Business Case for Health &
Safety
Significant strides have been made over the last 100 years
or so to reduce the accidents rates. While these rates have
decreased, associated costs to the business continue to rise.
Most businesses consistently reducing their injury and illness
rates have done so by using solid management practices. Safe
operations have become their business objective, out of concern
for their employees, but also because a safe operation is
a significant factor in their continuing business profitability
and success.
Health and safety should be considered an investment for
a firm to achieve a safer operation that has sound business
benefits and the assurance that a safe operation is integral
to meeting other business goals. The business justification
includes:
Compliance
with the Law
Compliance with the Occupational Health & Safety Act and
other relevant legislation and regulations related to health
and safety of your employees is an important and legal requirement.
Not being aware of your legal responsibilities and duties
is not a defence for non-compliance.
Cost
Reduction
Workers’ compensation costs are significantly high and
there are substantial other costs that occur when an injury
or illness occurs in the workplace. The cost of these add
directly to a business’ operating costs, and subsequent
profits. In 2007, the average lost time injury/illness in
Ontario averaged $21,300.00*. When other company costs are
factored in, the average cost to an organization rises
to more than $85,200.00.* Examples of other costs
include:
- Equipment/tool damage and repair costs
- Property repair costs
- Production delays including employee time at time of accident
- Material loss
- Cost of complying with Ministry of Labour orders
- Management time spent on issues related to the incident,
injury or illness
- Claims filing and management of workers’ compensation
process
- Salary top-up and benefit costs while on compensation
- Loss of use of equipment while it is being repaired
- Loss of production if stop work order is issued
- Cost and time spent to comply with a WSIB Workwell audit
- Legal and trial costs if charges are laid
- Payment of fines
- Management of return to work and reduced productivity
while on modified work assignment
- Reduced productivity/organizational capability due to
loss of skilled employee
- Cost of obtaining a replacement employee and decrease
in productivity while on learning curve
*Source:
www.labour.gov.on.ca./english/hs/sawo/index.html
Business
Interruption Protection
Responsible business organizations assess their operations
and processes to understand the hazards and implement methods
to eliminate or control them. If an incident is serious (fire,
explosion, significant employee illness due to toxic exposure
or accident) it can put the operation out of business.
Employee
Relations Improvement
Demonstrating management concern and commitment to ensuring
a safe operation is a critical component in building better
employee relations, keeping the best employees, and increasing
the contributions of those employees to the achievement of
your business goals.
Reliability
and Productivity Improvement
Injuries that occur when the work area is disorganized, when
work flow is awkward, when maintenance is being performed
under pressure because of a breakdown, when employees are
unaware of potential hazards may be symptoms of other workplace
issues that are impacting cost, reliability, productivity
and quality. Superior performing companies use every incident
as an opportunity to make changes that improve reliability,
productivity, cost, and health and safety simultaneously.
Building
Public Trust
Corporate image is important regardless of company size. A
high concern for safe operation and the health and safety
of employees is a positive message that is carried into the
community not only by employees, but also by suppliers and
customers. This helps retain and attract higher caliber employees
and may improve the image of the quality of the products.
Building
Organizational Capability
Reliable, productive, cost effective organizations with employees
who are motivated, skilled and focused on business goals is
a sound foundation for the ability of business to respond
quickly to market or competitive changes, to grow and expand.
Relating
Health and Safety Activities to Improving Business Results
Sound health and safety management and activities reinforce
effective management processes. They:
- Help promote alignment and commitment of management and
employees with organizational objectives, goals and action
plans
- Support effective planning for new projects and changes
- Support the development of effective and safe operating
procedures
- Reinforce the importance of employee training to be able
to carry out their responsibilities effectively and safely
- Stimulate and help develop employee problem solving and
other skills
- Stimulate and support effective communication between
management and employees, effective processes for giving
and receiving performance feedback, and processes for holding
people accountable for carrying out their responsibilities,
and
- Stimulate and reward actions taken to improve the business
processes
As
a result:
- Costs are reduced. The operation is more reliable. The
risk of business interruption due to health and safety issues
is decreased. The risk of skilled employees not being available
is les. Equipment, material and product damage is reduced.
Costs and management time dealing with regulatory or legal
fallout from an incident/accident is eliminated.
- Safe and optimum operation is no longer a matter of luck
or chance. It is an achievable goal, based on good organization
and planned activities, backed up by a shared management
and employee commitment to the goal.
- Employees and management learn new skills that can be
re-applied to help improve other business concerns. For
example:
- Incident root cause analysis can be used to determine
the root cause of quality and reliability incidents
- Job and/or process hazard analysis can be used to identify
potential production, quality and reliability issues and
improve the process
- New employee training for safe operation and follow-up
can also be used to help shorten the start-up curve in
becoming productive, and
- Giving and receiving health and safety performance
feedback to improve one-to-one communication and feedback
skills at all levels of the organization – on any
issue
- All levels of employees are involved in health and safety
goal setting and planning processes which can be a step
to cooperation and involvement in other business planning.
*Source:
Business Results Through Health & Safety
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