Managing Risk with Contract Aviation Maintenance Labor
Today’s business environment requires companies to develop strong risk management programs that incorporate vendor risk assessments. And no where is this requirement more critical than aviation maintenance. As the importance of outsourcing grows in aviation maintenance, it is paramount that aviation organizations carefully select service providers who incorporate strong risk management features into their program management plans and service offerings.
While airlines and MROs increasingly turn to contract aviation maintenance labor to staff aircraft maintenance programs in their facilities and in third party aviation maintenance facilities, the monitoring of these contracted workforces by aircraft operators has not kept pace with the growth. According to Reliance Aerotech Services’ 5th Annual Aviation Maintenance Industry Survey, well over half of the respondents were unsure or did not know what types of insurance their contract labor firms carried. Further, the majority of respondents said they had no process or relied on “whoever gets me people the fastest” to source contract labor vendors and a significant number of maintenance organizations accepted contractors from staffing firms without thorough screening investigations.
How Reliance Manages Risk for Your Aircraft Maintenance Organization
As the aviation industry specialists, Reliance Aerotech Services understands the risk in aircraft maintenance and has invested in a comprehensive risk management program to help aviation maintenance customers mitigate the risk potential posed by contract maintenance labor.
Our proactive approach towards risk management in aviation maintenance separates what we offer from the services other staffing companies in several key areas:
Aircraft Liability Risk: As the aviation industry specialist, Reliance maintains a comprehensive aviation liability policy that includes hangar keeper’s coverage and aviation products liability coverage. Many staffing providers operate with a basic general business liability policy that provides no coverage related to aircraft maintenance and operations. To appropriately mitigate risk associated with aircraft maintenance, maintenance organizations need to evaluate staffing companies to ensure they are not putting their company in jeopardy by contracting services to firms without adequate insurance in place. With Reliance, your company knows how we manage this risk and we provide you the documentation to prove it.
Worker Status: Reliance has established high quality, redundant, processes to ensure that every employee we mobilize to support our customers’ needs is appropriately screened with regard to criminal history, drug use, skills, qualification standards, FAA standing (if applicable), and legal worker status. Federal officials are scrutinizing aviation maintenance facilities more closely than ever before as evidenced by recent media stories regarding illegal aliens in MROs. With Reliance, you never need to worry that an employee we provide meets the appropriate legal requirements. We provide you with the relevant back-up for each individual.
Worker Classification: Reliance is the aviation industry expert with regard to Worker Classification. We never put ourselves and our customers at risk by improperly classifying workers for financial gain. Some aviation organizations either contract with aviation workers as 1099 Independent Contractors themselves, or receive support from service providers who do the same. Even in cases where this practice is undertaken exclusively by a service provider, improper classification can lead to well documented liability issues related to workplace injury claims, overtime pay and income tax rules. Such practices can have serious financial consequences to the provider and the customer. With Reliance, you never have to worry that we put your company through improper worker classification for financial gain.
Vendor insolvency: As a well capitalized, professionally managed company with more than a decade of aviation industry experience, Reliance gives customers peace of mind that we are with them for the long term. Nearly all aviation maintenance organizations have to deal with a demanding production schedule so when a staffing company misses their payroll obligations or otherwise become insolvent, the resulting talent exodus can be immediately devastating to the customer. With Reliance, you can be certain we are with you for the life of your aviation staffing program.
Assessing Risk in Your Aviation Maintenance Organization
As part of our path of professionalism for the aviation staffing industry, we strongly encourage maintenance organizations to take a comprehensive review of contract maintenance providers in their facilities. This practice ensures that you are receiving maximum value from your investment and are certain that each vendor is ensuring all your risk factors are mitigated.
To help guide aviation maintenance organizations through this process, Reliance Aerotech Services has developed an Aviation Staffing Firm (ASF) audit checklist. The ASF audit is designed to ensure aviation maintenance organizations know what questions to ask their staffing firms when conducting an audit so they can effectively assess the risk associated with using a staffing firm and the all in costs in choosing a vendor. Whether your organization is currently using a standard in-house vendor audit, or doing no audit at all, we strongly recommend that you implement the ASF Audit which has been developed exclusively for auditing staffing firms. The ASF audit will ensure that your airline or MRO is appropriately managing risk when using the services of a staffing firm in your facility or in a third party facility.