The most important asset for a company isn't its intellectual property or product, but the employee who either puts it together or sells to the customer.
Far too often companies turn to slashing budgets, laying off workers or closing down plants altogether as a means of saving a few dollars here and there. If your organization wants to rise above its competitors and keep a steady bottom line, it's time to place more investment in human capital.
Put safety on a pedestal
It's easy to cut back on the resources required for workplace safety and chalk up incidents to human nature. Everybody has accidents, right? But the truth is, some companies are missing opportunities to improve their bottom lines.
Serious injuries on a worksite necessitate a workers' compensation claim, which cost US companies over $1 billion per week. That number includes only the most debilitating injuries, which leaves out slips and falls and other minor occurrences. Furthermore, these expenses take away from the gross profits a corporation makes.
Businesses that haven't put too much stock into how they handle workplace safety may be surprised that a Massachusetts company saw a return of investment of $8 for every $1 it invested in its environmental, health and safety program, according to the American Society of Safety Engineers. In fact, each injury prevented is estimated to save a company $37,000, and a fatality avoided puts nearly $1.4 million back in the financial coffers.
Improved workplace safety can reel in big savings.
You have to spend money to make it
If the exponential savings that can be found from an effective EHS strategy sound too good to be true, that's likely because you're thinking too linearly. Preventing injuries is just the beginning—think of it like selling a product. Sure, you gain a profit, but you also get brand exposure, marketing fodder and you're able to hire new employees because of that sale.
The NSC reported that 40 percent of CEOs see increased productivity as the No. 1 asset gained from improving workplace safety. This is simple math—less injuries means not only lower costs, but also fewer distractions.
Furthermore, according to the ASSE, the indirect costs can be 20 times higher than the direct expenses, which are workers' compensation, legal fees and the inevitable need to hire another employee. Indirect costs include:
- Training new and old workers
- Fixing old equipment or buying a replacement
- Bad public relations for high on-the-job injury rates
- Recouping lost productivity
- Clerical administration needed for filing form 300 and other paperwork
- Reduced employee morale
The last bullet on that list is perhaps one of the most important. If workers get to the warehouse or plant knowing there's a chance someone could get injured they'll not only resent management for not creating a safer work environment, but they'll second-guess themselves to avoid an accident—an action that could result in another incident.
Publicly traded companies do have a little extra incentive to revamp their safety protocols, as the ASSE reported. Investors are increasingly evaluating corporate governance—the importance management places on its workers—as a means of identifying which stocks to buy into. So, not only could improving your organization's EHS help revenue flow, but it could raise the stock price, which is an extra bonus for any corporate shareholder.
Don't waste any more time
Overhauling your EHS strategy can be daunting, but it can also be the thing holding your company back from improved revenue and a bottom line that's consistently in the black. Taking the time to keep your employees safe now will yield dividends down the line.
"EHS software plays a crucial role in a safety culture revamp."
A safety program without EHS software supporting it will ultimately fall short of its optimal potential, making it an imperative investment for any business. By systematizing safety management, organizations are able to digitally record and analyze injuries and near-misses—a crucial factor in improving workplace safety. Rather than using paper documents and spreadsheets, safety managers can track and trend data to identify incident root causes, and ultimately predict and prevent future occurrences.
Assembling a safety committee made up of shift leaders and managers is the next step, according to Workers' Comp Insights. This facilitates open communication between those on the ground, and the people designing the safety program. Meet up each week to discuss faulty equipment, hazardous conditions and even what training is needed.
One of the most important steps in creating a safer workplace is keeping up with changing regulations. This is where EHS software is wildly effective—a top-of-the-line platform will alert the organization of any upcoming revisions to industry best practices and share training materials that can be used to educate workers.
While revamping your company's workplace safety culture can certainly boost cash flow in a positive way, doing so without the help of EHS software can create more confusion than cohesion. Be sure to get a platform that fits your organization's needs and workflow, and it'll ultimately be an asset moving forward.