Archive for May, 2010

Some industries heavily utilize contingent workers to save money from employee owned burdens. One of those industries is oil and gas. A recent illustration of this issue is the Transocean oil rig incident in the Gulf of Mexico. Of the 126 people onboard that rig, 79 worked for Transocean, 6 for BP, and 41 of them were contingent/contract workers. Sometimes, contingent workers have skill sets outside of the core competencies/operator qualifications of employees – in this case Halliburton had just cemented the 18,000 foot well before the explosion. In other, and in most cases, contingent workers are hired to simply save money.

Contingent workers are less safe than employee owned workers. Why is this?

The metaphor I like to use for contingent versus worker is renting or buying a home. I think both of these illustrate the difference between owning a process or simply being part of one. Do the renters of your house take care of it like you did when you lived there? Probably not. Employees absorb the culture, the symbolism, the politics and the human factors of working in an organization. They have an ownership experience. Contingent workers, on the other hand, collect a paycheck and do not receive the same indoctrinization as an employee would.

Jeffry Pfeffer, professor of organizational behavior at Stanford, studied contingent workers in 1994 and determined that they were less safe than employee owned workers. I continue to validate his findings with HR professionals when discussing safety and human capital practices – they always concur with Pfeffer’s conclusion. Laurie Bassi, of McBassi and company, showed that companies with optimized human capital practices recorded fewer safety incidents than those with subpar HR practices. One of the pillars of her research was “learning capacity.” Learning capacity describes and organizations ability to instill learning in its employees. She showed that American Standard was able to reduce the number of incidents by nearly 25% when elevated levels of human capital were present.

I am a huge believer in the value of training and you can train someone into a mindset if they are willing to learn. You can train any employee into a safety mindset. There are many international laws that define the contingent classification. In some countries, like Canada, training for contingent workers has to be separate than those that are company trained. This disenfranchises employees from the cultural mindset needed to be safe. Willingness of contingent workers to be trained is also an issue – what is the upside of this training with no positive payout in the end? Even before the incident, Transocean put safety ahead of production as a company-wide goal. If they really want to create shared ownership and permeate a safety culture, they should stop sourcing contingent workers and start hiring them.