Management / Strategy
Turning your Safety Culture into a Profit Center
By David Leng
Duncan Financial Group Vice President
Your employees are the engine that powers your company. If you have a well maintained, high performance team, it can endure challenges, go the distance, and help you stay ahead of the competition. A poor performing team can hold you back and cause you to lose profits.
Years of experience have shown that many companies suffering from production and profitability issues also suffer from a significant number of workplace injuries. And conversely, the most productive and profitable operations have fewer injuries. When injuries occur, your profit center is hit not only by the medical expenses and wages you pay (directly or through increased premiums), but also by the large number of items not covered by Workers’ Compensation. Workplace disruption, investigation time, production delays, damaged goods, upset customers, overtime/additional payroll for employees covering for the injured employee, and cost of hiring and/or training a replacement all damage your bottom line. So let’s turn your safety culture into a profit center.
Let’s give OSHA some credit. The watchdog giant has done a great job of reducing injuries and creating safer work environments. But just being OSHA compliant does not mean you are a safe company. The best solution to eliminating injuries is a behavior-based safety approach that builds a culture, one which encourages and molds employee behavior to identify potential hazards and prevent them from occurring.
Implementing a robust behavior-based safety program, however, is not a sprint. It’s more like a marathon in that it takes time. Here’s how to get started.
Mission Statement – Senior leadership, owners and executives must be involved. All through the organization it must be communicated that the priority is safety over productivity. Working safely does not mean working slowly. But doing something too quickly can certainly mean doing something unsafely.
Establish organizational responsibility and accountability levels up and down the chain of command, to ensure that key issues and situations are addressed. Create a checklist of safe and unsafe behaviors as guidelines for employees and supervisors. Internal accountability is essential. If a supervisor is not always present, peer review – an employee acting as the safety person or the day, or a longer tenured employee in a work group responsible for observing operations – can monitor an unsafe situation.
Benchmarking – If you do not record and measure, you cannot determine if you are improving. Items to record and benchmark might include OSHA recordables, DART rates (Days Away Restricted Duty), transitional duty, near misses and observed, and unsafe actions that did not result in an injury or property damage. Establish and monitor specific numeric goals for each. The success of your program can be determined by how injuries reduce over time.
Senior management must track and measure various components in order to hold supervisors accountable. Establish a line of communication for feedback, from bottom to top, so that if an employee feels an unsafe situation is being ignored by a supervisor, they can report it, without fear of repercussions. Nothing undoes a safety program quicker than a supervisor who is focused on productivity, with no regard for safety.
This can work for You
You may be unaware that years ago when aluminum giant Alcoa hired Paul O’Neill as CEO, he stunned his first stockholders meeting by saying that his top priority wasn’t the company’s bottom-line; it was tacking lost-time injuries of all employees. As you might imagine, his speech was not well-received.
Nonetheless, Alcoa set in place guidelines that required every plant manager to report every injury to O’Neill within 24 hours of its occurrence. Each Friday, a report of what injuries occurred and what corrective action was taken was sent to the home office, and then distributed company-wide. In a very short amount of time, the company became much more profitable and experienced an enviable record in paying dividends to its shareholders.
Alcoa’s safety program was already excellent, and perhaps even better than the industry average. But O’Neill believed it could be better. He understood that safety touches every employee in the organization, top to bottom. He made safety everyone’s responsibility, not just the loss control staff. As a result, injuries dramatically reduced and productivity soared. O’Neill proved that safety and productivity can work in harmony and that safer practices can lead to improved production and increased profit. Because in the end, the best and most productive way of doing something is the safest way.
This is a condensed article by David R. Leng, CPCU, CIC, CBWA, CRM, CWCA, vice president of the Duncan Financial Group, Irwin, PA, and author of “Stop Being Frustrated & Overcharged.” He is also an instructor for the Institute of WorkComp Professionals (IWCP) and can be contacted at firstname.lastname@example.org. Full article can be found at http://www.davidleng.com/press-room.html