By Jim Flannery, owner of Flannery Safety Consulting, past TMH Business Coaching client and editor
Is your business struggling to increase it’s profitability? There may be a solution that you haven’t considered: work on improving your company safety program.
Most people think of safety and productivity as being opposing forces—that if you focus on safety your productivity will suffer, and vice versa.
In fact, there is abundant evidence that health and safety programs are profitable in a number of ways—a large Return On Investment, decreased cost of projects, increased reputation, an increased ability for your company to bid on jobs, and many other benefits. Protecting your people protects your profits.
“OSHA’s [Occupational Health and Safety Administration, United States] Office of Regulatory Analysis has stated… our evidence suggests that companies that implement effective safety and health can expect reductions of 20% or greater in their injury and illness rates and a return of $4 to $6 for every $1 invested…”
Companies have begun to realize that having safety programs and safe records is a selling feature for their clients; some clients refuse to use sub-contractors who don’t have safety programs and safe working records. Why is that? From Dodge Data and Analytics:
- 51% report increases in project ROI; with a fifth of those reporting increases of greater than 5%
- 43% report faster project schedules, with half reporting schedule improvements of a week or more
- 39% report a decrease in project budget from a safety program, with a quarter reporting decreases of 5% or more. Only 15% reported that safety programs cost firms more—debunking the myth that safety has to negatively affect a firm’s bottom line.
- 82% report an improved reputation
- 71% report lower injury rates
- 66% report they have a greater ability to contract new work
- 66% report better project quality
Case Study: Alcoa Aluminum
When Paul O’Neill took over the CEO position at Alcoa Aluminum in 1987, the company was struggling. When he made his first speech as CEO, people were expecting him to talk about new fiscal strategies and projections for profitability. Instead he said, “I want to talk to you about worker safety.” As noted in this article from Business Insider, the company achieved record profits in its first year following that speech. When O’Neill retired 13 years later, net income was five times higher than when he arrived.
The bottom line is this:
- Assessing and controlling hazards can only be done effectively when a company plans its work.
- Companies with a good plan are more productive and make fewer mistakes.
- Better productivity and fewer mistakes boosts profitability.
- Likewise, healthy workers are more productive than injured workers and, again, this boosts profitability.
Building your business model to do things safely isn’t just the right thing to do for your staff; it’s also the profitable thing to do for your company.
Flannery Safety Consulting provides services in the Lethbridge area.
If you feel you need some help developing effective procedures to protect your staff, contact TMH Business Coaching today for a confidential, free, no-obligation consultation to propel you forward. Also, please feel free to add yourself to our weekly coaching tips email!