Workplace Safety Before Profit - Simple, Right?
Workplace safety is an integral responsibility of any organisation. If we allow standards to slip, it firstly puts our workers in serious danger, and often the business at risk of significant financial and reputational damage. With all that at stake, there’s no way that anyone would intentionally put profit first, is there? The cold truth is that it happens without anyone realising. Maybe it’s not as black and white as “So… Shall we make money on this deal, or shall we let Bob lose a kneecap?” But the fact is, revenue-generating activities gain far more attention and top more agendas in corporate boardrooms, while health and safety can easily get put on the back burner.
This is where true safety leadership comes into play. We have a duty to everyone in the organisation, to gain workplace safety the attention and, indeed, the resources it deserves:
We need to shine a light on why safety is important in the workplace.
We need to help our senior executive team understand that workplace safety management is linked to improved performance and profitability.
We need to demonstrate that putting profit first, intentionally or not, is irresponsible and a failure of our 'duty of care'.
Most importantly, we need to drive better health and safety results through outcome-driven incentive programs.
Why Safety Gets Side-lined
In this day and age, most organisations realise that Workplace safety is important, however, it’s the lure of financial reward dominating the mindshare of company leaders. In the fast and furious race to the bottom line, safety can easily be side-lined.
The story has been played out again and again. Companies focus on revenues, craftily incentivising workers with profit aligned KPIs, compelling sales and operations to focus on the right areas to reap huge financial rewards. In this profit-driven climate, safety initiatives can easily drop off the radar, increasing the safety risk exposure of the business. The question should really be asked: If safety objectives had similarly well-architected incentive programs (not necessarily financial) in place to motivate the right behaviours, would safety programs still be fighting for attention?
Executive Perceptions of WHS Cost
The first challenge is that senior leadership, can be prone to overestimating the costs associated with implementing WHS programs, and then underestimating the costs of a safety incident - it is this perceptual bias that has to change. Safework reported that in 2012-13, work-related injury and disease cost the Australian economy $61.8 billion. The cost of ignorance is, indeed, high.
As safety leaders, it is our responsibility to change the perceptions of workplace health and safety and to drive improvements in safety culture from the top down. It needs to be considered a critical tool in building a scalable, productive and profitable business, and as such, deserves corporate-wide incentive schemes.
Measuring the Cost of Work-Related Illness and Injury
The cost-benefit ratio of improving health and safety is favourable. However, safety leadership involves proving that safety is a sound investment.
Work-related health and safety injuries result in high economic costs to employers. While many of the costs may appear intangible, many have measurable outputs:
Loss of skilled staff - whether due to death, injury, illness or early retirement, when we lose staff, we need to replace them. The cost can be measured in terms of recruitment and training efforts.
Absenteeism - the loss of working time due to absent staff can be directly correlated to the lost output in terms of wages.
Presenteeism - when employees come to work despite illness, they are much more likely to make mistakes and risk the safety of others. Measurable costs include the decrease in production and damage to equipment and materials.
Worker disease and injury - when our workers have a work-related injury or illness, we are required to support them. The costs we incur include healthcare costs and medical fees but also indemnity and effects on insurance premiums.
Lack of safe work practices - injury or illness caused by not employing the necessary Australian workplace safety standards can result in prosecution and court-imposed fines.
However, not everything is so easily measurable. One of the most significant impacts of poor workplace safety is the image it portrays. Our commitment to health and safety impacts our brand equity, consumer sentiment and reputation, as well as the well-being of workers.
The Real Bottom Line
While it's important for us to create a business case around WHS programs that meet regulatory compliance obligations, we need to go further than that. We need to elevate safety initiatives in the eyes of senior executives so that they stack up as an investment, similar to other corporate priorities. By doing this, it makes it easier to gain the backing to implement creative, well-planned incentive programs to drive those WHS objectives right through the organisation.
Through ignorance, organisations aren't just putting profit before safety, they're putting profit before worker wellbeing - that's the real bottom line.
For more information, contact us at +61 2 8883 1501, enquiries@conserve.com.au or subscribe to our newsletter for regular updates.