5 Reasons Why Safety Culture Impacts Business KPIs
Health and safety management in the workplace is surrounded by challenges and, despite best efforts, accidents tend to happen leading to costs in various forms - medical expenses, insurance, compensation, penalties, etc. It also impacts worker productivity, adds replacement and training costs, and affects production schedules, making continuous improvement of workplace safety a business compulsion.
Almost always, the need for safety is viewed from two perspectives: compliance with safety regulations and the cost of being unsafe. While these are compelling requirements, improving safety management is not just important from these points of view. A safe workplace also positively impacts the key performance indicators. To reap the benefits of workplace safety, it is not just important to have a reactive approach to safety but be proactive and predictive, anticipating potential events and implementing controls and corrective actions to mitigate or minimize impact. This requires creating a culture of safety where employees participate and contribute to workplace safety proactively.
The Cost of Safety
Before understanding why organizations need a safety culture, let’s examine the cost of unsafe workplace practices.
The 2021 Workplace Safety Index from Liberty Mutual estimates that employers paid more than $1 billion per week as workers' compensation for disabling, nonfatal workplace injuries in 2018. In 2019, the total cost of work-related deaths and injuries was $171 billion, according to the National Safety Council.
In 2021, the total cost of work injuries was $167.0 billion and includes:
- Wage and productivity losses of $47.4 billion
- Medical expenses of $36.6 billion
- Administrative expenses of $57.5 billion
- Employers’ uninsured costs of $13.8 billion
What it does not reflect is the value of the time due to injuries that were not disabling, the cost of time needed to investigate injuries, write up injury reports, and so forth.
InjuryFacts data shows
- Cost per medically consulted injury in 2021 to be $42,000
- Cost per death $1,340,000
- Days lost due to work-related injuries - 103,000,000
In addition to absenteeism, the companies also incur costs of replacing the injured worker and training them. Besides, depending on the nature of the accidents, there may be damage to assets such as infrastructure and machinery. The repair work/replacing the damaged equipment can also add to the time delays.
The cost involved and the loss of workdays are compelling reasons for employers to improve workplace safety and health, reduce the number of events, and prevent damage to property, injury, and death. Equally important is the fact that a safe workplace also makes employees feel cherished and more engaged. While it reduces absenteeism, it also increases the workers’ willingness to contribute to workplace safety proactively by reporting unsafe behaviors, near misses, and potential hazards.
OSHA stresses the importance of improving workplace safety through worker engagement. This not only protects the workers from injuries and illnesses but also creates a significant impact on improving the company's productivity and profitability.
Safety Culture and Business Performance
The Institution of Occupational Safety and Health defines Safety Culture as: 'Safety culture is a combination of the attitudes, values, and perceptions that influence how something is done in the workplace, rather than how it should be done. Poor safety culture has contributed to many major incidents and personal injuries and can be just as influential on safety outcomes as an organization's safety management system itself.’
In an organization that has nurtured a culture of safety, safety is given the highest level of importance across all departments and functions. This has the impact of significantly reducing the number of incidents and near-misses. All employees understand the safety policy of the company and discharge their duties aligned to the standard operating procedures that ensure both quality of the product and process, as well as the safety of the worksite. This not only results in customer satisfaction but also enhances brand reputation.
Where the employees are engaged proactively in making the workplace safe, the risks of accidents come down. Continuous improvement is affected at every level as the employees are aware of and empowered with information and tools to address common causes of workplace accidents in advance. They recommend and implement mitigative measures that can prevent serious accidents from happening. In case of an emergency, they are also equipped with the necessary skills to make informed decisions that can help them overcome the crisis safely.
Such an organization benefits from not only lowered cost of safety but also from the following:
Benefit #1 Stable Business: Even in times of duress, the company can continue to run with minimum disruptions as the employees know what to do in case of emergencies. This helps with business continuity and disaster management.
Benefit #2 Enhanced Loyalty: In a safe environment, employees feel cherished and will be more loyal and engaged in workplace activities, taking ownership and contributing to the growth of the country.
Benefit #3 Enhanced Brand Reputation: In a highly aware society, customers care for the ethics and culture of the businesses they engage with. A company that cares for its employees and the environment automatically wins customer respect and loyalty, which impacts its business growth positively.
Benefit #3 Improved RoI: Where the number of accidents is less, the damage to assets is also minimal, improving the return on investments. Also, predictive maintenance lowers unplanned downtimes and improves the life of the machinery, further improving the RoI as well as on-time delivery.
Benefit #4 Talent Attraction: It is a proven fact that along with the payscales, the brand reputation and the culture of the organization matter a lot in attracting talent. Companies where the employees are treated well and their well-being cared for are natural magnets for talent.
Benefit #5 Accelerated Growth: Lower safety costs, enhanced brand reputation, improved RoI, and engaged employees will help to accelerate growth and increase revenues due to a positive brand image and lower hurdles to innovation.
ComplianceQuest EHS to Improve Safety Culture and Company’s KPIs
Altex, a provider of terminal services for moving heavy oil and bitumen by rail, has four
locations throughout Western Canada. Compliance is critical for operational efficiency but was being hindered by the use of a patchwork of paper-based and stand-alone systems. This made it difficult to ensure a closed loop between maintenance and quality processes.
Due to the inability to ensure 100% traceability of compliance initiatives, the company implemented the ComplianceQuest EHS Solution.
Standardizing everything into one centralized platform has enabled the teams to focus on their core, speed up incident closing by 30%, and increased the productivity of the safety team. The standardization has also meant that Altex can be more agile and flexible if there are staffing changes. The Altex staff and the company’s management have full visibility into the status of all incidents. Dashboards help the safety team help to identify, analyze, and correct hazards, and prevent future recurrence. Most importantly, the staff can now focus on higher-leverage projects. Live data helps them to have better insights into how the operations are doing and where they need to prioritize.
The ComplianceQuest Solution provides
- End-to-end integration of safety workflows to empower employees at all levels to report incidents, near misses, and observations.
- It helps them to track progress and collaborate with other teams to improve workplace safety.
- It also provides safety leaders and top management with data needed to capture trends, identify high-risk areas, and proactively implement corrective actions.
- The data trends along with historical data help future safety trends and implement mitigation strategies to improve workplace safety.
- It helps to identify skill gaps and deliver training to empower employees and improve the safety culture of the organization.
- It also provides easy access to safety policies and SOPs to ensure operations are aligned with the safety goals.
Looking to implement a next-gen safety management solution? With CQ’s SafetyQuest, you’ll be able to build an enterprise-wide safety culture with a modern EHS Solution with data at the core.
Request a demo here: https://www.compliancequest.com/lp/ehs/