The use of contractors is a common feature of industry today but there are steps you can take to ensure you and your organisation remain in control and competitive
A shortage of skilled engineers has driven enormous growth in the use of contractors over recent years. According to one survey, for instance, a third of employers were reporting difficulties in recruiting engineers in 2017. This figure rose to half in 2019.
Moreover, despite disruption when COVID-19 restrictions prevented external contractors from being on site, demand has accelerated further since the pandemic. The Institute of Engineering and Technology 2021 skills survey, for example, revealed that 96% of engineering employers had struggled to recruit engineers with the right qualifications.
There are, however, alternative strategies that can reduce reliance on contractors and offer other benefits to businesses that need to keep their equipment running smoothly.
Read on to learn more about how to both better manage your organisation’s use of contractors and introduce alternative solutions.
- Understand the downsides
What are the benefits of using contractors – and what are the downsides?
Contractors offer greater flexibility than in-house employees. Organisations often regard outsourcing as lowering costs, although this isn’t always the case (researchers suggest using outcomes rather than time spent on site as the key metric). Companies still have responsibility for the health and safety of contractors and may need to comply with other legal requirements. They may have to provide training too.
Moreover, studies demonstrate that use of contractors can negatively affect businesses. Some of the issues include loss of control over maintenance programmes, loss of knowledge because of high staff turnover and duplication of management effort. Their presence also affects in-house teams negatively.
- Retain crucial expertise
Maintenance engineering academic Dr Moray Kidd warns against wholesale replacement of in-house teams with contractors. “Where it’s unwise is when you’re working with bespoke equipment you’ve been operating over a number of decades and you’ve built your own intellectual property on how best to maintain those assets,” he says.
“I think an in-house team with the appropriate experience and competencies is invaluable and that should not be outsourced.”
“You can’t outsource the risk in terms of production loss, impact to people and our environment”
Dr Moray Kidd, maintenance engineering academic
Regardless of whether a business uses contractors or not, management should be looking to retain crucial areas of expertise. “People retire, people change, but you’ve got to have good processes internally to retain that knowledge, training and education,” continues Kidd.
“In theory, you can outsource pretty much everything. But you can’t outsource the risk in terms of production loss, impact to people and our environment. And that’s what should really focus the mind.”
- Consider the circumstances
Does this mean businesses should always avoid using contractors?
No, that’s not the case. Kidd believes that contractors provide a good solution in some circumstances, acknowledging that “There’s no replacement for outside expertise provided it’s managed accordingly.
“It has to be the right set of conditions for the right environment, applied appropriately”
Dr Moray Kidd, maintenance engineering academic
“But to outsource everything in every industry will be quite unwise. I’ve had plenty of experience of where it’s gone badly wrong,” he states. “I think a blended approach is appropriate. And it has to be the right set of conditions for the right environment, applied appropriately.”
Kidd offers examples of situations where use of contractors does work well. “A smart way to do it is where the original equipment manufacturer (OEM) provides you with maintenance,” he says.
“If it’s standard, usually critical equipment, the best people to maintain it are those with specification and design knowledge and a clear understanding of how best to maintain it.”
- Know your why
How can you determine if engaging contractors is the right choice?
You must be clear about why you’re going down that route, advises Richard Jeffers, founder and Managing Director for plug-and-play Industrial Internet of Things (IIoT) platform RS Industria.
“I’ve got three rules of contracting, which have stood me in good stead,” he says. “If your contractors tick two or even three of those boxes then contracting-out is a legitimate strategy.”
“It can be a way of getting a specialist skill that you don’t need to have permanently in-house”
Richard Jeffers, founder and Managing Director, RS Industria
His three rules are:
- Cost-benefit
“First, you should contract out if it is genuinely cheaper but if there are a lot of hidden costs, it’s often not – so you need to be sure it’s genuinely cheaper.”
- Short-term demand for specific expertise
“Second, it can be a way of getting a specialist skill that you don’t need to have permanently in-house.”
- Short-term demand for additional support
“Third, when you’re managing peaks and troughs, you can bring people in to ramp up the team when you need it and then turn the resource off again when you don’t.”
- Develop digital alternatives
What if you want to reduce or even eliminate dependence on contractors?
The solution lies in digital transformation
There are strategies to help organisations move away from reliance on external support. In some situations, the solution is to develop a business case that demonstrates why the internal headcount needs to increase. In others, the solution lies in digital transformation.
A soft drinks manufacturer, for example, purchased a piece of new equipment that came with a maintenance package provided by the OEM. This was helpful, but when that package came to an end, the manufacturer needed an alternative way to replicate the OEM’s expertise in maintaining the machine.
The business decided to introduce continuous monitoring using digital devices. Now fourteen individual accelerometers cover the main rotating components of the machine. These components are critical as they fill and seal drink cans. The data from the accelerometers provide insight into ongoing wear and protects the equipment from unexpected failure.
Digital tools give your business the edge
Regardless of whether you employ maintenance engineers in-house or as contractors, these kinds of digital tools give your business the edge, argues Jeffers.
They offer accurate information about how an asset is performing, allowing you to improve its reliability and optimise energy usage. Furthermore, the ability to see how assets are performing puts you in control of your maintenance programme, even if you then choose to use contractors for specific tasks.
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