Research & Innovation
The Top: Where OHS Begins
The average workplace lost time injury costs over $59,000....
September 1, 2005 By Pulp & Paper Canada
The average workplace lost time injury costs over $59,000.
The average lost time workers compensation claim cost is over $11,771, and other costs add up more quickly than most people realize. Property damage, lost production, manager and supervisor time due to an accident; the additional costs are extensive.
How many injuries did your company have in the last year?
In the last three years?
What did they cost your organization?
How many sales dollars are required to offset the cost of your accidents and injuries?
If your profit margin is 10%, it requires $590,000 in sales to produce $59,000 of profit.
Many different individuals and organizations share responsibility for occupational health and safety (OHS): legislators, company executives, OHS representatives and workers. Recent research indicates, however, that the success of a company OHS program depends first and foremost on the leadership of top management. This factor is even thought to be more important than all the others combined.
The personal commitment of senior management to OHS often loses impact as it filters down through the organization to the point where it may not be at all evident on the shop-floor. Employees imitate management’s attitudes or their perceptions of management’s attitudes; therefore, if management commitment to OHS is not evident to the employees, their behavior, actions, and in-actions will likely reflect this.
Management observed acting safely, participating in safety, and rewarding safety, sends the right message to employees.
Managers and CEOs who “get it”
For the most part, company executives are aware of the dramatic human consequences of workplace accidents and draw their motivation for preventing them from this awareness. Smart executives have another very pragmatic reason for doing so: workplace accidents are expensive, whereas prevention can help improve company productivity. Protecting the safety and health of your employees is an excellent business decision.
Managers and CEOS who “get it” make sure that safety is a core business value. And they put it on equal footing with productivity and quality.
OHS + Productivity + Quality = Success
To increase productivity, should a company lower production costs or try to reduce the number of work-related accidents? Most people would opt for the first choice without much thought, while many would wonder how the second one even relates to productivity. Some businesses are unaware that occupational health and safety should play a bigger role in their efforts to improve productivity and quality.
Managers of many of the world’s most productive companies now agree that a company must excel in all areas to be internationally competitive. OHS is one of those areas. A study by the Workplace Safety and Insurance Board (WSIB) has shown that businesses that have made an effort to prevent accidents have significantly lower injury rates than competitors who have not. Fewer injuries in a workplace have significant economic benefits for a business.
There is a “business case” calculation which can identify the “real” savings to an organization that can prevent workplace injuries. A business must achieve significantly more sales in order to offset the costs of injuries. If a business can potentially save $150,000 each year in injury cost reduction, and their profit margin is 8% then this is equivalent to achieving $1,875,000 in additional sales. Therefore, improving health and safety has a direct impact on business goals, profitability and productivity.
With respect to the employees themselves, the situation is clear: work-related accidents are a total loss.
Cindy Hunter is a PPHSA Program/Communications Specialist. (705) 474-7233 or www.pphsa.on.ca.
A manager who ‘GETS IT’…
“If we are establishing appropriate safety behaviors within the workforce, then we will be in a better position to influence all elements of the business, not just safety. People know right from wrong; someone who skips a step in a safety procedure is also likely to let a defect pass to a customer. The same behaviors influence quality, costs, customer satisfaction, and the many other drivers that provide the foundation for a successful business.”
“The ability for a business to not only sustain, but grow safety behaviors is dependent on plant leadership. Our integrity is tested daily and our success is largely dependent on the leaders within our organization and whether we’ve established safety as a core value — not just a flavour of the month. When it comes to safety, you can’t turn it off, put it on hold, or make it a priority… it needs to be in the forefront at all times.”
“Safety needs to be managed so the entire organization is engaged. It starts at the top, but the success comes when the leadership is pollinated throughout the organization. Everyone has a responsibility and role to play. We’re doing each employee and their family an injustice if we don’t live with this as a core value.”
Mike Rosso, Plant Manager
G-P Flakeboard Company
Sault Ste. Marie, ON
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