When contractor compliance breaks down, operations stall, and safety risks rise. Missing certifications, expired training, or lapsed insurance can stop a project cold, forcing teams to pause, verify paperwork, and scramble to clear contractors before work can resume. These delays ripple through schedules, inflate labor costs, and expose facilities to fines or on-site incidents.
To illuminate these pressures, FacilityOS commissioned Manufacturing Dive to survey facilities managers across various industries, such as manufacturing, construction, logistics, warehousing, healthcare, pharmaceuticals, and transportation. The report highlights where current contractor compliance processes create friction and which improvements have the most significant impact.
We’ll walk through three core insights, each designed to help you evaluate your contractor compliance practices and discover targeted steps for smoother operations. Below, you’ll find each significant finding paired with key takeaways you can apply today.
Download the full Manufacturing Dive’s report for deeper analysis and strategic insights.
1. Compliance as an Efficiency Barrier
According to the report, two-thirds of facilities managers view contractor compliance as a top drag on productivity. Whether a site hosts five contractors on a light day or fifty at peak times, manual checks and back-and-forth approvals create bottlenecks. Waiting days for basic verification can cause project milestones to slip and crews to stand idle.
Paul Khakhan, CTO at FacilityOS, stresses that compliance tasks demand daily care, yet rarely add direct value to the end product. Instead, they become a roadblock. When teams juggle multiple spreadsheets, email chains, and paper forms, verifying a contractor’s credentials can save hours. Multiply those hours across dozens of vendors, and you will see why nearly 70% of survey participants cite compliance as their greatest efficiency hurdle.
The report highlights common failure points:
- missing or outdated documents
- fragmented storage systems
- unclear ownership of compliance tasks
What if a contractor arrived on-site only to discover their insurance certificate had expired the day before? The crew would need to wait for updated paperwork, pushing the job nearly a week backward. The cost of lost labor, rushed rescheduling, and project delays far outweigh the administrative effort to maintain a single certificate.
Takeaway: Centralize all compliance requirements into a single dashboard. That view should show every license, training record, and insurance form needed before anyone steps on-site, so teams aren’t left chasing paperwork mid-project.
2. Real-Time Tracking Gaps
Nearly half of all the facilities managers surveyed said they struggle to track compliance status as it happens, including 56% of those who report using specialized software for compliance management. The Manufacturing Dive’s findings also show that when teams review credentials only on a six-month or annual cycle, they leave blind spots that can lead to serious liabilities. An expired safety certification or a missed background check might go unnoticed until an incident reveals the gap.
Khakhan warns that lack of visibility puts organizations at risk legally and financially. He points out that a contractor may be scheduled weeks in advance without any system flagging an upcoming expiration. “By the time they arrive and check-in, the issue has already become a liability,” he notes. That kind of oversight can result in regulatory fines or injuries that trigger lawsuits.
The report outlines how manual and periodic checks simply cannot scale. Sites juggling dozens of vendors often rely on email reminders or outdated spreadsheets flagged by calendar alerts. Additionally, sites that use digital tools that cannot track compliance in real-time can lead to compliance gaps that put operations at risk. These stop-gap measures still hang expiry dates in limbo and force compliance teams into firefighting mode whenever a document lapses during an inspection or audit.
Takeaway: Implement a platform that continuously monitors every credential. It should send automated alerts long before expiration, prompt contractors to renew only the specific document in question and verify compliance at each entry point so you catch gaps before they become liabilities.
3. Software Frustrations Persist
It’s promising that 61% of survey participants have software they use for contractor compliance. Yet, 9 out of 10 of those users still encounter problems. Shallow automation, where teams must manually upload files, merge data between systems, or rebuild approvals, delivers limited value. Instead of streamlining work, it simply shifts effort into a new tool.
According to Khakhan, the ideal platform should shoulder the bulk of the process. “No matter how you choose to manage contractor compliance, you shouldn’t be the one holding everything together,” he emphasizes. The tool is doing too little if your team still acts as the “decision engine,” manually moving files or toggling between apps.
The report calls out these common pain points:
- Manual document capture that leaves room for human error
- Disconnected workflows requiring backups in spreadsheets or email threads
- Limited integration with badge-printing or access control systems
There is a distinction between specialized contractor compliance technology and generic digital tools or software used for contractor compliance. While the latter may assist in managing contractor compliance, it doesn't necessarily improve efficiency. Instead of streamlining the process, it merely transfers the workload to a new platform.
Takeaway: Assess software based on these features and solutions:
- Complete Compliance Oversight
- Easy And Quick Onboarding
- Integrated Visitor Management
- Part Of A Single Platform
Conclusion: Turning Insights into Action
The Manufacturing Dive survey, sponsored by FacilityOS, focuses on three clear themes: contractor compliance often drags down efficiency, real-time tracking gaps heighten the risk, and many specialist tools still fall short without full automation. Each insight drawn points to one solution: a unified, automated compliance platform.
Want to go deeper?
Download the full report to explore detailed data, case studies, and step-by-step best practices. Learn how manufacturing, construction, logistics, warehousing, and transportation leaders have turned compliance from a roadblock into a streamlined, risk-proof process, then discover which steps your team can take next.
