Why Invest In Safety?

Bob Riley of Dixfield climbs out of the ice shack he made from a 1996 Freightliner tractor-trailer cab. Named Haulin' Bass, he hauled it onto Roxbury Pond in Roxbury on Jan. 1 and has been fishing out of it every weekend since.

On the ice: Bob Riley of Dixfield, ME climbs out of the ice shack he made from a 1996 Freightliner tractor-trailer cab.

The Cautious Approach

The cautious approach, proclaims the Wall Street Journal, has taken hold of executives of some of the largest U.S. companies.

Acknowledging a tough business environment based on recent trends, CEO’s are delaying capital investment and, in some cases, even laying off staff. And it is not only happening in the oil and gas sector where an oversupply and low prices have upset the oil boom. Even manufacturing and transportation have been affected.

The Safety Investment

One area we cannot afford to cut is workplace safety. (While the word safety is defined many ways, one definition is a work environment that is free of hazards).

Investment in Safety or SH&E (Safety, Health and Environment) is a core business strategy at top companies. Some would argue, sure, that’s because these companies have more resources.

But if a company has fewer worker’s comp claims, doesn’t that result in having more resources? Fewer or no lawsuits? Better insurance premiums?

The American Society of Safety Engineers (ASSE).released a white paper in 2002 on the Return on Investment (ROI) for Safety, Health, and Environment (SH&E) Management Programs. (A white paper is a type of report that is particular in terms of its intended purpose, audience, and organization.)

ASSE found that in the majority of cases — yes, there is a R.O.I. from safety as a core strategy.

The American Society of Safety Engineers (ASSE) knows from data and anecdotal information that investment in a SH&E program is a sound business strategy, for any organization regardless of size, and will lead to having a positive impact on the financial bottom line

As every business or business operation is different, like any investment, results may vary. While there is no rule of thumb saying a dollar invested in safety will get you three in six months, research shows top companies invest heavily in people, processes and technology, including risk management. And coincidentally, these same top companies have higher rates of profit. (Profit is the result of the efficient use of limited resources.)

I prefer the The $1-$10-$100 Rule:

A $1 not spent in Prevention will increase to $10 later spent in Correction or $100 in the cost of Failure.

Unnecessary Risk

From my interactions working with smaller fleets, I find they generally have a lot of experience, they know their  business inside-out, and are doing things the safe way— to a point.

The point where unnecessary risk begins is in a lack of formal safety systems.

Everyone has safety procedures and processes in place  — but they do not write them down.

Everyone tells me they have frequent safety meetings: quarterly, monthly, weekly and even daily — but the safety meetings are never documented.

Everyone has a policy on use of safety belts, electronic devices, passengers, personal use of the company vehicle, etc., — but the policies are never reduced to writing and/or a written acknowledgement is never made.

Ditto for maintenance records, driver files, drug and alcohol testing, handbooks, etc.

Your Risk Partner Has Dark Thoughts

One statement I frequently hear, and have heard for years is, Well, we’ve never had an accident.

That’s an interesting fact, in of itself. Your risk partner (a.k.a. “the insurance company”), however, makes a number of assumptions. If yours is an average company, then one assumption is that your company has an average chance of an insurance claim — based on totally random events. (It may not even be your fault . . .)

If your company lacks formalized safety systems and processes, any claim against it will be harder to defend. By your own actions or inaction, you have given up on your right to the most forceful legal defense.

What’s my point? The little things make a big difference. Remember the $1-$10-$100 Rule. A small investment in safety and safety systems can make a big difference later.

Do you want to invest $1 now or $100 tomorrow?

Thank you for reading this.

J Taratuta

John Taratuta is a Risk Engineer, and Safety Advocate. (989) 474-9599

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