Safety measures in the workplace are designed like scanners in the airport. They prevent, detect and address threats to an organization’s security and the welfare of its employees. Without these safety protocols in place, accidents could happen which can range from injuries that are treatable with basic first aid to life-threatening disasters that could permanently tarnish an organization’s brand and reputation.
Safety should be a top priority for any organization. Aside from saving lives, having an efficient and effective workplace safety system could also save your organization a significant amount of money. According to estimates by the Centers for Disease Control and Prevention, fatal injuries in the workplace can incur an average cost of $991,027. This figure only considers hospital costs so the actual amount could actually be much higher when factoring in other indirect costs.
One of the biggest factors that managers consider when implementing safety programs is the cost. There is no specific amount that can guarantee that an organization’s safety standards will be foolproof. The cost will vary on your company’s needs and objectives. Here are 4 tips that will help you determine how much should invest in workplace safety.
Evaluate the Real Cost Versus Value
Safety is an investment and one of the first steps you need to take is to separate the two main cost components involved in the investment: the real cost and the value. The cost is the expense involved while the value is the return you get from the investment. The value is critical because it will justify why you will need to shell out money for particular safety programs or equipment in the first place. Various studies have shown that companies experience returns between $2 and $6 for every dollar invested in injury prevention. To get the specific amount for your own organization, you will need to evaluate how much non-safety costs improve as a direct result of your safety costs or the direct expenditures made on safety.
Identify Your Direct Costs
Another important factor you need to consider when determining how much you should invest in company safety is the direct cost involved in the safety program. Direct costs are pretty straightforward so they are easier to identify. This type of expenditure will usually include components such as personal protective equipment costs, program development and implementation of safety trainings, research on workplace hazards, legal fees, compensation premiums and others. The costs for the different components will vary depending on the nature of the organization’s operations. For example, companies that experience more accidents may need to allot more resources on researching ways to prevent and decrease accidents. They may also need to spend more on legal fees.
Identify Your Indirect Costs
The second type of expenditure you will need to look into is indirect cost. Compared to direct costs, this type is not so easy to identify but it can be much more expensive and their impact can be felt longer by the organization. Indirect costs include decreased productivity, employee turnover, low employee engagement and others. According to the National Safety Council, every dollar spent in direct costs, indirect costs could be twice as much. In certain industries, the amount could be much higher. For example, in the construction industry, indirect costs resulting from accidents can be as much as 17 times higher than direct costs.
Determine What Types of Programs are Relevant
Once you have evaluated and listed down all the possible costs involved in your organization’s safety, it will be easier for you to determine what types of safety programs are relevant to your operations. For example, if your company works with heavy machinery then you might consider investing in procedures that will prevent any unexpected downtimes and possible injuries related to the use of the said equipment. These include investing in intensive training, requiring employees to undergo physical aptitude evaluations and pass a drug test and implementing regular maintenance work on the heavy machinery.
It’s never a good idea to compromise safety in the workplace. If the financial aspect of safety seems overwhelming, keep in mind that implementing and maintaining effective safety standards do not have to be expensive. When you take time to evaluate your organization’s needs and identify all the costs involved, you will be able to find the perfect balance between your budget and the right safety program that will keep everyone safe.
