The Small Business In Construction Industry Construction Essay

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Risk is an uncertain condition which contradicts expectations and is a cause of threat to safety. Assessing risk is checking out if it is safe to go ahead. Risk assessment and management is widely recognized as one of the most crucial part of project management, especially in construction industry. A risk is a threat or hazard that has been subjected to the probability of its occurring to a specific asset. In other words, how susceptible an asset is to a particular threat defines risk. Risk Management refers to identifying risks, approval of their impact on a business concern, frequency of occurrence and implementation of such steps which leads to manageable frequency of risks (Hiles, 2004). Its scope should be clearly defined at the outset. The scope should include 'what is being assessed? What results are expected? Who is at risk from what and when?' In the scope of the assessment, it is important to define the people that will form the subject of the risk assessment (Baterman, 2001). For instance, it may be employees, workers, contractors, cleaners or specific vulnerable sections of the population. It is also necessary to clearly define which elements of work activity are to be included for assessment as it is important that all reasonable areas or events are taken into consideration that can affect a duty holder (Stowe, 2001). It is not necessary to take into account all minor risks arising from routine tasks unless the activity compounds the risks or there is substantiation of important relevance to the particular work activity. Risk assessment is carried out to determine whether the level of risk arising from workplace is manageable or controls need to be in place to reduce the risk. It is about estimating magnitude of risk, preparing a list of hazards, carrying out an evaluation of risk, record the findings and laying down a process for reviewing it from time to time and modify it if required.

Risk assessment should be carried out in a structured and logical manner. One needs to ensure transparency and openness throughout the process. Also due consideration needs to be given to human factors and adequate handling of uncertainty. Once the assessment has been completed, it is important to act upon the findings and devise a system for constant review of the assessment. Hence its importance is well established in small as well as large businesses in construction industry. Most people understand if their business, large or small is posing any noteworthy risks. Small businesses including small workplaces in retail, hospitality, commercial or service sector are usually less risky businesses. Higher risk businesses are usually in the construction, energy or manufacturing sectors. Since small businesses are lower risk businesses, they usually are less prone to severe accidents. But even low risk businesses need to assess their risks. If one operates a small business then he might consider using guidance from Health and safety at work inspectorate, UK HSE, maintenance manuals and trade journals. They can keep the assessments simple by breaking down the document into various sections like work areas (offices, work yards or stores), defined tasks (gallowing, excavation and driving) and various stages in production (machines, assembly and dispatch). If employees are involved in risk assessment process then they can provide relevant information as they have insight into business issues through day to day experience. They have clear view where things go wrong and what necessary improvements can be made.

Larger organizations especially in construction industry are more likely to think that the benefits outweigh the costs. By ensuring risk assessments, they seem to have an added benefit of ensuring acceptance onto tender lists and success in gaining contracts. Over two thirds of all organizations have formal health and safety systems in place. A large proportion of organizations with formal health and safety policy and system in place also tend to document risk assessments, accident reporting and a designated person in health and safety specialist role. Fewer organizations particularly small businesses have performance measurement and performance targets. Those businesses that have been operating for long, have more comprehensive systems, most likely with the inclusion of performance targets and performance measures. Medium-sized organizations have reported more accidents per employee than small and large organizations. However, studies have shown that there were more accidents in small organizations in the site visits than medium and large organizations.

Risk assessment in construction industry poses unique challenges due to the nature of the industry. There seems to be a disproportionate injury rate, occupational fatalities and workers' compensation costs. Small businesses in construction industry lend a grim picture of health and safety measure because of the way they operate. Also, sometimes employers and employees do not carry out risk assessment in an adequate way. Inadequate industry risk assessments that demonstrate common pitfalls in the application of risk assessment which have been identified are as follows: Carrying out a risk assessment in an effort to justify a decision that has already been made, using a general assessment when a site-specific assessment is needed, carrying out a detailed quantified risk assessment without initially considering any relevant good practice is applicable or exists, doing a risk assessment using inappropriate good practice, making decisions on the basis of individual risk estimates when societal risk is the suitable measure, considering risk from only one work task, having the 'salami slicing' approach to risk estimations by dividing the time spent on risky activities between various employees, not involving a team of people or employees in the assessment with practical knowledge of the process being assessed, inability to consider all possible outcomes or identify all possible hazards, inappropriate use of data or risk criteria or cost benefit analysis or not relating hazards to risk controls and finally not making any use of risk assessment done. This leads to no change in the number of accidents at workplace or breach of regulatory (Gadd, Keeley & Balmforth 2003).

