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Justifying the Business Value of Safety

November 2012

In today’s tough economic climate, how do you justify the business value of occupational safety?

By breaking down the actual cost of a workplace injury, Health and Safety professionals are able to better demonstrate the ‘value’ of safety to the organisation in real terms.

Occupational injuries are costly not just in monetary value, but also in lost productivity and staff morale - so it stands to reason that the greatest opportunity to reduce inherent costs is to eliminate or prevent these injuries from occurring from the outset.
Despite a four year downward trend, HSE estimates show that the total cost associated with workplace injuries and ill health in the UK alone in 2010/11 to be £13.4 billion.

With this in mind, you would think justifying investment in the prevention of workplace injuries should be an easy task? The reality facing business leaders in today’s economic climate, with margins squeezed and spend being closely monitored, means the allocation of organisational funds requires increasing rationalisation.

A discussion panel evaluating ‘The Cost of Prevention v Hurting Employees in Light of Workforce Trends' at America’s Safest Companies Conference in October offered an insightful checklist when demonstrating that preventing injuries will save money. Panel member Bill Margaretta struck a chord when he said “We’re the only profession in the entire world that gets paid for something not happening.” So, how do you go about proving a negative?
In breaking down costs inherent to workplace injuries, 5 common cost elements (both direct and indirect) were outlined:

• Emergency response
• Reports and case management
• Interrupted operations
• Lost revenue
• Cost of damage

Steve Terry, Managing Director at Astutis said:
“We have noticed that more and more companies are planning wider health and safety training programmes across their businesses. This ensures that a more proactive approach to managing health and safety is being taken by all staff rather than Managers and Supervisors and it really does show in the bottom line."

With a detailed breakdown of the costs outlined above, in tandem with two further potential considerations:

• Insurance premiums and
• Compensation claims

The Health and Safety professional is able to start building a clearer picture of how investment in prevention can start to reveal itself in the organisation’s bottom line ­- in short, proving a negative can pay dividends in the long run!

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