Business leaders understand that safety is important for an obvious reason: it prevents accidents in the workplace. Some decision makers, though, may feel implementing safety plans is too time consuming or requires too many costs up front to warrant the investment. As it turns out, however, safety is not only good for employees; it also makes business sense. Companies can incur significant savings in the long run by prioritizing safety.
According to the American Society of Safety Engineers (ASSE):
Companies that invest consistently in safety realize positive bottom line results, reduced absenteeism, lower turnover rates, higher productivity, increased employee morale and a positive brand image. Additionally, as illnesses, injuries and fatalities decline so to do health care and workers compensation costs.
The benefits of safety are numerous, but convincing your company to invest the required time and money in an effective safety plan can still be difficult. Many company leaders will have the business’ bottom line in mind, and spending money on safety may not be a priority. To help you convince your company that safety deserves attention, let’s take a look at some of the economic reasons safety is worthwhile. Additionally, we’ll include some resources you can use to back up these points with numbers.
Direct Costs of Workplace Accidents
If your company has ever experienced an accident resulting in an injury, then those in charge certainly know the direct costs of an incident can be significant. Workers’ compensation payments and medical expenses can pile up quickly, and those are bills no employer likes to see. Accidents can also result in higher insurance premiums, which add up over time. Having numerous accidents could also result in an OSHA inspection, which could lead to additional fines.
Indirect Costs of Workplace Accidents
Those direct costs may be the most visible monetary setbacks after a workplace accident, but the indirect costs can actually be significantly higher than the direct ones. According to OSHA, the ratio of indirect costs to direct costs can vary from 1:1 to as high as 20:1. Those costs can really add up, so let’s consider some of notable indirect costs.
• Lost Production Time – The injured employee will spend time away from work, other employees may have to dedicate time they would normally spend working to dealing with the accident and supervisors will have to spend time investigating and documenting the incident. All of those hours spent away from regular work cost the company money, both in employee wages and in lost production.
• Cleanup & Repair Time – If the accident damaged equipment or spilled hazardous chemicals, time will have to be spent cleaning up and repairing those things. That’s time that could be spent making your products.
• Damaged or Spoiled Products – When an accident is large enough to halt operations, your products may be damaged or spoiled as a result. For example, maybe an accident at a food processing plant results in product being spilled on the floor. That product is likely no longer usable, and that’s a loss of money for the company.
• Time Spent Training New Employees – Will your injured employee need to spend a significant amount of time away from work? If so, you may have to hire and train someone to fill in. Alternatively, if you don’t hire a new worker, other workers may have to work overtime, which can also become quite costly for the company.
• Negative PR – Nobody wants bad press, but an accident at your company could result in some news coverage that may not show your business in the best light. While company image may not have an immediate effect on the company’s bills, it can quickly have an impact on the amount of money coming in the door.
• Lower Worker Morale – An accident in the workplace can make other employees feel uncomfortable or less enthusiastic about doing their jobs. This can result in increased absenteeism and it can make it difficult for a company to retain employees.
Make the Case for Safety
Now that we’ve seen how many indirect costs come along with accidents, it’s time to think about this issue from the perspective of those giving safety managers the go-ahead to implement new safety programs. How will focusing on safety help the company in the long run?
This is when you can show company leaders how soon they’ll see a return on their investment. If they spend a certain amount of money now, they’re going to want to know how long it will take for those dollars to pay off. ASSE offers some resources detailing return on investment in the safety industry, and the Center for Construction Research and Training provides a return on investment calculator. Come up with a few safety improvement scenarios that the company could pursue and show how quickly those up-front costs will pay off. Maybe they could purchase a new type of PPE or invest in new safety signs in a certain area. Think about what is most relevant to your facility and show why it matters.
You can also use OSHA’s $afety Pays tool to help calculate indirect costs for accidents. Doing this using recent accident data from your company can really demonstrate to decision makers that safety now will save money later.
Finally, point out that lacking a safety program will not only result in costly injuries, it may also make the business less competitive. A company’s accident and injury history can impact things like insurance premiums, and it can also damage the company’s ability to get jobs. If the business does contract work for others, those people may opt for companies with better safety records.
Recent studies show that for every dollar spent on safety programs, four to six dollars are actually saved. Numbers like that will grab attention, so go to your employer with the statistics and facts to show why safety is good for people and for business.
- Social Distancing Signs– creativesafetysupply.com
- OSHA Incident Rates and Formulas– creativesafetysupply.com
- ROI on Safety – Increase the Bottom Line– blog.creativesafetysupply.com
- Mistakes Can Be Good for Business– lean-news.com
- How Much Does an Ergonomic Injury Cost?– creativesafetypublishing.com
- How to Start a Health and Safety Management System– safetyblognews.com
- Lean and Kaizen are not meant to eliminate People– blog.5stoday.com
- How to Select a Good Six Sigma Project– iecieeechallenge.org
- Hello Safety, My Name Is Lean– 5snews.com