The management of Heath and safety at work regulations require employers to make constant assessment of the risks involved in performing job duties as a part of their work. There is a need to asses risks at workplace so as to confirm with legal requirements and make certain improvements if there is a need (Health & Safety, 2005). It is a legal requirement since 1969 for employers to insure their employees against liability for injury or disease arising out of their employment. They need to clearly put out internal information for safety measures. Internal sources of information on health and safety within an organization include accident ill-health and investigation reports, absentee records, inspection and audit records undertaken by the organization and by external organizations like HSE, documentation on health and safety measures for employees, equipment and examination reports and risk assessment and training records. Besides the external agencies and internal sources, there are other external sources for effective monitoring of health and safety standards like health and safety legislation, HSE publications, health and safety magazines, journals and information published by trade journals, employer organizations, specialist technical and legal publications.

The health and Safety work Act, 1974 which is commonly referred as HSWA provides the base for British health and safety law.It is HSE's responsibility for enforcing this and other statutory requirements to the working environment. The Act comprises of supporting the European framework of health and safety directives, key duties and liabilities for breach of health and safety duty (Ford, Clarke, 2002). Section 15 of the Act refers to Health and Safety regulations. Section 2 of the Act is about general duties of employers to employees like provisional and maintenance of plant and systems of work that are safe without risks to health, arrangements for ensuring safety and absence of risk to health in relation to usage, handling and storage of articles and substances, provision and maintenance of working environment without risks to health and adequate in relation to facilities and arrangements for their welfare at work. Section 7 of the Act deals with general duties of employees at work which include reasonable care for health and safety and other people who may be affected by his acts and to comply with the requirements of his job and cooperate with his employer for fulfillment of his duty.

Following an EC directive, Management of Health and Safety work regulations became law in UK on 1 Januray 1993. These regulations as part of HSW act were updated in 1999. Some of the duties of employers and employees were redefined. The employers as a result are required to undertake written risk assessments when there are 5 or more employees. They need to put in place effective health and safety measures in the workplace, provide health and safety information to employees, develop suitable emergency procedures, should employ competent people, should cooperate with other employers in same sector on health and safety matters, provide health and safety training to employees, protect new and expectant mothers and new employees from particular risks. Employers in construction industry need to make sure that employees are trained, fit and competent to do the job safely without putting themselves or anyone else at risk. They are properly supervised and given clear instructions and have right tools and equipments, plant and protective clothing and understand health and safety measures and issues. Whether people are working under the construction company as contractors or employees, they need to be protected against any risks. For instance the employers need to make sure if pot holes are protected with clearly marked and fixed covers to prevent falls, can weather conditions affect health of those carrying out the work, are there effective barriers to notify people of incomplete scaffolding, are the ladders positioned so that users do not have to overstretch, is there edge protection to avoid any accidents, are safety routes enough and are they being kept clean for usage during emergency.

Employees duties entail using any equipment or substance in accordance training provided by employers. They also need to be proactive to report to employer any serious dangers or limitations in employers' protective measures (HSE, 2007).

Workers Compensation Act and Occupational health and safety regulation act comprises of certain guidelines relevant for Construction industry in form of interpretation and purposes, Board Mandate, general duties of employers, workers and others, joint committees, prohibition against discriminatory action, information and confidentiality, accident reporting and investigation , inspections and inquiries, enforcements , offences and general guidelines. OHS Act specifically also entails application, rights and responsibilities, general conditions and chemical and biological agents (workplace hazardous materials information), containers and storage , ventilation and emergency procedures (Work safe BC, 2010).

In 1999, an initiative was conducted by Better Regulation Task Force to understand the regulatory barriers to start-up, success and growth of small businesses (Better Regulation Task Force, 1999). It was found that smaller companies are usually at a competitive disadvantage compared with larger organizations because of the cost and time involved in regulatory compliance. This has been supported in a recent evaluation of the Manual Handling Operations in the case of health and safety regulations commissioned by HSE (Lancaster et al, 2001). That study revealed that the cost per employee in small businesses taking action to manage manual handing risks was £341 per employee as compared to £37 per employee for large organizations. Large companies with bigger employee base (more than 5000 employees) report considerably less expenditure per employee as compared with organizations of fewer than 5000 employees.

