23 Aug Can you improve safety and your bottom line at the same time?
Apart from the obvious moral benefit, why should you invest in a safety culture change programme? What do you get back on the bottom line? How can you persuade management of its benefits and put this in financial terms?
These questions might sound familiar, because it’s you and other prospective clients who frequently ask them. And they’re good questions too. Your business should examine every investment, especially when the inevitable justification comes, before or after that investment is made.
Balancing morality with monetary
They’re tough questions to answer though because talking about the cost of safety or non-safety (the cost of safety failure) is such an emotive issue. On the one hand, lack of investment in safety can be perceived as putting a low price on people’s lives. But on the other hand, where do you stop investing in the reduction in risk? As people often point out: the safest workplace is one that isn’t actually doing any work.
Add to that the complication of what you’re actually investing in: is it process, equipment, legislation, training, assessment or consultancy? Or is it all of those things and can you really put a nice safety ribbon around them all?
How to get started
An obvious place to begin is with the cost of failure or non-safety. But despite the clear benefit of understanding how much money you lose through accidents and incidents, I still find people are reluctant to try and understand that cost. It’s a complicated business that puts many safety professionals off, but we’ve got plenty of information to help you get started.
Costs vary from industry to industry but the trick is to remember that there are wider cost implications than just those of the immediate incident, like medical costs and compensation payments made to injured workers. These are costs that you can insure for but the HSE estimates that for every £1 of insured cost, there can be up to £36 of uninsured cost that a business has to cover (the average across industry was £10).
Once you’ve got a handle on the financial implications of failure in the workplace, you realise the positive impact you’ll have on the bottom line just by investing in better safety.
When and where to invest
It’s important to remember that this changes. All too often I see businesses trapped in a cycle of repetitive spending on the same old things because that’s what the business or the buyer is comfortable with. Getting stuck in an investment cycle is all too easily done.
Some important factors that determine where and when to invest in safety are:
- What does your injury rate look like? The Bradley curve helps us start to unpick the safety journey and, based on your figures, where you ought to be investing.
- Where have you invested in the past? Is this still delivering significant improvement, or has the improvement started to tail off now?
- Where haven’t you invested in the past? There’s a balance of elements needed for strong safety performance, where are you weak?
- What are people in your business talking about? Common frustrations and blockers for safety will come up time and time again if you ask the right questions.
- Which types of injuries/incidents are occurring? Useful information but be careful with this one, as so much of the information is defined by outcome, which is in turn determined by luck.
- Benchmark yourselves against others in the industry. How much have they invested to get the performance they currently demonstrate?
Focus on what you want to achieve
There are lots of assessment tools out on the market including our very own Safety Culture Assessment, or the British Safety Council’s five star audit (both of which you’d expect me to promote!) which will help you make decisions, but even with these assessment tools, you still need an idea of what you want to achieve before you start.
So take time to assess both what the business is really spending on safety, work out where that money might best be spent and consider external as well as internal factors. I strongly believe it’s possible to improve the bottom line and save lives at the same time.