Background
The current economy and the most recent recession have been the worst economic times since the great depression. With companies trying to find ways to survive, there are no sacred cows when it comes to cutting costs. Layoffs, outsourcing, and doing more with less are all strategies that businesses are employing to survive. While the need to cut costs is understandable it is, unfortunate, one of the strategies many companies are using is cutting back on their safety program.
No matter the business, I am seeing resources devoted to employee and customer safety programs suffer. Whether it is deferring/eliminating training, replacing worn personal protective equipment or getting by with defective machinery, safety seems to be another casualty of this economy. While this may sound like an effective measure, cutting safety will lead to increased costs and exposure to fines and penalties in the long run.
It may be easy for business owners to justify the cuts. Comments I constantly hear are “we can’t afford to do safety training, I am trying to keep the doors open” or “I can’t afford to provide new gloves to my employees, they will just have to make due with the old ones”. These strategies are not only short sighted; they will cost the company, on average, 4 to 10 times more in the longer term. In the end, companies must be focused on reducing their Total Cost of Risk (TCoR). The strategy of cutting safety will ultimately increase their TCoR dramatically and thus reduce their profits even further.
Accidents Don’t just Happen
One of the biggest misunderstandings is that accidents just happen. This is furthest from the truth. Accidents are caused by events that are not only preventable, they are predictable.
Businesses are not having new and improved injuries (or accidents); they are the same ones over and over again. In fact, near miss accidents or unsafe actions occur on average 400 times before someone is injured!
So if accidents are predictable, they are preventable. The old adage is that safety is written in peoples’ blood. I would prefer to say that safety is written in lost profits. While it is true that having a safety program is a cost to the business, not having one will cost the firm a great deal more.
Increased insurance costs, law suits, legal fees, lost productivity, etc are all costs that exist following an accident. Don’t forget employee morale and company reputation all suffer with a poor safety program. These are avoidable costs and will ultimately preserve capital for a company. Injuries/accidents are a waste of money! So if companies have a road map to save these costs (injuries/accidents), then why do they cut the road map to expose themselves to potentially additional costs? The answer is that they believe that accidents just happen and that their safety program is a cost that the firm can cut or reduce without much risk.
The informed business owners are going against this trend and realize now is the time to invest in their business. A strong safety program protects your most valuable assets; your customers and employees. When the economy begins to turn around, you will need a well trained employee and a loyal customer base. A strong safety program ensures that will happen.
So while it may make sense to cut back on safety during these tough times, safety needs to be one of the items that businesses keep in place as one of the staples that keeps your business profitable. Don’t let poor economic times put a wrench in your safety program and cost your business more in the long run.
