Changing corporate strategies, consumer demand, market forces, global pandemics, and numerous micro and economic factors are the driving forces behind the need to outsource Environmental, Health, and Safety (EHS) functions. While many studies have been conducted to assess this phenomenon, understanding the need for these services is simple, company’s need help and they need it now!
For over 30 years TRC has been providing EHS outsourcing services to industry. At face value, the outsourcing of EH&S functions might seem like a win-win for both the consultant (billable hours) and the client (they finally get the support they need). However, there are challenges that need to be considered by both sides to ensure that this relationship benefits both the client as well as the consultant.
The Good
- Communication. Like personal relationships, the key to any successfully outsourcing relationship relies on good communication. For the client this means clearly documenting the roles, responsibilities, and duration of the position that they need to fill. For the consultant, this means carefully listening to the client’s needs and identifying the right internal staff with the necessary expertise and experience for the outsourcing role. A good consultant will not be afraid to turn down an opportunity if they don’t have staff who are the right fit for the role.
- Expertise. While this might seem obvious, many clients don’t appreciate that by outsourcing EHS functions, they are able to tap into the consultant’s full wealth of technical talent so that when unusual problems crop up, they can often be quickly resolved.
- Responsiveness. Hiring staff in the best of times is a time consuming and challenging and in today’s highly competitive labor market is particularly difficult. By outsourcing EHS functions, clients can often get the support they need in a matter of days, rather than months.
- Insight. For consultants, providing clients with internal EH&S support often provides them valuable insight into the clients they serve. This insight can be used to pursue additional opportunities within the client’s organization or propose solutions to solve client problems.
- Cost. While not always significant, the outsourcing of corporate EHS functions is usually a more cost-effective option when compared to the costs required to identify and hire a similarly qualified full-time internal EHS professional (including costs for benefits).
The Bad
- Communication. When the roles and responsibilities of the outsourced EHS position are not well defined this can lead to challenges for both consultant and client. Typically, these challenges can be quickly overcome, but poor communication can slow down the integration process and in the short-term limit the effectiveness of the outsourced professional.
- Contracts. Outsourcing is a very different type of project than a typical consultant to client project. In TRC’s experience it’s important that the contract between the two parties reflective these differences and is specific to the outsourcing opportunity and needs of the client.
- Expertise. The outsourcing of EHS talent can lead to the temporary loss of talent within the consulting firm. For small firms this loss of talent can be significant, while it’s impact on larger firms is typically negligible.
- Reliance – In TRC’s experience over relying on the consultant can harms a company’s EHS program. The outsourced relationship works best when the consultant provides guidance and recommendations and the client is the decision maker. In addition, legally there are some responsibilities that cannot be delegated to the outsourced consultant including signing hazardous waste manifests, filling out OSHA logs, and conducting internal accident investigations.
- Know Your Industry. Some industries are complex and involve higher risk operations, such as the chemical industry. Therefore, there is typically a large learning curve to effectively outsource an EHS function to these industries. In TRC’s experience, outsourced EHS functions in process-intensive industries needs to be done very carefully and on a case by case basis. For the Company in these industries, outsourcing EHS functions to a consultant can lead to the loss of internal institutional knowledge that is difficult to replace.
The Ugly
There is no ugly! In TRC’s experience the outsourcing of EHS functions is a mutually beneficial relationship for both the client and consultant. We expect the demand for outsourced EHS professionals to continue to grow in 2021 and beyond.