Saving Time and Money Through A Sole-Source EHS Partnership
Are you wasting time, effort, and money by managing multiple third-party environmental, health, and safety (EHS) service vendors?
If so, perhaps these relationships need a reset—operations and other managers can easily produce quantifiable savings by consolidating various programs and handing them off to one proven partner. These savings can even potentially contribute to a return-on-investment (ROI) in the administration of your EHS program—within a short timeframe.
EHS Partnerships: Proven Successes
Outsourcing EHS operations is a viable way for companies to improve their operations. But too often, companies parcel out the various individual programs to multiple vendors (that includes the waste, safety, environmental, sustainability, and other components). This increases the risk to the outsourcing organization, as it may in fact expend too many resources trying to coordinate and maintain the disparate programs and relationships.
This begs the question: Why engage in multiple contracts when you can have just one?
Those organizations relying on more and more vendors to support EHS operations will almost certainly face excess complexity, and suffer from a lag in reaction times when issues arise. Internal managers can’t see clearly across the various programs—and so they can’t be proactive in heading off problems or responding to market changes. This means they also can’t efficiently drive safety and sustainability policies and pursue goals linked to core key performance indicators (KPIs).
Instead, operations and safety managers are busy putting out administrative fires—ones that spring up in the gaps among the multiple programs and EHS. The entire EHS operation becomes less than the sum of its parts. Playing catch up, internal managers may fail to extract all the potential benefits available from these one-to-one partnerships.
Multiple EHS Vendor Management Challenges
The EHS partnership market in North America is growing rapidly, for a variety of reasons, including governmental pressure for sustainability. In the wake of COVID-19, there is increased sensitivity around workplace safety—and companies want the in-depth knowledge of a dedicated and experienced EHS vendor. In fact, research shows that 37% of EHS departments intend to add support staff, notes an article in Safety + Health.
This indicates that EHS outsourcing will likely grow as well. And planning in advance, before a major expansion or project start, will enable operations and safety managers to get their internal and external operations under control—while these programs can be proactively shaped with relative ease.
The way organizations contract for services varies. Many companies run a hybrid mix of EHS programs: some operations, such as waste disposal, outsource to a vendor—while internal recycling or regulated waste disposal may remain in-house. Yet another vendor may oversee training and communications, and so on.
This leads to:
- Multiple contracts, which may be necessary for each individual EHS vendor relationship—and as these agreements multiply, they can become challenging and time-consuming to manage—with multiple people managing the different contracts independently
- Many individuals or teams, from different partners, working on a project, both remotely and on-site—which may mean potential breakdowns in coordination, communications, and methods
- Segmented knowledge repositories for data—preventing the creation of a central hub for information-sharing among projects and teams
- Varying regulatory training approaches, which will differ, depending on the vendors—and which may not harmonize
- Different ways to create documentation and standard operating procedures (SOPs), risk assessments or analysis, making it difficult to create a repeatable best practice that can be easily shared with other vendors or internal staff
- Multiple sets of incompatible data formatting, reporting methods, and protocols—reducing information transferability
- Sustainability and safety priorities that differ from the client’s
EHS Outsourcing Oversight Risks
This EHS heterogeneity makes enforcing accountability, data gathering, and troubleshooting more complex. Even with the most efficient and streamlined waste disposal and sustainability systems, unexpected events will occur. For instance, at any time, an organization can face chemical or biological spills, a late hazardous waste pickup, or a staff member injury.
With no single vendor being accountable for the overall operations, any particular issue may rapidly become unmanageable. The smallest issues can escalate—and often require busy, multi-tasking internal staff and safety or operations managers to drop what they are doing and intervene.
This could involve coordinating multiple vendors—or simply addressing directly what has become a complicated, cross-department problem. These situations may require multiple emails, phone calls, and even office visits to address, taking time away from other internal operations—including, potentially, key drug development or production efficiency program activities.
Administrators and managers in key positions are busy—and can ill afford to stop their routine to contact and interact with the various vendor team leaders overseeing hazmat response, safety, chemical management, and environmental reporting requirements. Ultimately, this situation creates an obstacle to what is frequently a major outsourcing objective: the saving of internal time, resources, and money.
Money, Time Loss With Multiple Vendors
Relying on multiple vendors can be a drag on the EHS program, and offset the benefits sought. Let’s look, conservatively, at just some of the administrative costs incurred because of EHS program gaps.
- The hourly rate of an executive is calculable by dividing total salary by 52 weeks, then dividing that weekly amount by 40 hours (the average workweek).
- The estimate should include the overhead cost of benefits and provisioning the manager receives, as well—which can add 25%-30% to the base annual salary.
- To determine the annual loss from these tasks, multiply the hourly rate by two—the assumed minimum average weekly number of hours lost to management and vendor procurement activities.
- Multiply that sum by 52 weeks—and then, multiply that annual amount across the horizon of the contract.
Exact numbers will vary among companies, regions, departments, and industries. Nevertheless, this shows that extra administrative work alone can easily run into thousands of dollars over several years.
Boosting Savings Via Sole-Source EHS
On the flip side, a sole source EHS relationship can radically reduce the amount of wasted administrative time, saving thousands of dollars. Consider the following benefits single-source partnerships enable:
- One key contact overseeing your various EHS operations
- A single data format, repository, and report set
- A streamlined primary master contract to maintain
- The same KPIs and policies across operations
- A familiar and responsive partner who will anticipate issues and intervene (without being asked) when issues escalate
Additionally, the more you can leverage the relationship with a single vendor, the more you realize the benefits. This vendor will better understand your needs, especially if it is supplementing your (potentially depleted) internal staff. The more insight the partner team members have into your operations, the better they can manage your needs and work towards delighting you.
This is all possible with Triumvirate Environmental’s EHSOne® program—which provides streamlined operational and compliance-focused support for all of your EHS needs. Talk to us today—we can run specific savings numbers to help you realize savings—or simply discuss your safety and sustainability needs.