According to SMEs, budget constraints are the main reason for holding back on health and safety. But failing to invest in risk management can be a false economy.
Smaller businesses suffer a disproportionate number of occupational injuries and often stand to lose the most through penalties and prosecutions. So while an ongoing H&S programme undoubtedly keeps your people safe, it can also protect your bottom line.
But how do you quantify the cost of poor compliance practice? Get a practical guide to proving return on your safety spend.
Use the facts to gain exec support
A report by the European Agency for Safety and Health at Work (EU-OSHA) set out to examine the payback cycle of investment in safety. The result was noteworthy, in that 84% of the businesses studied had a payback within four years, and almost two-thirds of these (64%) saw that payback within two years.
While the EU-OSHA study was cross industry, it mainly aligned with the construction supply and manufacturing sectors. The key metrics used to quantify safety investment payback were demonstrating a reduction in absenteeism and accidents and an improvement in productivity.
This study offers a means to measure safety improvement that will help your board of directors evaluate the financial rationale for investing in safety initiatives. Until now, it has been common for directors to have ‘gut feeling’ that money will be saved but the decision to invest is often an insurance purchase.
Capture data to track trends
Start by ensuring you have a good understanding of the reactive parts of your health and safety system. For example, can you clearly and concisely get reports on accidents across your business in a timely and meaningful fashion?
All too often, incidents are scribbled in an accident book and hidden away, only rearing their head when a claim is made or if they sound serious enough to warrant the time of a director. Accident stats should be to hand and reviewed regularly. In this digital age, there is no reason why they cannot be collated in spreadsheets or – better still – on an online platform. Admittedly this is not the whole story, as it won’t tell you how many accidents are currently being prevented, but it will provide a useful benchmark moving forward.
Using this data, accidents can then be viewed as lost time and money with an appreciation of the current position of the business. Once incident statistics are to hand, you should look to improve the quality of your statistical data. Encouraging reporting of near misses is an effective way to identify areas for improvement.
Demonstrate the business benefits
With more and better data to hand, over time, you can demonstrate that the ongoing maintenance and improvement of safety standards across your business is adding value and plugging a hole in the bottom line.
Furthermore, a clear safety recording system can lead to a fairly immediate hard cost savings in the form of lower insurance premiums. By demonstrating your commitment to proactive improvement, using accurate and detailed safety data, the insurer can be confident that there are no skeletons lurking in the cupboard. Without this information, they are insuring an unknown quantity, and charging you more for the privilege.
Record, review and remedy
The most important action to take away is to ensure you are recording accidents correctly and that they are being properly reviewed and action taken to prevent repetition. This information can then be used to measure future return on safety improvements.
To find out how Southalls can help you see a return on safety investment within your business, get in touch.