10 Key Factors in Risk Tolerance

Pangea is fully committed to providing a safe workplace for employees and instilling a safety culture that goes beyond general compliance standards. As our path towards Project Management is being solidified, we need to embrace the belief that our employee’s safety is more important than the job itself.

The concept of “safety culture” in the workplace has evolved significantly over the past 50 years, while there is always room for growth, the industry has reached a point in which even the smallest “near-miss” is considered a key indicator in determining preventative actions and protocols to avoid injury. Thus, several programs have been initiated across the industry to significantly reduce the number of onsite injuries (i.e. Observation and Intervention, Mining the Diamond, etc.).

Organizations have repeatedly demonstrated that instilling a culture that goes beyond compliance obtaining an honest commitment from the employees, further reduces probability of onsite injury. At this point, people understand they are responsible for their own safety and that of their peers because it is “the right thing to do” instead of just complying due to fear of reprimand.

In trying to understand why incidents occur, pioneers in the safety field have delved further uncovering that the psychological frame of reference of each individual is key in determining the likelihood of an individual getting hurt. Consequently, the term “Risk Tolerance” was introduced a few years ago as a way to evaluate factors that influence a decision to either accept or reduce risk. How these factors are perceived and weighed in the mind of the worker and the work group affects safety behavior.

Key individuals in major Oil & Gas operators who are leading the proliferation of the concept and has said that the brain’s risk assessment process works in three ways; Exposure (hazard recognition), Perception (knowing what impact a risk might have) and Decision (accepting, mitigating or rejection the risk).

Insights on Risk Tolerance

  • People across diverse cultures with various work backgrounds and with different personal experiences demonstrate variability in how much risk they are prepared to accept (on and off the job).
  • Safe and at-risk behaviors are the result of a multistage process that includes:
  • Hazard Recognition
  • Risk Perception
  • Risk Tolerance
  • A simple model that shows the relationship between hazard recognition, risk perception and risk tolerance is needed to reduce the personal and group acceptance of risk.
  • While existing SSH&E systems focus primarily on hazard recognition, more direct focus on risk perception and tolerance is needed to enhance the effectiveness

Key Risk Tolerance Concepts

  • What is a Hazard?
  • A condition or situation that could create an incident
  • What is Perception?
  • Process to add meaning to received information • Influenced by our knowledge and experience
  • What is Risk Perception?
  • Subjective judgment we make about the characteristics and severity of risk, specifically What could go wrong?
  • How bad could it be?
  • What is Risk Tolerance?
  • The amount of risk that an individual or group is willing to accept in the pursuit of some goal.

It is important to note that human behavior is determined more by perceived rather than by actual risk.

There are 10 Key Influencing Factors in Risk Tolerance

  1. Overestimating Capability or Experience
  2. Familiarity with the Task – especially among senior workers. “I have been doing this for 20 years…”
  3. Seriousness of Outcome – something that can be diminished by the terminology used. For example, the oil and gas industry term “sweet gas,” which refers to the dangerous hydrogen sulfide and the phrase, “pinch point,” which actually could be designating an amputation hazard.
  4. Voluntary Actions and Being in Control – comes into play a great deal outside of work. A survey of Caterpillar’s industrial employees found that 90 percent of their injuries occurred off the job (although those injuries often affected the worker’s ability to do the job).
  5. Personal Experience with an Outcome – As organizations get safer and safer, you’re going to get fewer and fewer people who’ve had a personal experience with a serious outcome. The new people won’t understand it. They don’t remember it because they have never experienced it. Hence, senior workers can be helpful in communicating about serious incidents to newer workers.
  6. Cost of Compliance/Non-Compliance – “How is this going to affect me?”
  7. Confidence in the Equipment – It can actually be overconfidence
  8. Confidence in Protection and Rescue – Some oil and gas companies found that after they handed out the Nomex (FRC) apparel, which doesn’t burn – the incidence of burn injuries increased, because what’s underneath the suit burns. Impact resistant gloves and gas detectors that can only detect certain gases may also lead to an overly optimistic reliance on them
  9. Potential Profit or Gain from Actions – “When we can gain, we accept more risk”. For example, longer working hours that yield bigger paychecks but can cause fatigue-related risks. He encouraged safety professionals to go back to their workplaces and evaluate practices that may be creating incentives to accept more risk.
  10. Role Models Accepting Risk – Because of personality or experience, leaders in a group or organization can have a powerful effect on those around them.

By implementing these key factors into our Safety Programs, we will better understand and influence risk tolerance in the workplace. Generally, we may have an acceptance of risk that is too high, but clear guidelines and procedures along with an established safety culture are needed to help workers with these risk-based decisions. Therefore, the employee will be better positioned to make sound decisions on whether the risk is low enough to be acceptable/ manageable, change in approach is necessary, are steps needed to mitigate the risk, or simply refuse to perform the task if conditions are unsafe until resolved.

