founder and CEO of global management firm Excel Leadership Solutions. Working with a number of Fortune 500 companies Deborah has witnessed big firms simply failing to manage their subcontractors properly.

“Very quickly you can get into schedule delays, missed deadlines, scope creep, cost over-runs, communication issues, role confusion, and much more. Setting the agenda and guiding the experts through a single point of contact, beginning with onboarding, reduces conflict and confusion on several fronts, thereby reducing cost and ensuring greater success in achievement of the respective goals.”

5 – “Not setting clear and measurable goals”

Hamilton Powell, CEO of luxury watch consignment company, Crown & Caliber LLC, pointed out that it is a lack of measured goals that can lead subcontractors astray.

“It is very important to set expectations and relay them to the appropriate parties. The goals and expectations must be realistic and communicated properly. Constant communication is important to ensure that everyone’s expectations and goals are aligning properly. To make sure that these goals are being achieved, it is helpful to set milestones and deadlines. This way, all involved parties can make sure that they are staying on track and are still working toward the correct goals.”

Assessing capability, managing and monitoring

Three problem areas that are prominent in the quotations above are that businesses struggle with assessing subcontractor capability, managing them efficiently, and monitoring their performance after the project.

These three areas, however, which can be explored in more detail in our Managing Subcontractor’s Guide, can be used as a framework alongside compliance to negate problems such as the five highlighted above with subcontractors.

To find out more about how you can help shape a more efficient and compliant set of subcontractors, take a look at the free Altius subcontractor guide here.

Managing subcontractors brings its own set of challenges to all contract and facilities managers. Whether subcontractors fail to finish their work on time, or they leave you with an incident on site to sort, it means your neck is on the line when something goes wrong.

To see whether you are following the best practice procedures to manage subcontractors correctly, leading supply chain compliance partners, Altius, have created a free subcontractor questionnaire for you to complete.

Self-Assessment Guide

Managing your subcontractors: The Self-Assessment Guide is a 10-minute questionnaire that asks you questions on key subcontractor managements areas, including:

• Current procurement procedures and assessing subcontractor capability
• Policies, regulations and contracts
• Organising and planning subcontractor work
• Monitoring and reviewing

Following the questionnaire, you will be in a position to understand what areas of your current procedures need work, and how you fair against the best practices associated with managing subcontractors according to compliance and health and safety procedures.

Gaining better awareness

Speaking on the publication of the self-assessment, Altius COO and Chief Technical Director Len Simmons, said:

“No matter how many subcontractors managers are responsible for, we’ve noticed that the problems are exactly the same. Unreliable subcontractors bring delays to projects and create a stressful experience for everyone involved.”

“This self-assessment will give those responsible for managing subcontractors, a better awareness of where they could improve their internal procedures to better assess, manage and monitor subcontractors with 10 minutes.”

The interactive PDF document, which has functionality to save and print your answers, is now available as a free downloadable document here.

As subcontractors aren’t full-time, or regular employees of your business, it can sometimes be a difficult task to manage their roles and responsibilities, on top of your daily job. But, it’s important that you monitor them as much as you do your own employees, if not more.

Subcontractors are viewed by the client as an extension of the primary contractor, and a failure by the subcontractor can have an adverse effect on the reputation of your company. To make sure that this doesn’t happen, here are five things that you are responsible for when managing subcontractors:

1. Choosing competent subcontractors

As a contract manager, you’re responsible for choosing the right subcontractors, should you decide to use them. And you’re responsible for determining the criteria that they must meet (this will have previously been agreed in your contract with the client).

You must ensure that the subcontractor has experience within the field of work required, and can evidence this with references and/ or project reports. You can also request that they provide you with evidence of qualifications, industry accreditations, ongoing training and health and safety training as part of your pre-qualification questionnaire (PQQ).

These details will help you to determine whether or not a contractor is competent, and should be used for your project.

2. Health and safety

While subcontractors have a duty of care to ensure that the worksite their workers are sent to doesn’t pose a risk to their health or safety, it’s not solely their responsibility.

Before each job, you must perform a health and safety assessment to identify hazards and risks that could occur due to the work that will be carried out. Once these are determined, you have to take the necessary measures to reduce, or even eliminate these risks, and provide as safe a working environment as you can.

It is also your responsibility to make sure that any necessary training, or instruction is provided to subcontractors, and that they have in writing, a copy of your risk assessment and details of your health and safety procedures too.

3. Insurance

When discussing insurance for subcontractors, there can be a lot of confusion around whose responsibility it is. There are two types of subcontractors:

Labour only subcontractors (LOSC)

These are classed as employees, and need to be included under your employers’ liability insurance.

Bona Fide subcontractors (BFSCs)

These are not classed as employees, and don’t need to be covered under the liability insurance policy of your employer. However, they do need their own liability insurance, and the level of cover must be the same as the primary contractor’s policy.

It’s your responsibility to determine which category your subcontractor falls into, and which level of insurance they should have. If you’re not suitably covered, it could be the difference between an insurance claim and the end of your business.

4. Quality control

When a client hires your company, they are going to expect you to stand behind your work, even when it has been carried out by a subcontractor. This means that it is necessary to put a quality control process in place, to make sure that work is carried out accurately and will be completed on time.

It is always advised before a project begins to discuss responsibilities and deliverables with subcontractors so that they know what is expected of them, and what they’re waiting for from you. These should always be in writing.

To keep a close eye on the quality of work carried out, set out KPIs with your subcontractors so that you can determine if the project is going in the right direction, and bring it back on track should it start to sway.

5. Compliance

Sometimes subcontractor compliance can be seen as a barrier, with managers asking to see insurance policies, license, references, background checks and more before they can start work. But, it’s the exact opposite.

Now that this level of control and compliance is required, it means that if the worst should happen, your organisation is covered, and they will already have the necessary information that they need.

Looking for more information on maintaining subcontractor compliance? You should download The contractors guide to managing subcontractor compliance, to discover tips about how to manage your subcontractors more effectively.