March 2, 2015 Leave a comment
Employers are trained to scrutinize the bottom line. They labor over complex financial statements, approving initiatives that make sound business sense and discarding those that don’t. Safety, with its financial and time commitments, is too often a casualty of that process.
In our last post, we explained how employee wellness programs boost the bottom line. In this post, we’ll make a business case for workplace safety. There’s no better way to start than by looking at the costs associated with workplace accidents.
Consider the costs of workplace accidents
In this two-minute video, an employer explains how workplace safety has boosted his bottom line and improved employee morale.
Any discussion of cost has to start with your employees. You care about them, and you want to protect them from the human cost of pain and suffering. On the financial front, you also have to consider the monetary costs associated with workplace accidents, starting with direct costs.
Direct costs include medical and wage-replacement benefits for injured workers. You might be thinking, “I don’t have to worry about those costs, because my workers’ comp carrier covers them.” And you know what? You’re right. But those costs eventually trickle down to your premiums. It works just like your auto insurance.
If you’ve ever been in an accident, and most of us have, your first priority was probably making sure everyone was okay. It probably didn’t take long for you wonder how the accident would affect your auto insurance premium. The same principle applies in workers’ comp insurance.
The second type of cost is more elusive than direct cost. It is called indirect cost, and it includes things like repairing equipment that was damaged in the accident, the administrative costs of filing the claim, and making up for lost production if the injured worker cannot immediately return to the team.
Studies vary on the impact of indirect costs, but most agree they can be up to four times higher than direct costs. And unlike direct costs, indirect costs come out of your pocket.
By focusing on workplace safety, you can control workplace accidents and reduce their associated costs. Ultimately, you could reap up to a 600 percent return on your investment, according to the Occupational Safety and Health Administration.
Build your safety program on these core elements
Every industry has unique hazards, and businesses should customize their safety programs to meet their needs. But here are some core elements that apply to any solid safety program:
- Management leadership. Management should invest the resources necessary to improve safety, and they should follow the same safety rules they expect employees to follow.
- Employee participation. Management should encourage employees to help develop the safety program and continuously improve it. Consider forming a safety committee with representatives from all levels of the organization. When employees feel a sense of ownership of the safety program, they are more likely to embrace it.
- Hazard identification. Your employees know their jobs better than anyone. Enlist their help in identifying workplace hazards before they result in injuries.
- Hazard prevention and control. Take steps to protect employees from the hazards you identify.
- Education and training. Provide safety training to new employees and veteran employees who take on new tasks. Safety training should be an ongoing initiative, with refresher training throughout the year.
- Evaluation and improvement. The best safety programs constantly evolve to address changing needs. Empower your employees to help evaluate and improve the safety program.
In our next post, we will explore the symbiotic relationship between employee wellness and safety. In the meantime, here are some resources to help you on your road to a safer workplace.
- The business case for safety and health
- Injury and illness prevention programs
- OSHA’s interactive hazard identification game
- “Want to Reap the Benefits of Safety?“
- “At Standard Energy, Safety is Mission Critical“
- “Your E-Mod – How to Reduce it, and Why You Should
- Doing it Right is More than a Slogan at Western Hot Oil“
- “Injury and Illness Prevention Programs White Paper“
Previous posts in this series
This post is part of a series on the symbiotic relationship between employee wellness programs and workplace safety. To read previous installments, click on these links: