Let me ask you, why do you want a safe workplace?
The reason should be twofold:
- The moral reason that you do not want to see any of your team members injured, or worse
- The legal reason that it is your company’s responsibility to ensure the safety of your team as best you can
A safe workplace is also a profitable one; you can’t operate a business unless it is both profitable and safe. If the cost of unsafe practices at your workplace is causing your business to be less profitable, then it is time for a change. You want your business to move to a place where the safety measures you establish show a real return on your investment.
To do that, you need to understand that through cultural change, your costs and benefits can change too, that you need to transform your safety efforts from a reactive model to a proactive one, and finally that you need to take a long-term view to land your business in the pay off zone.
Let’s explore how you can do that.
Cultural Change Means A Change In Costs Too
Workplace accidents are expensive. The direct costs to your business (like medical bills and compensation) are bad enough. But they are just the tip of the iceberg. Depending on your industry the indirect costs to your business can be as much as 50 times more than the direct costs. That means, for every $1 you spend in direct costs, it can cost you another $50 in indirect costs.
They include things like…
- Lost time when other employees need to stop work
- Time spent giving first aid attention
- Costs associated with damaged machines, tools and materials
- Costs due to interruption of production and the inability to fulfil orders
- Costs to the company under the employee welfare and benefit system
- The cost to keep your employee working, but not in their regular job
- Overhead expenses that continue although the employee can’t work
- Time lost by other assisting the victim, investigating the incident, reporting and retraining
To prevent these indirect costs from occurring, there needs to be a change in the culture at your workplace. When it comes to workplace safety, a lot of research examines the cost of each incident and how to reduce them with safety initiatives.
However, the focus should not be on managing the risk of each incident. It should instead be on the Return On Investment your business could achieve by preventing incidents completely.
A case for business safety has been developed using the Boulton Model and displayed in this graphic. What the graph shows is that the cost and effort of safety management increase faster than the rewards of increased safety, until it reaches a tipping point. Once you go beyond that point, you will see a significant return on your safety investment.
But, how can you get to that point?
Changing From Reactive To Proactive
In order to achieve the results you desire, your workplace needs to have a great safety culture.
That culture centres around the theory of safety leadership, rather than safety management. Your safety leaders must work hard to correctly influence the rest of the workforce. Their safety practices should have meaning and practical use to get the rest of the team on board.
Every single person in your workforce needs to be focused on safety. They cannot simply go through the motions. They must fully support a safety culture and see the benefits of doing so. This will see your safety practices go from reactive to proactive. You will stop needing putting out the fires as they happen, and actually be able to plan ahead to manage and control the risks before they become a factor.
Only when the culture changes will you begin to see the benefits of a positive return.
But how long will it take?
Take The Long-Term View
As you can see from the diagram, it will take time before you start to see the benefits of this system. There will be a cost and effort investment into getting your safety practices running the way you want them.
However, when you get them to that place, your business will land smack bang in the middle of the pay off zone. You will be able to enjoy the long-term benefits of a proactive and safe workplace. And you can continue to improve it to get it running even smoother.
That is why it is important to take the long-term view. When you first begin the process, the incident level is high and you are constantly having to invest funds and effort – it is a struggle to see when there is going to be any sustainable benefit as there is little reduction in incidents.
While you are establishing your safety practices, the incident level is still high. The gap between your outgoing costs and the benefits you receive is still significant. But the effort is beginning to be shared as more of the workforce gets involved and becomes competent.
Suddenly, your business will hit a point where Health and Safety really begin to add value. The incident rates have markedly decreased, the cost and effort are levelling out and you are starting to see the benefits. As time goes on, you will continue to build on this level – your incidents will remain low, your cost and effort will remain constant, but the benefits will continue to increase.
You can go from a place of struggling to deal with incidents as they occur, to a place where you can plan how best to invest your safety dollars and effort for maximum benefit.
Getting to this place will see:
- Reduced costs
- Increased organisational flexibility
- Increased productivity and quality
- Increased profitability
- Improved reputation
If you would love for your business to get to this stage, then get in touch with Noel at Safety IQ to have a chat about your workplace safety.