Few things in life are free and worker safety is no exception. And while there most definitely is a return on safety, it has taken some effort to no longer primarily perceive it as a cost.
On the one hand there are outside forces. Lawmakers, regulatory organizations and industry standards are continuously imposing ever stricter rules and guidelines regarding occupational safety.
On the other hand companies themselves show a strengthening commitment towards a positive safety culture. Among other things, because that culture boosts worker morale and loyalty, provides access to a better workforce pool and projects a more respectable corporate image, etc.
A cost? Yes, but …
This makes for the still prevailing recognition of safety as a cost. And in a strict sense, it is one. Companies and organizations invest in safety material, safety coaching, fail-safes, safety protocols. (And then there’s the whole, luckily increasingly debunked safety-vs-productivity debate).
The key word in all this being ‘invest’. Since safety presents costs, but more importantly: it yields significantly higher, alas often underestimated returns. And it’s this return on safety that needs to be embraced.
Setting things straight
The understandable but ultimately distorted perception of safety as primarily being a cost, can make it unnecessarily hard to justify investments in safety, beyond those imposed by law- and rule makers.
While worker morale and corporate image are certainly welcomed, they are regularly (dis)regarded as intangible benefits. This generally results in the argument boiling down to: you pay amount X to prevent an accident that might have cost you the larger sum of Y”.
This puts those advocating (extra) investments in safety up for strenuous negotiations, all too frequently hampered by debatable and speculative arguments.
Luckily this no longer needs to be the case. Tools have been developed precisely to trim down on speculation and reveal substantiated figures for that number Y (cost of an accident). Figures that more than vindicate the X (cost of safety) and effectively display the return on safety.
The cost of not investing in safety
Supported by an exhaustive understanding of workplace safety, tools like Rombit’s Expected Monetary Value Evaluation, expose clear (and oftentimes sobering) insights by assigning a monetary value to risks before and after mitigation of those risks.
The cold hard numbers provided by these tools evidently differ from case to case, but what interests us in the scope of this article, is that they display a comprehensive list of obvious and less obvious costs of incidents/accidents:
- Direct costs related to incidents: damages and personal damages claims.
- Direct costs related to incidents: worker compensation claims (US).
- Direct costs related to incidents: executive and company liability claims.
- Indirect costs related to incidents: production, logistics, shutdown
- Indirect costs related to incidents: working days lost
- Indirect costs related to incidents: increase in yearly insurance premiums covering the domains above.
And while it might be next to impossible to put a number next to above mentioned benefits like corporate image and the access to a better workforce pool, other benefits of mitigating safety risks can most definitely be quantified.
- Improved material efficiency: energy and fuel savings.
- Improved material handling: maintenance savings.
- Improved material utilization: asset savings
- Insurance benefits: people, vehicle, assets
With these, by no means complete listings in mind, let’s circle back to the perception of safety as a cost. Yes, it will impact your bottom line, but it’s an impact that’s overwhelmingly preferable to the one it might suffer from the alternative.
So maybe it’s about time we transform that perception of safety as a cost into safety as a return.
