Archives for March 2019
Corporate America is all about return on investment. ROI is never far from the executive’s mind. So how do you sell the value of an injury that never happens and a claim that is never filed?
Certainly, you can visit the Department of Labor’s annual statistics and cite the cost of an average fall claim, lost limb, or fatality per industry sector. We can look at OSHA’s top 10 most cited violations and compare and contrast an organizations performance against that list. These statistics will take you only so far in gaining the financial backing for you safety management program. To be most effective, you should look at your organization’s overall corporate goals and tailor your pitch toward that message. How does safety support the achievement of those goals?
STEP 1: Change the Narrative
First and foremost, you must believe that safety is an investment that pays dividends in the end. You must overcome the notion that safety is an expense, or a non-productive line item on the budget. You must believe in the value of your safety initiative before you can sell the value to those who hold the purse strings. Safety pays. It’s up to you to prove it.
STEP 2: Find Your Supporters
Find others who believe in the importance of a safety culture. Work together to identify how the safety program supports corporate goals and benefits each department or division. Who is most impacted, and how? Be specific. If the mechanical division stands to reap the highest benefit, find ways to identify how, why, and where your safety program provides the greatest ROI for this team.
STEP 3: Gather Statistical Data
Review the loss history for your organization for the past five (5) years. Identify and trends or patterns.
• Does one department suffer more losses than others?
• Does one job classification within that department account for a majority of injuries?
• Does one work function have a higher occurrence of injury than others?
• What tools or equipment are used in this function or by these workers?
• What PPE are employees using and is it adequate?
• What materials are used in the production process?
• Do the tools, equipment, or materials contribute to the loss history?
• Could new tools, equipment, processes, or material suppliers increase productivity/revenue?
• Is there a training deficiency or worker knowledge deficit?
STEP 4: Know the Facts.
Compare and contrast your organization’s loss history against OSHA’s top 10 violations. Know what you’re doing well and where you need to improve. Report the facts: There were 5,147 work-related fatalities in 2017. Twenty percent (20%) of those fatalities happened in the construction industry. With the exception of auto accidents, falls are the number one work-related cause of fatality.
STEP 5: Assess Your Loss History
Once you’ve reviewed the loss history and identified the types of losses most commonly experienced by your organization, you need to calculate the cost of those injuries.
• What was the cost of these injuries over the 5-year period?
• What is the average cost for each type of injury (strain/sprain, fall, struck by, etc.)?
• What is the average cost in medical expenses?
• What is the average cost in lost time and production?
• What is the average cost in litigation?
• What is the increase in workers’ compensation insurance premiums over the 5-year period?
• Has your organization been cited and/or fined by OSHA over the 5-year period? If so, what are the total costs of OSHA violations?
STEP 6: Outline a Proposal and Projection
Once you’ve identified the cost of prior losses, you are better able to pitch the cost of your proactive safety management plan. Put a price tag on your plan and provide an itemization for the funds. Are you investing in software, purchasing safety equipment, or establishing an incentive program? Perhaps you are proposing all of the above (and more). Break down the cost of each component of the plan. What impact will the plan have on losses, and over what period of time? Quantify the savings and determine the ROI. How long will the plan take to repay its initial investment and ongoing funding? Not only do executives love numbers, they also want to see that you have done your homework. Be able to support your proposal with facts and figures.
STEP 7: Be Prepared to Compromise
Have a backup plan and be prepared to compromise. The most brilliant plans are sometimes met with resistance. Can you negotiate a phased rollout of the safety plan, over a period of time? How will that impact the proposal benchmarks? Create a basic framework ahead of time and be prepared to bargain.
FACT: Safety pays.
Injuries and fatalities cost organizations in time, money, morale, production, and reputation. Medical and litigation costs can easily exceed hundreds of thousands of dollars. Catastrophic losses can destroy a company’s reputation. Employee morale suffers when workers are injured, and fatalities take a horrendous toll on all.
And, in case you haven’t done the math, that’s 14 workers a day who didn’t make it home to their loved ones. These are husbands, wives, sons, daughters, brothers, sisters, friends, moms, and dads. It’s personal.
Does your company have formal safety policies in place? Are you responsible for workforce safety or risk management? Email us or give us a call at (816) 349-0850 to see how we can help design a safety and risk management plan that meets your unique needs.