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Are Workplace Risks Hiding in Plain Sight?

By Safeopedia Staff
Published: October 14, 2022 | Last updated: October 14, 2022 08:20:15
Key Takeaways

Supply chain risk management solutions can help you mitigate significant workplace risks and security threats.

Caption: Supervisor in container yard Source: Chatchawal / iStock

When it comes to your workplace, what you don’t know could hurt you. This is a complex network of various stakeholders, and you need complete visibility into all of it.

Unfortunately, many businesses are operating with their blinders on, hoping that their suppliers and subcontractors are following operations and adhering to their best practices.

By making this assumption, they could unknowingly expose their companies to risk. When supply chain issues occur, the problems could range from inconvenient to catastrophic. Let’s take a look at some of the most common vulnerabilities that exist, and how the right tools can help you avoid them.


Health and Safety

Let’s start with the most important consideration. The health and safety of your supply chain is essential, but it can also be the hardest factor to maintain.

There are many safety risks that impact an organization on a daily basis. From non-compliance with safety regulations to a lack of controls and contractor mismanagement, these hazards are always present.

At best, you’ll lose money, time, productivity, and business reputation if an incident occurs. At worst, you could experience worker injuries or even loss of life.

Taking a reactive approach to safety management leaves you scrambling to pick up the pieces. On the other hand, a data-driven supply chain operates in a proactive manner, allowing you to identify potential health and safety problems and eliminate or mitigate them before they occur. When you know your supply chain risks, it becomes much easier to prepare for them and prevent them.

Our research shows that workplace injuries cost organizations more than $170 billion each year, and the direct cost of even one safety incident is at least $40,000. With a supply chain risk management (SCRM) platform in place, you can improve safety outcomes, protect workers, and safeguard your bottom line.

Worker Qualifications

Next, let’s talk about the people who make up your supply chain. In addition to your direct employees, you may also rely on a network of subcontractors to fulfill project demands.

If these workers don’t have the appropriate qualifications, skills, and credentials, they could put your business at risk in a few significant ways.

First, their lack of training can make them less productive on the job site, which heaps time and cost onto your projects. Second, without the necessary knowledge and experience, they could perform tasks incorrectly and become more vulnerable to workplace injuries.

Meanwhile, regulatory bodies could also impose expensive sanctions and penalties on your organizations for breaching their statutes. When this happens, you’ll experience more than a minor setback.


Companies found to be in non-compliance with workforce qualifications could find their work permits and licenses suspended, rendering them unable to complete jobs or take on any more work. However, it can be difficult to discern this information during the traditional hiring process. A thorough supply chain risk analysis can give you a more accurate look at how your team members could affect your immediate and long-term performance.

You can’t afford to hire employees who could jeopardize your immediate and long-term business future. With a SCRM, you can establish worker-level compliance requirements and make sure everyone you bring on board meets or exceeds them before they begin work.

(Find out Why Contractor Qualification Shouldn't Stop at Prequalification)

Sustainability and ESG

Increasingly, organizations and the communities they serve are taking big stances on eco-consciousness. This includes setting goals around Environmental, Sustainability, and Governance (ESG) initiatives.

While these are admirable objectives, they aren’t always easy to track. Many companies make bold promises around ESG but fail to deliver updates on their progress so partners and clients can hold them accountable.

It can be challenging to make sure you’re hiring employees, suppliers, and subcontractors whose commitments to ESG mirror your own. Unless you’re actively managing this risk, the workers you bring on board could derail your ESG efforts, not strengthen them.

Look for an SCRM that assigns an ESG index score to each potential hire, benchmarked against a code of ethics and relevant industry standards. This way, you can build a team that helps you meet your goals.

Over time, you can monitor your suppliers’ progress through incremental evaluations and put steps in place to grow their ESG index scores and sustainability targets. Along the way, you can report on that progress to keep your supply chain stakeholders in the loop.

Financial Viability

Are you confident that the suppliers you work with are financially viable? This means that they not only have sufficient income to meet their operating payments and debt commitments, but they can also scale and grow without sacrificing their service levels.

Unviability usually remains hidden until an unfortunate exposure brings it to light. As such, many organizations enter into business relationships with suppliers completely unaware of their shaky financial footing.

Studies show that 55% of organizations cite supplier insolvency as the biggest financial risk facing supply chains. When your partners can’t afford to pay for their part of the puzzle, it puts everything at a standstill. In fact, we found that product release delays rose by 302% in 2020 based on supplier financial risk alone.

You need the ability to manage and track the financial health of every supplier you hire. You also need to track that status in real time. With an SCRM platform, you can conduct routine checks to monitor this critical risk, evaluating supplier performance against proven financial metrics.


Before the Digital Age, companies didn’t give much thought to the cyber health of their suppliers. Today, it’s a chief consideration.

Companies now share intellectual data and confidential information worth millions of dollars with the click of a button or the swipe of a screen. They have to make sure that the partners they’re working with can be trusted with this intel.

If you’re sharing data electronically, your suppliers must have proper cybersecurity measures and information controls in place. Without these protocols, you risk losing sensitive information to untrustworthy parties, who could use it to expose your clients and put your business at major risk.

Data breaches are expensive, costing companies nearly $4.5 million per incident. They also damage your reputation, diminish consumer trust, and make it more difficult to win new work. When one occurs, the exposure is usually farther down into your supply chain, where oversight is limited. We’ve found that an estimated two-thirds of supply chain data breaches stem from supplier or third-party vulnerabilities.

If you can keep a close eye on electronic data exchange, you can spot weaknesses and correct them before they snowball. In your SCRM, look for supplier risk assessment features that screen and evaluate suppliers based on their adherence to key security controls, such as:

  • Secure data management
  • IT system management
  • Communication protocols (email, FTP)

You can also take a proactive approach by scheduling cyber health audits at custom intervals, flagging any risks you find to trigger notifications and corrective workflows.

Protect Your Workplace From Hidden Risks

At any point in your supply chain, there could be a weakness or vulnerability that sets a critical thread unraveling. How will you know where it is and how to stop it?

If you’ve been taking a reactive approach to supply chain management, it’s time to pivot. Successful supply chains are proactive and data-driven, using real-time metrics to make important changes and decisions.

You don’t have to cross your fingers and hope that your suppliers and subcontractors are helping your efforts, not hurting them. With the right tools, including a robust SCRM, you can see the answers as you track them. You can also vet new hires right from the start to ensure their goals align with yours.

With steps like these, you can make supply chain risk management possible, productive, and profitable.

From health/safety and ESG to financial viability and cybersecurity, where do your weaknesses lie? If you want to find out, you’re welcome to take our free Risk Survey. Answer just 12 questions, and Avetta will deliver your custom Supply Chain Risk Review Report via digital download.


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Written by Safeopedia Staff

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At Safeopedia, we think safety professionals are unsung superheroes in many workplaces. We aim to support and celebrate these professionals and the work they do by providing easy access to occupational health and safety information, and by reinforcing safe work practices.

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