At McLeod Cranes, we love health and safety—it’s the backbone of our business. Our operators thrive under a great HSE system we’ve honed and trust.
But when clients ask us to duplicate safety processes to fit their third-party systems, we hit a snag: compliance costs.
It’s got us thinking: Do all subcontractors now need a Safety Adjustment Factor (SAF) to pair with the industry’s Fuel Adjustment Factor (FAF)?
The Compliance Creep
Safety’s our core - no debate there. Our system keeps our team safe and jobs rolling.
The catch? Some clients require us to mirror that effort in their platforms - subscriptions (per-operator fees) and admin time that currently cost us $50,000 a year.
We’re not bolstering our safety; we’re duplicating processes to give them visibility into it.
That $50,000 isn’t set either - it’ll climb as their systems evolve or admin demands grow.
If you’re in construction or transport, you’ve probably felt this pinch too.
Could a SAF Be the Answer?
Imagine a Safety Adjustment Factor (SAF) - a variable percentage on invoices only for customers requiring us to duplicate safety processes to meet their system requirements. It’s about two realities:
Staying Competitive: Folding these costs into our base crane hire rates would jack up prices for all—even clients fine with our existing setup. That’s a competitive dead end. An SAF keeps our core rates lean.
Recovering Costs: Customers asking us to mirror our safety efforts in their systems create a cost we can’t absorb. A SAF could recover our current $50,000 - or whatever it becomes - from those driving the duplication, not everyone.
It’d mimic the FAF: a transparent, flexible charge tied to their asks.
Target? Cover today’s $50,000 annually, roughly $4,166.67 a month, adjusting as costs shift. The SAF would flex monthly - say, 1% as an example.
Bill $416,667 to SAF clients in a month, and 1% hits the mark. Under-recover? Rate rises. Over-recover? It drops. A $5,000 job at 1%? That’s $50 - separate and adaptable.
Plus, it links to consumption: the more contracts using McLeod, the faster we recover costs, and the lower the SAF falls.
Here’s the advantage: a SAF gives both parties a true perspective on the cost of systems they introduce—us and them. No hidden burdens, just clarity.
The Subcontractor Dilemma
This isn’t just McLeod’s puzzle - it’s an industry wave.
Safety laws push accountability up (fair enough), but subcontractors get the ripple: clients demand system alignment, and we foot the bill - $50,000 today, more tomorrow.
We’re all in for safety, but without a way to reflect these client-driven costs, it’s raise rates (and lose jobs) or eat it (and strain margins).
A SAF could balance that, shining a light on duplication costs. So, should all subcontractors consider it?
Let’s Discuss
We’re not rolling out an SAF yet - just kicking the tires.
We think it’s an option worth exploring, and we encourage other subcontractors to consider a SAF for cost transparency too.
Do all subcontractors need one to navigate this compliance creep? Could usage-based systems (pay per use, not per head) work instead? Or a shared API to nix duplication? We adore safety and want costs to land fairly as the landscape shifts.
If you’re a subcontractor facing this - or a client with thoughts - chime in.
Do we all need an SAF, or is there a smarter path to transparency?
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