Studies have shown that although small businesses show great concern over environmental issues but this concern is not reflected in their behavior. It has been seen that small businesses response to health and safety regulatory depends upon a number of factors like social pressures, awareness of its managers or owners, culture of the organization competitive conditions, way of operation and exposure to regulatory and public. The attitudes of the managers can vary from forthrightly rejecting regulation and its legitimacy to proactively going beyond compliance. Compliance and the compliance related improvements have been more reflected in businesses which are linked to external organizations or driven by customer opinions. Small businesses tend to be less likely to be member of trade associations but respond more to inspections.

Although, small enterprises might demonstrate high level of health and safety awareness assessment of risks is likely to be implicit or informal and sometimes reactive, as opposed to the more systematic and explicit approach promoted by HSE more likely to be implemented in larger organizations (Entec, 2003).

The main external influences for implementing formal health and safety systems are legal obligations, nature of the market, forms of competition faced by the business, sectoral context of the business, publicity related to health and safety, insurance costs, experience of accidents within the organizations, customer pressures, organizational structures, systems and size, trade groups, union pressures, company policies, social duty and concern for employees. The Internal influences are basically the characteristics and capabilities of the business, particularly with respect to the degree of formality in management approach. This is reflected in differences between attitudes of various companies in the incidence of management training, the extent of employee representation with respect to health and safety and managerial approach . The relative roles of the various influences identified can vary considerably, particularly with respect to business size. Trade associations also have a deep impact on businesses depending upon the size of organizations being the deciding factor for their membership and ethnic diversity. Cultural influence is also identified as one of the major factor contributing to health and safety measures. This cultural influence is reflected in formal approaches to management, autonomy exercised by owners, closeness in employer employee relationship (Wilkinson, 1999). One of the characteristics of cultural influence is resource constraints faced by small enterprises. Other characteristics also include ethnicity, previous management experience, educational and skill levels and gender to a certain extent. Ethnic minority small businesses may differ greatly in the way they address health and safety management from not taking risk assessments seriously to confirming with compliance 100 percent (Vickers et al., 2003).

Risk assessment process can be a qualitative, semi-quantitative or quantitative. Workplaces where possible hazards expected are few or simple, there should be a simple qualitative assessment with due consideration given to relevant good practices. It could be a very straightforward process based in informed decision and referencing. In some cases it will be appropriate to extend the qualitative assessment by a more meticulous semi-quantitative or quantitative assessment where hazards are expected to be numerous or multifarious or may require specialist knowledge intervention. Simple qualitative techniques, supplemented by measurements to identify the presence of hazards from chemicals, machinery, or use of simple modeling techniques may be appropriate for carrying out semi-quantitative risk assessments. Simple modeling techniques may be used to derive order of magnitude estimates of the severity of the consequences and probability of hazards. These estimates can be combined to obtain estimates of the order of enormity of the risk. Different techniques for carrying out semi-quantitative risk assessments exist like risk matrix approaches, lines of defence/layers of protection analysis, etc.

It is appropriate to carry out a detailed quantitative risk assessment in addition to the simple qualitative assessment where the hazards presented by the organization are numerous, complex and may involve innovative process. For example in the case of large chemical process plants or nuclear installations, detailed and sophisticated risk assessments will be needed.

Quantitative risk assessment (QRA) requires achieving a numerical estimate of the risk from a quantitative consideration of event probabilities and consequences. There are two types of risks- individual risks and societal risks. Individual risk is the frequency at which an individual may be expected to sustain a given level of harm from the realization of specified hazards. Societal risk is the relationship between frequency and the number of people suffering from a specified level of harm from the realization of specified hazards (Crawley & Tyler, 2003) .

Both risks are a measure of incident frequency and consequences. Individual risk is a measure of the risk to a particular individual, while societal risk on the other hand is a measure of the risk to society as a whole. If the hazards that are being considered have the potential impact on large number of people at the same time, it would also be necessary to consider societal risk even when individual risk may be low.

For instance, we consider a Case Study for a new rail terminus which was presented to HSE. The safety case included all aspects of the operation of the terminal and considered risks to employees, passengers and members of the public. The risk assessment gave consideration to individual risks and not risk to workers. Further it also applied similar methods used for analyzing indivudal risks to assess risks to public and passengers. For instance, risk from fire or overcrowding was considered as individual risk and not societal risk. Further it was argued that since an individual spend limited time in transit, the risk on an yearly basis could be insignificant. The drawback of this assessment was that societal risk was assessed as individual risk and harm to larger public was undermined. It is therefore very important that decisions on risk estimates are made based on the gravity of the situation.

