Investment in Health & Safety is critical to business success. Without it, both the financial and human costs could prove to be terminal.
As our Prime Minister insists that Health & Safety is an albatross around the neck of business that stifles growth, companies may be more likely to slash spending on Health & Safety. At last week’s IOSH Conference, the IOSH President Subash Ludhra offered an alternative perspective; “To those who tell us we can’t afford health and safety, as professionals we need to let them know they simply can’t afford to be without it”.
It is fairly obvious that major incidents, dating from Flixborough right up to the Deepwater Horizon oil spill in the Gulf of Mexico, are inevitably bad for business. Investing to stop these disasters happening in the first place is a wise move. But it isn’t just the big stuff that hits companies in the pocket; the HSE estimates that losses associated with slips, trips and falls cost employers £500 million every year. The cost to employers of people being away from work due to occupational illness and injury equates to £693 per employee per year.
If companies do cut safety budgets for a quick win on costs, it is likely that they’ll pay for it in the end. In general, poor attitudes towards Health & Safety cause high levels of even minor injuries which cost companies money. So, if investing (time as well as money) to reduce injuries means we can reduce an overhead of nearly £700 per person, surely having a strong Health & Safety Culture will kick-start growth not stifle it.
We actually KNOW that good safety means good business – and here are 10 reasons why:
1. Lower absenteeism – if people are fit and healthy they’re at work and making the contribution they’re paid for. Employers are getting some bang for their buck.
2. Lower wage bills – eliminate the doubled-up costs of sick pay for the absentees and overtime cover to fill the gaps and companies are saving a packet.
3. Reduced repairs & re-working – when things get done right first time, less injury, damage or out of spec product means less costs for repairs, re-working and waste disposal.
4. Happier workforce – it’s a deep rooted desire in us all to feel safe. If employees feel safe and secure at work, they’ll be happy.
5. Lower staff turnover – if they don’t think the grass is greener anywhere else, companies will be paying a lot less to replace workers who’ve left. And a lot less on recruitment and training too.
6. Reduced risk of fines – fines and all of the associated legal costs come directly off the bottom line. Limiting these costs protects companies’ profits.
7. Reduced insurance claims – injury and illness claims, property damage and business interruption all cost money. Investing money to reduce claims will save money in the long term.
8. Reduced insurance premiums – insurers are increasingly using measures such as the Corporate Health & Safety Performance Index (www.chaspi.info-exchange.com) to assess the risks of insuring businesses and set premiums accordingly. The better the Health & Safety performance, the lower the premium. And not an annoying price comparison advert in sight!
9. Improved productivity, quality & profitability – in their White Paper on “Well Being in the Workplace”, Messrs Harter, Schmidt and Keyes recognised that, “the presence of positive workplace perceptions and feelings are associated with higher business unit customer loyalty, higher profitability, higher productivity and lower rates of staff turnover”. Want some proof? Here is a strong business case close to our hearts.
10. More satisfied clients & stakeholders – if quality, efficiency, staff relations are all exemplary a business will have a reputation to reflect that. Without that reputation, business will probably suffer. After a major incident which had direct costs of £1 million, an explosives company estimated they went on to lose £6 million of revenue due to damages to their reputation and customer confidence.
Of course, there are many examples where the crippling costs of a serious incident literally put companies out of business. If you want to hear one particular story and the effects it had, check this out.
This list isn’t exhaustive. Nor is it particularly revelatory. But it is true. We’d love to hear about your business successes arising from Health & Safety investment. To contact us, click here.
Businesses need to make money. Cutting costs is one way for firms to increase their margins. However, Health & Safety shouldn’t be viewed as just a bolt-on that can be ignored to alleviate costs in the short term. Companies that have invested in developing a positive Health & Safety culture have experienced a return on their investment and reduced costs in a sustainable rather than knee-jerk manner. Good Health & Safety really does mean good business.
We all need to recognise the business benefits positive Health & Safety culture can bring. But for us, the moral reasons will always be the most important – a good culture means we strive to stop people getting hurt. If we don’t, the real costs are the loss of loved ones. And that is the strongest argument in favour of investing in your Health & Safety culture, as you can see here.