Think again if you believe the expense of developing a comprehensive safety programme is prohibitively high.
A well-managed safety programme not only saves lives, but it may also save your firm money – both now and in the future.
Find a Solution That Is Right for Your Business.
When it comes to developing and maintaining safety standards, you don’t have to invest a lot of money.
Larger corporations may find it advantageous to employ an outside organisation to strengthen their safety programme. Especially if there are a large number of staff and departments to consider.
However, not every organisation needs to employ consultants to modify or create a new safety plan.
Whatever method you use, it is possible to create a balance that both suits your company’s budget and keeps your employees safe.
It all comes down to calculating the cost vs benefit for your team and fine-tuning it to meet your company’s objectives.
Cost vs. Value Analysis:
Getting your management team on board with the programme you believe is the most effective is critical.
It is vital to investigate the true cost versus value of the programmes you are considering. You can’t effectively explain or defend a plan until you understand how the cost of increased safety will be calculated.
The more you know at the start of the programme, the better you’ll be able to gauge effectiveness and value in the coming weeks, months, and years.
While the costs of a safety programme are not set in stone, some of them are very simple to calculate. For example, you are probably aware of the expense of personal protective equipment (PPE) used by your employees. However, certain costs are not obvious.
According to the International Risk Management Institute, Inc., expenditures should be divided into two categories: safety and non-safety.
“Keeping these two major cost components distinct enables companies to track how they evolve over time and demonstrates how expenditures in safety may really reduce the cost of non-safety.”
Safety costs are expenses incurred in order to improve workplace safety.
Non-safety expenditures include any expense resulting from a lack of workplace safety, such as accidents, incidents, or lawsuits.
The worth of your programme is assessed by how much non-safety costs decrease as a direct result of safety investments.
This represents your return on investment. Each company’s gauge will be slightly different.
Determine the Direct Costs
The direct costs of a safety programme will vary depending on the firm and industry, however they will include:
- Premiums for workers’ compensation
- Wages based on safety
- Development of a safety training programme
- Implementing training
- Identifying and researching hazards
- Personal Protective Equipment is expensive
- Noncompliance may result in sanctions
- Lawyer’s fees
Direct costs are easy to identify and document. They’ll also be useful when your safety programme evolves.
When the number of occupational injuries decreases, so will some of your direct expenditures.
A company with a greater rate of accidents and injuries may incur higher attorney bills and devote significantly more time to research and training to address the concerns.
Now Examine the Indirect Costs
Some indirect expenses will be the same regardless of your industry, while others will be more industry specific. As an example:
Low morale and productivity, especially after an accident or occurrence
Employee retention, new hiring, onboarding, and training are all lacking. Employee sick time is calculated depending on the amount of injuries/illnesses.
Another key indirect cost that might effect earnings is your company’s reputation.
Employees who are dissatisfied with their current position are more inclined to seek new employment.
As a result, the organisation becomes less competitive because the top employees will not want to work there.
Affordability of a Safety Program
Don’t believe anyone who thinks a safety programme is too expensive. Especially in smaller businesses.
A robust programme and decent, ethical practises don’t have to be expensive – we even detail the stages to developing a PPE Program.
Don’t Be Ill-advised
Some businesses continue to cut back on safety because it is deemed too costly. New PPE may not be in the budget, or there may be too much going on at work to halt production and squeeze in safety training.
But that’s a mistake.
An accident can have far higher costs, and a smaller company may have a much more difficult time recovering from the harm.
Even small businesses with an excellent safety record might face unanticipated costs that, ironically, arise from efforts to save money.
“They frequently lack the additional resources required to assist them in dealing with the consequences of an accident.” Furthermore, you do not have to have an accident to incur lack-of-safety costs.”
The true cost of safety can only be quantified after you understand how much non-safety items affect the bottom line. You’ll incur costs with almost any safety programme, even if it’s just the time spent on development and training. However, if that programme saves non-safety expenditures, you will likely benefit in a variety of ways, both direct and indirect, physical and intangible.
Spending a little money now to save a lot of money later makes sense for your organisation and the safety of your employees.