Risk assessment methods help in designing effective plans based on priorities and objectives for effective control and reduction of risks. The framework for an effective health and safety management can be designed by making note of certain key elements which play a key role in general business management . HSE in Successful Health and safety management has identified six elements for a sound and safety health management system (HSE, 2009). These elements are Policy, Organizing, Planning and implementing, Measuring performance, reviewing performance and Auditing. The policy states the organization's objectives, aims and targets in clear, concise way. A policy incorporated ensures business effectiveness and improvement in the operation and also ensure confidence in stakeholders that senior management is actively involved and concerned in environmental and health concerns. A clear plan on health and safety measures helps in setting performance standards, targets and procedures.

Constant improvement has become more a commercial requirement than a theoretical ideal. It is also important to recognize that any performance improvement program requires careful planning on design, implementation and control. Measuring performance is based on both reactive and proactive monitoring to see how well health and safety management system is working. It is also about measuring organizations against long term goals and objectives. Active monitoring refers to constant check on premises, substances, plants and people, procedures and systems. Reactive monitoring is done through investigation of accidents and incidents if controls have failed. At the review stage, the performance is measured against set objectives and targets and changes may be introduced to overcome any shortcomings. To reiterate the importance of performance reviews, they are now a requirement by HSW act. Independent and structured audit system is required to emphasize the review process (Hughes & Ferret, 2009).

Further, small businesses can benefit by compliance with a defined public policy as it leads to better regulation, consultation through open process and more flexibility.

Red tapeism has led to regulation as a burden than the way of doing business impacting small business performance and underplaying the benefits of regulation. Some academics believe that reduced emphasis to health and safety regulation in small businesses should be given due enforcement in the form of inspections. There is a debate on this subject caused by differing views as some believe that policy imposes unnecessary burden on businesses and that risk concerns can be handled by alternative approaches. There is a general requirement felt by critiques that regulation should go through a shift from 'inspection' to 'education' (Vickers, 2008). There is a need to give attention to vulnerability of the policy processes in comparison to elite interests therefore lending support to calls for the requirement to strengthen the role of democratic deliberation in policy-making in today's modernized policy arena (Fischer, Miller & Sidney 2007).

Detailed guidance in an educative way is required for small businesses. Although businesses may experience inspection visits as too burdensome for various reasons but by adopting a principally persuasive and educative approach using enforcement prosecution as a last measure can prove helpful. There is a need for inspections to be more focused enhanced or reduced depending upon the need, applying tougher and more consistent penalties where these are justified.

Inspectors can take up more of an educative role encouraging the wider adoption of good health and safety practice in small businesses. SMEs need to be educated on new regulations that are relevant to them. This would prove to be helpful in setting performance targets for health and safety, evaluating the effectiveness of specific activities through risk assessments and the resulting impact.

Surveyed businesses in recent past have showcased to reap the financial benefits of investing in health and safety improvements. A perception of over-regulation arises among businesses that are more conservatively managed but small businesses that made use of IT were considerably less likely to report feeling of being over-regulated with health and safety legislation. This helps to indicate that IT use leads to a more active and systematic approach to management. Automation and use of information technology can possibly bring down the severity and number of occupational accidents by improving safety, quality and efficiency through work process re engineering (Sun & Howard, 2004).

A complete and consistent application of risk based assessment system which means better use of scarce resources can lead to better regulatory outcomes in small businesses. Health risk management is being addressed in small businesses as modifiable factor. This includes site health plans, hazard identification and monitoring, substitution of equipment as needed, effective health delivery systems and record keeping and reporting. Hazard identification and monitoring requires application at management level with knowledgeable input from occupational health program responsible. Training of supervisors and employees as well as cooperation of labour management is the key to effective propagation of risk controls. The workers need to be made aware of importance of these programs and appropriate safety recognition rewards can be designed to develop interest as well as eliminate critical risk behaviors in the workers.

Since construction industry carries an array of health hazards, small business owners need to progressively ensure risk assessment, effective coomunication and compliance for control of hazards (Coble, Haupt & Hinze, 2000) . Many discussions are going on in the construction industry to adopt the philosophy of continuous improvement. The internationalization of construction projects in recent years has exposed an imperative requirement to even small businesses for more technical sophistication, value addition, better service and lower costs to the customer.