A penny saved is a penny earned. Those who have paid for lawsuits for negligence related to environment, health or safety issues will know this very well. The cost of non-compliance is steep and the return on investment (ROI) from automating your Environment, Health & Safety (EHS) process is best measured on how much you save on litigations.
There are other ways of calculating the ROI, like the cost of compensating injured employees, the time they take to recuperate and return to work, the cost of training a replacement, the cost of impact on co-workers and, not the least, the cost of reputation. Such events also damage the reputation of the business, causing customers to shift to competitors and leading to a negative impact on both financials and brand.
Today, EHS is not just about complying with regulations. Greater awareness amongst employees and customers has led them to demand compensation for real and perceived injuries. As of late July 2020, about 69 employment and labor lawsuits have been filed by employees claiming that they were exposed or potentially exposed to the new coronavirus at their workplaces. They have held their employers responsible for neglecting to implement workplace safety measures to prevent the spread of the disease inside the company’s office. A safety system could have enabled the businesses to be more prepared with systems and processes that ensure social distancing and other preventative measures including regular inspections to adhere to sanitizing procedures, maintaining inventory of PPE, etc.
Additionally, a cloud-based EHS system offers not just regulatory compliance but also enables safety leaders to drive a data-driven safety culture across the entire organization. It is important for the enterprise to have a proactive approach to health, safety and environment-related risks.
Top Costs for EHS Issues
The annual Liberty Mutual Workplace Safety Index documents the cost to the company from dealing with various workplace safety incidents.
|Injury Cause||Cost (billions)||Percentage|
|Over-exertion involving outside sources||$13.11||23.65%|
|Falls on same level||$10.38||18.72%|
|Struck by object or equipment||$5.22||9.42%|
|Falls to lower level||$4.98||8.99%|
|Other exertions or bodily reactions||$3.69||6.65%|
|Roadway incidents involving motorized vehicle||$2.70||4.88%|
|Slip or trip without falling||$2.18||3.93%|
|Caught in or compressed by equipment or objects||$1.93||3.48%|
|Repetitive motions involving microtasks||$1.59||2.87%|
|Struck against object or equipment||$1.15||2.07%|
|Cost of the top 10 most disabling workplace injuries||$46.93||84.66%|
|Total cost of the most disabling workplace injuries||$55.43||100%|
The NHS in England has to pay £4.3bn in legal fees to settle outstanding claims of clinical negligence. It had paid £2.4bn ($3.1bn) in clinical negligence claims in 2018-19, which is about 2% of its entire budget. The proper implementation of an EHS system can help them identify the common causes and prevent it to lower the costs as well as improve the service quality.
According to a National Security Council report, the total cost of work injuries in 2018 was $170.8 billion, including wage and productivity losses of $52.4 billion, medical expenses of $35.0 billion, administrative expenses of $57.6 billion and employers’ uninsured costs of $12.8 billion. Fire losses of $8.2 billion and damage to motor vehicles in work-related injuries of $4.9 billion are also included in this. In addition, it factors in the value of time lost by workers, the time required to investigate injuries, write up injury reports, and so on.
The Environmental Protection Agency’s 2019 Annual Environmental Enforcement Results reveal that $471.8 million was levied as combined Federal administrative and judicial civil penalties and criminal fines. In 2019, 170 criminal cases were opened as against 128 in FY 2018. More than $4.4 billion was invested in actions and equipment to comply with the law and control pollution, an increase of over $400 million from FY 2018.
Yes, the absence of, or a poorly implemented and executed EHS runs into billions, costing companies not only money but also reputation and productivity.
An EHS system can help in addressing the causes and preventing their recurrence to enhance the safety of the employees. The key is to analyze root causes of these injuries and ensure proper preventive action is taken. Your company’s EHS process must automate both RCA (Root Cause Analysis) and CAPA (Corrective Actions, Preventive Actions). ComplianceQuest’s EHS has been used by numerous customers across manufacturing, oil & gas, life sciences and several industrial sectors.
TCO of EHS Solution
Manual EHS solutions cannot handle the complexities of the modern business world. Documentation, root cause analysis, prevention and correction can all become challenging in a manual system, which can prove to be just as costly as there being no EHS system at all.
On-prem solutions also have their limitations, making it rigid and difficult to scale. As businesses grow and regulations evolve, managing the changes can become complex. Upgradation and scalability will also become dependent on budgetary constraints. Leveraging technological innovations can also become difficult due to the additional infrastructure costs.
A cloud-based, scalable EHS solution such as the one from ComplianceQuest built on Salesforce.com is flexible and robust and helps you comply with EHS regulations specific to your industry. It is part of the larger quality management system, thereby allowing you to make quality and EHS an integral part of your business. It has all the functionalities needed to document, prevent and correct incidents and events, thereby keeping the environment, your employees and stakeholders safe. Being cloud based, you also save on infrastructure costs and are future proof. The solution being modular, you can implement only those that you require to make sure you are EHS-ready.
If you would like to improve the quality, environment, health and safety aspects of your business, contact us now. https://www.compliancequest.com/contact-us/