We encourage you to visit our website www.pangeasite.com to learn more about Pangea’s commitment to safety.

Pangea Publication Launches 2017 Year

Due to our continued growth and innovation, Pangea has been selected to be the subject of an article for the Construction In Focus magazine.

The article will be appearing in their December issue that is distributed to over 112,000 subscribers. The content of the article was developed through an exclusive interview with our President and CEO, Marco Pesquera.

Mr. Pesquera covered a range of topics with our experiences in the foreign skilled labor market and our expansion into project management and the changes this brings. At Pangea we provide project management services such as construction management, procurement services, interface management, and budget and schedule oversight. We are committed to exceeding our clients’ expectations by focusing quality, safety, and profitability.

With over 40 years of experience, Construction In Focus keeps their readers up to date on the latest news and events in the industry by highlighting leading construction, design, and architectural firms. Their focus is to conduct in-depth, one-on-one interviews with top representatives, such as managers, Founders, CEOs, and State Officials, in these firms.

You can also find informative features on prominent organizations, institutes, associations, and government departments whose actions and policies have a direct impact on the construction industry.

CLICK HERE  to read our feature on pages 42-45.

Craft Labor Hours Forecasted to Peak in 2018

According to VP of Craft Labor Forecast at Industrial Info Resources’ (IIR), Tony Salemme, stated at the 2016 Petrochemical Update’s Refining, Engineering & Construction Conference, that there will be 163.6 million craft labor hours that will be needed at the peak of 2018. Previous expectations were recorded, as only 160 million hours would be needed.

Originally, Industrial Info Resources predicted the peak of craft labor hours would come in 2016 based on data collected, but revised this to 2017 before revising the numbers again to 2018. It has been forecasted that these numbers will fall to 128 million hours in 2019 and 115.6 million hours in 2020 as major downstream projects will be completed by then. In previous years between 2013 and 2015, craft labor hours jumped 29.5% to 153.4 million.

Billion dollar projects spiked in construction around June 2014, October 2014, January 2015, and June 2015 but there was a collapse in project starts, which caused the Gulf Coast to have starts on 810 smaller projects. These billion dollar projects have remained constant since early 2015 due to the overlap of several ethylene mega projects such as Dow Chemical, Chevron Phillips Chemical, ExxonMobil Chemical, and Formosa Plastic Plants, which are all being built in Texas. They are all on track to start up in 2017.

There is an optimistic outlook in the upcoming year for downstream construction in the industry and with Pangea transitioning to Project Management, we will be better prepared to market ourselves to our clients by providing them the best cost effective service for their projects.

Visit our website at www.pangeasite.com to learn more about our services.

Factors Affecting Labor Productivity

Construction is the world’s largest and most challenging industry. It is a key sector of the national economy for countries all around the world. It takes up a big portion of the nation’s employment and it significantly contributes to our nation’s revenue.

However, the construction industry is still facing a number of problems regarding low productivity, substandard safety and poor quality. Productivity is the one of the most important factors that affects the overall performance of any small, medium, or large construction industry company. There are a number of factors that directly affects the productivity of labor, so it is important for any company to identify those factors and take appropriate actions to improve the labor productivity.

Every year companies and contractors are hit with millions of dollars in construction claims and lawsuits as a result of many factors that impact their labor. For example, there are several factors that affect labor productivity losses during the development of construction projects:

  • The weather is a significant cause of lost productivity when performing work in a change of season, temperature zone, or climate change which can result in work being performed in either very hot or cold weather, rain or snow, or other changes in temperature or climate that can impact workers beyond normal conditions.
  • Crowding and stacking of trades can impact by having multiple contractors working in an area that was not otherwise anticipated. It can have a significant impact when work takes place within physically limited space with other contractors, which can result in safety hazards, congestion of personnel, and an increase of visitors.
  • The lack of skilled labor has a direct impact on the schedule, many times causing the contractor to implement alternatives that seek ways to accelerate their work to overcome and compensate delays, ensuring the maintenance of a steady workforce. It’s been proved how difficult it is to recover additional compensation and quality time due to the unavailability of manpower; therefore it’s a must to develop a sound strategy to deal with skilled labor.
  • The morale and attitude of workers can be based on the willingness, confidence, discipline, and cheerfulness to perform work or tasks which can be lowered due to a variety of issues, such as increased conflicts, disputes, overtime, over-inspection, poor site conditions, excessive hazards, unkempt workspace, multiple contract changes, and so on.
  • Scheduled overtime work can have an unfavorable impact on productivity. When scheduling extended work days or weeks that exceeds a standard eight-hour work day or 40 hour work week can lower work output and efficiency through physical fatigue and poor mental attitude.

At Pangea we are determined to have the right project management team in place; a group of professionals with a good sense of anticipation and great planning skills to master execution, ensuring operational and business compliance that mitigates the possibility of occurrence of lack of productivity, delays and cost efficiencies. We encourage you to check out our website www.pangeasite.com to learn more.