The figures are truly astonishing: According to the Department of Labor’s Bureau of Labor Statistics, approximately 3 million people in the private sector suffered an employer-reported illness or injury in 2016, with more than half requiring days off work, job transfers, or restrictions on ability to work. Animal production, nursing and residential care facilities, couriers and messengers, wood product manufacture, and air transportation are the most injury-prone sectors, according to the bureau.
Employees are one of an organization’s most valuable assets, and company leadership must assure employee safety and well-being in order to comply with OSHA rules, maintain productivity, and reduce high workers’ compensation expenses.
Furthermore, when profit margins aren’t fulfilled, laying off workers or closing plants that produce below-average output may appear to be a sensible way to save money; however, these companies should examine their safety standards and invest in human capital instead.
Deferred Risk’s Unknown Costs
Many businesses today have accepted that workplace accidents are the norm, resulting in thousands of dollars spent on employee compensation. According to the National Safety Council (NSC), U.S. businesses can spend more than $1 billion per week on direct workers’ compensation expenditures (medical plus indemnity), eroding gross profits significantly.
In the long run, a company’s failure to invest in the appropriate safety resources can be costly. A construction company was recently fined $135,000 for head, spinal, and chest injuries sustained by an employee after falling down steps at a building site last year. The stairwell lacked an intermediate rail and protective meshing, which meant it didn’t fulfill industry safety regulations.
OSHA continues to step up its enforcement efforts against businesses that disregard safety. It conducts over 41,000 inspections each year and issued over 35,000 violations in 2016. Fall protection was named the most-cited violation for the sixth year in a row by OSHA, with hazard communication and scaffolding rounding out the top three most-cited categories, which remained unchanged from 2015. Organizations may drastically cut costs while minimizing risks and safeguarding brand reputation by establishing a robust safety environment.
Creating a Culture of Safety
A great workplace safety culture guarantees that organizational safety is managed efficiently and effectively, and that employee and management values are reflected, and it starts at the top. To fully embrace safety as an important aspect of the workplace, company leaders must promote and maintain a safe atmosphere, establishing the tone that organizational safety is a top priority.
The following are some suggestions for establishing a good safety culture:
- Having a distinct vision: Recognize that the organization’s safety should be of the utmost concern, and focus the overall strategy on taking the required actions to ensure that it is.
- Bringing in the proper people: It’s critical to not only form a task force when establishing a safety culture, but also to engage with supervisors and employees on the ground. They can provide useful information about pain areas that should be addressed and incorporated into a safety program.
- Making the change known: Rally all employees behind the safety program and equip them with the tools and resources they’ll need to make safety a daily priority.
Creating a safety-oriented culture can result in significant cost savings for businesses. According to the American Society of Safety Engineers, a Massachusetts corporation witnessed a $8 return on investment in its environmental, health, and safety program for every $1 invested. Each injury saved is predicted to save a firm $37,000, and avoiding a fatality saves a company about $1.4 million. This is a huge cost-cutting opportunity for any company, especially one with hundreds of staff.
The Value of Safety as an Investment
Across numerous industries, such as manufacturing, logistics management, and health care, there is an old way of thinking that safety is merely a line item, not an investment in the organization. When it comes to the financial benefits of a safety culture, however, preventing injuries is simply one piece of the savings jigsaw. Companies might also save money by investing in safety in the long run. According to the NSC, more than 60% of CFOs said that every dollar spent on injury prevention yielded a return of $2 or more. According to the report, 40 percent of CEOs perceive higher productivity as the most valuable benefit of increasing workplace safety. Fewer injuries mean cheaper costs as well as fewer distractions for employees on the job.
In addition, indirect costs from injuries, such as workers’ compensation, legal fees, and the eventual need to find another employee, can be 20 times higher than direct expenditures, according to the ASSE. The following are some of the indirect expenses of workplace injuries:
- Training new and old workers
- Employee morale is low
- Buying a replacement or repairing existing equipment
- Public relations and brand reputation are in bad shape
- The requirement to make up for lost production
- Filing of Form 300 and accompanying papers need clerical assistance
According to the 2014 Training Industry Report, on-the-job training can cost as much as $1,200 per person, while employee turnover costs a company $5,000 each turnover. Investors are increasingly adopting workplace safety and health indicators to screen out underperforming equities, so publicly traded companies have an extra incentive to overhaul their safety processes. When this method of determining which companies to buy is used, investors often get a larger return.
It is critical for top management to recognize the importance of safety practices in an organization. Companies can get a big return by considering this “expense” as an investment in human capital.
The Role of Software in Safety Success
Developing an effective EHS plan might be difficult, but it doesn’t have to be with the proper solution and partner. In fact, not having a solid solution for employee safety may be the single factor preventing a firm from improving its bottom line. When Alcoa’s former CEO, Paul O’Neill, decided to focus on being a zero-harm corporation, revenues increased by 15% every year on average.
It’s critical to speak with key stakeholders in the business before adopting a solution to identify the true pain points and what components of an EHS software solution are required. Supervisors and/or safety managers will need different forms, KPIs and dashboards depending on the organization’s sector and sorts of on-the-job responsibilities. A robust EHS platform can also help the company’s digital transformation efforts by reorganizing once-manual safety procedures. Key safety information may be simply inputted and communicated to the appropriate department leaders in the event of an occurrence.
Furthermore, a cloud-based system ensures that incident data is immediately accessible and that any faults are quickly resolved, preventing further employee mishaps or injuries.
EHS software is essential for sustaining a safety culture and ensuring compliance. Manufacturers in 13 states with obligatory injury and illness programs, or health and safety committee requirements, were found to be beneficial in reducing injury and sickness rates, according to NSC. One of the numerous advantages of EHS software is that it may assist businesses in staying organized and up to date with ever-changing requirements. Software solutions, for example, help streamline, standardize, and track operations that are critical to ISO 9001 compliance. The organization is held accountable and is always audit-ready thanks to reporting and alert tools.
While improving your company’s workplace safety culture can help you make more money, doing so without the support of EHS software can cause more confusion than unity among your staff. For employees to be invested in a zero-incident culture, they must hear and see how important it is from management. Employees will be more productive with greater morale, consumers will benefit from faster response times, and the firm will strengthen its competitive position while limiting risks by focusing resources on human capital.
When it comes to software solutions, choose a platform that meets all of your organization’s demands and a technology partner who can help you go beyond guaranteeing regulatory compliance by providing you with decision-ready intelligence to improve performance and reduce risk. Any firm can achieve a broad and growing influence on its bottom line by building a sustained, proactive safety culture.
Are you curious about how CloudApper Safety’s EHS software might assist your company align its EHS program with industry standards and take a proactive approach? Request a demo right now.
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