No Money for Safety?

By: Tamara McCanty – Safety Engineer for Safety Alliance, LLC

“Times are tough.”  “We have to do more with less.”  “Everyone must do their part and tighten   their belts.”  Does this sound familiar to you?  There is no doubt that the current state of the economy is creating a tough market these days.  So what is a company to do?  Companies are trying to adjust to the changing times by cutting internal costs as much as possible.  Trim the fat, so to speak.  More and more, I am seeing that “trim the fat” has been translated by companies to mean “get rid of the safety person” or “cut back on safety”.  The safety person is often viewed as an “extra” position within the company.  I personally am a strong advocate for safety being a shared responsibility by everyone within a company, but I know for a fact that the “safety person” is one of the most important positions to maintain in a company.  So the question then becomes: how do we educate others on the importance of safety? And how does safety pay off?

We all know that a well planed company safety program can reduce injuries.  Is that important?  After all, your company has worker’s compensation insurance.  Won’t that cover things?  No, it does not.  Aside from normal compassion (no one ever wants to see an employee get hurt), companies must realize that worker’s compensation insurance only covers some of the costs associated with injuries.  The employee is protected from loss by having medical bills and lost wages compensated.  But the company still has extra costs with an injury.  Each and every injury has a huge toll on the company.  There may be direct costs, such as a loss of product from the accident or time spent training a replacement worker.  There will also be many indirect costs, such as loss of company morale or damage to company reputation.  How do you put a price tag on that?  The truth is, you can’t.  But a loss is a loss, and if you are trying to keep your company profitable, you cannot afford any loss.

I recently plugged some numbers into OSHA’s “$afety Pays” program.  (By the way, this is a free OSHA program, available on their web site.  Check it out some time.)  I will admit that even I was surprised by the results.  The program estimates the impact that just one injury can have on a company’s profit margin.  This is the bottom line for direct and indirect costs.  How will each injury affect the company?  Finally, a way to “justify” safety and to measure all those costs.  I’ll give you an example: Assume your company has a 3%  profit margin on services and you have just had an employee injure their back.  Your company is likely to pay over $27,000 in direct costs (medical bills, lost time, etc.) and another $30,000 in indirect costs (time lost due to the accident, training another employee to fill in, damaged materials).  With a small profit margin the company now has to make over $ 1,915,400 in sales to cover the cost of this one injury.  Wow!  That can be huge, especially for a small company.  Now, compare that cost to the cost of having one of your supervisors conduct a back safety training session and complete regular safety audits.  Seems pretty easy to see how investing in safety can pay off in a big way.

Enough of the scare tactics.  How about some good news.  No one wants to spend money training and re-training employees due to excessive employee turnover, and, let’s face it; we all can’t afford those huge bonuses that Wall Street is handing out to “keep quality employees”.  Well, here is another way that safety can pay off.  Research has shown that employees who completed a safety orientation program showed a higher level of commitment to their employer than these who skipped the program.  An effective orientation program can also help reduce employee anxiety.  This is the company’s first chance to ensure success from the start.  Successful orientation programs will not only educate, they will motivate and empower, as well.  Now, just picture a workforce of well trained, motivated, and empowered employees working with the company to stay ahead in these tough times.  Can you say “competitive edge”?

Need more justification?  Well, how about those bid packages you have to complete.  How many of those ask for a copy of your safety program and your EMR?  Even if you already have a great safety program, you must stay current.  Regulations change, technology changes, best practices evolve, and your safety program must stay current, too.  Who will keep you current?  Why, your safety person, of course!  I wish I could guarantee that your company will get every bid just based on your safety program, but we know that is not true.  What I can say for sure is that without a strong safety program, you will certainly get less and less bids.

Now, still looking for money for safety?  Let me go back to the first paragraph.  I mentioned that safety is a shared responsibility.  That means safety is shared by each and every employee within the company.  If your safety program is strong, and I hope that it is, you should already have trained and empowered your employees.  Now is the time to look to your employees for help.  Form a safety committee.  Let the employees research more cost effective ways to perform tasks.  Perhaps your employees can come up with a simple solution to help keep safety glasses usable for longer.  Maybe a well trained employee remembered hearing in a safety class that lanyards that are cleaned and properly maintained will last longer, leading to less money spent replacing them.  You may find that you can control safety costs, without sacrificing the overall quality of safety for your employees.

Economists keep saying that things will turn around and that businesses will rebound.  We all hope that will happen soon, but in the mean time, we will all tighten our belts, and do more with less, as long as safety stays a priority.