Safety & HCM Post

Safety Begins With Management

One would think that selling safety within an organization would be a simple task – a return on investment that any company would embrace with open arms. But it’s not that easy when a safety culture is a mere afterthought or doesn’t even exist.

The hard part is convincing management that it needs a regimen of safety training and that, quite frankly, it cannot afford a lax attitude towards it.

The trick is having everyone from the new hires up to the president of the company buy into this culture that will save the corporation a lot of money and legal headaches, and show everyone that it is doing the right thing to protect its employees. At the end of the day, it’s all about the safety of your workers, not how much the company made. Think about it . . . without safe workers, you don’t really have a company, or one that will see long-term success.

The fact is corporations are legally obligated to keep their employees safe. Those who don’t are saddled with workers’ compensation nightmares that are hard to wake up from. But knowing that a worker died because a hazard was overlooked is a far greater weight to carry.

Selling safety in your organization starts with demonstrating why it is so important. This takes research and talking to safety professionals about developing a culture that everyone can support. Once you do that, the foundation for effective safety training is set, and management (and employees) will be less resistant to change.

There are many ways you can sell safety. One of the best is outlining the return on investment. This is what senior managers want to hear.

A hard-hitting way to sell safety training is to introduce your managers to someone who suffered a serious injury on the job.

James worked for a small construction company that didn’t have the proper fall-arrest equipment for one particular job that was overdue for completion. The supervisor approved a make-shift rope harness that came loose while James was using it. He fell 20 feet to the ground and ended up in a body cast for six months. He was paralyzed and not expected to work again. His family sued the company and won. It was an open and shut case that clearly showed the company’s lack of due diligence.

Too often we see workers take shortcuts because they are under pressure by their supervisors to get the job done  – a dangerous trend that puts profit ahead of safety with devastating results.

A safety culture cannot thrive without resources, disciplined safety programs and a management system to make it work. Managers and supervisors must be good salesmen in selling safety to their employees. They must demonstrate by example. When workers see their own bosses ignoring safety protocols on the job site, this safety culture begins to unravel and everyone becomes complacent to the hazards.

How do your employees perceive safety on the job? Using anonymous questionnaires is a good start. It also shows that the company values workers’ opinions, which can pave the way for buy-in. Do they feel adequately trained to do the job safely? Do they feel confident in identifying hazards without repercussions?

Developing a safety culture is one thing, but getting the budget to keep it going is another. Workplace safety doesn’t improve on its own; it needs financial commitment. Senior management must be convinced that the company can increase its profits by reducing injuries.  Outline the cost of risk and the associated insurance premiums. Once they see the dollars involved, they may change their tune and relax their vice-like grip on the budget.

Loss prevention is a great way to increase profits, so come prepared with examples during your next meeting with a senior manager.

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Cost of Risk Example

Donald J Eckenfelder presented the following model on the ROI of safety training in his book, Values-Driven Safety.

Take a manufacturing company with an annual revenue of $100M, earning an Industry average operating profit of 5-10%.

According to OSHA statistics, the average cost of safety risk hovers between a low of 0.25% of total revenue for a company with 10 years of a solid safety record to upwards of 1.5% for a company with a poor safety record. The average cost of safety risk in North America is 0.75%.

What does that mean in dollars and cents? For our $100M company, the annual cost of insurance and accidents is $750K. If it had a solid track record of safety, it could save $500k each year.

But this excludes all the hidden costs such as low employee moralepoor productivity, and poor company reputation. So in reality, our $100M company could conservatively save upwards of $1M by improving its safety culture and safety record.

If 1% of total revenue isn’t that compelling, look at the numbers from the bottom up.

Our $100M company earns an annual operating profit of 5-10% – let’s say an average of $7.5M. If the average tax rate is 35%, the net profit (ignoring any and all after the line deductions that EVERY company in North America has) is actually $4.875M. The shareholders are probably happy! Now our $1M savings from a better safety record is actually equivalent to over 20% of net profits… that’s pretty compelling to any businessman!

In other words, loss and accident prevention through better safety training is an easy way to enhance profits.

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Selling safety can be a real chore when you’re faced with indifference or tight purse strings. But not buying it can be a much harder pill to swallow.

bongardecor

bongardecor

Comments

  1. steve and judy uzelac

    steve and judy uzelac, March 25, 2015

    Reply

    One would think that safety would be part of every
    organizations mission. I’ve seen
    organizations with great and driven focus and I’ve seen organizations talk
    without the walk. This is my
    question. How do you look a family in
    the eyes and tell them their loved one was injured or killed on the job,
    because you did not put safety first?

    • Nebosh IGC Training

      Nebosh IGC Training, October 15, 2015

      Reply

      Steve you are saying the right thing.

  2. sumathi

    sumathi, October 9, 2015

    Reply

    Hi ! Greetings ! Thanks for Sharing ! I like the Risk Example.

  3. Nebosh IGC Training

    Nebosh IGC Training, October 15, 2015

    Reply

    no doubt!

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