Getting Ahead of the Curve: Why Your Clients Are Auditing Service Providers – And How to Prepare
Tom Sewell
Social Sustainability Manager
5 Jun 2025
About 3 mins
If your company provides cleaning services, catering, security services, construction, or road transport, you may have noticed a significant shift: clients are scrutinising who’s delivering work on the ground and how that work gets done. This often means completing compliance questionnaires, undergoing social audits, or providing transparency about subcontracting arrangements.
This increased scrutiny might feel intrusive or overwhelming. However, understanding why service provider audits are becoming standard practice, and preparing effectively, can transform this challenge into a competitive advantage.
Why clients are conducting service provider compliance audits
Traditionally, businesses focused their ethical sourcing and sustainability efforts on product supply chains. However, regulatory pressure, stakeholder expectations, and broader corporate responsibility requirements are driving companies to examine their entire value chain, including contracted services.
Service providers often operate under conditions that present heightened compliance risks:
· Low-wage employment or insecure contract arrangements
· Irregular working hours or isolated work locations
· Complex subcontracting structures that reduce client visibility
· Reliance on migrant workers, agency staff, or minority ethnic workers who face greater vulnerability to exploitation
When labour violations occur – whether workers are underpaid, unfairly treated, improperly recruited, or exposed to unsafe conditions – the reputational damage, legal liability, and ethical responsibility extends beyond your business to your client’s organisation.
This is why clients are obligated to conduct due diligence on service providers. Human and labour rights audits demonstrate they’ve taken proactive steps to identify and mitigate risks across their supply chain.
What does a service provider audit involve?
Clients may request one or more of the following compliance assessments:
Self-assessment questionnaires (SAQs): Detailed forms examining your policies, practices, workforce conditions, and subcontractor management
Third-party social audits: Professional assessments involving document reviews, site inspections, and confidential interviews with management and workers
Compliance documentation: Evidence demonstrating adherence to labour laws, health and safety regulations, and responsible subcontracting practices
Supply chain transparency: Clear disclosure of who delivers services, including any subcontractors, agency workers, or temporary staff
While these audit requirements demand time and resources, they also provide opportunities to demonstrate professionalism, identify improvement areas, and strengthen client relationships.
Service provider audit preparation: Practical steps for success
Here’s how to prepare confidently when clients request compliance audits or assessments:
1. Map your complete workforce
Maintain accurate records of all workers – direct employees, subcontractors, and agency staff. Document contracts, working hours, wage payments, and all subcontracting relationships.
2. Strengthen your compliance policies
Ensure you have comprehensive written policies covering fair treatment, health and safety, working time regulations, and worker grievance procedures. Most importantly, verify these policies are actively implemented, not just documented.
3. Enhance subcontractor visibility
If you use subcontractors or agency workers, establish clear agreements outlining compliance expectations and monitoring responsibilities. Be prepared to explain your subcontractor oversight processes during audits.
4. Implement worker engagement systems
Provide safe, accessible channels for workers to raise concerns. Audits include confidential worker interviews, which help auditors understand whether workers have a voice and feel respected in their workplace.
5. Embrace transparency in audits
When completing compliance questionnaires or participating in social audits, respond honestly about current practices. Clients value transparency and commitment to improvement over claims of perfection.
Transforming service provider compliance into competitive advantage
Being included in a client’s audit programme may feel daunting initially, but it represents an opportunity to differentiate yourself as a trusted, responsible service provider. Your clients want to partner with businesses that share their values and can demonstrate genuine care for their workforce.
With service provider regulations and client expectations continuing to evolve, showing that your business takes ethical and legal responsibilities seriously can set you apart in competitive markets.
Preparing for the future of service provider audits
The trend toward comprehensive service supply chain auditing will only intensify. New audit methodologies specifically designed for service providers are emerging, including SMETA audits for services that address the unique compliance challenges facing your sector.
Service provider compliance isn’t just about meeting current requirements – it’s about building sustainable partnerships, protecting your reputation, and ensuring long-term business success.
