The Changing Face of S&H Consulting

April 1, 2000
The business of safety and health consulting is becoming more relationship-driven and less a force of regulations.

Dr. Bruce Dalton remembers the days when selecting a safety and health consultant typically was based on nothing more than credentials, the lowest bid or regulatory concerns.

More often than not, the consultant was brought in to help with a specific problem. Once the problem was gone, so was the consultant.

"A consultant used to be someone who came in, voiced an opinion and left," said Dalton, who oversees consulting services for U.S. HealthWorks' Preventive Services Division. "The consultant used to walk away and not know what was done with his report or recommendation."

Out of necessity, companies are helping redefine a consultant's role in their safety and health (S&H) programs. On an ever-increasing basis, many firms are reducing their S&H staffs and seeking outside help for many of the services previously provided by in-house professionals.

This growing trend has increased the need for long-term relationships. In some cases, it has led to outsourcing, where a company may need a consultant on site full time, said Alice C. Farrar, CIH, senior vice president and national director of occupational safety and health for Clayton Environmental Consultants, a national firm based in Georgia. "They're under tremendous pressure to do more with less," Farrar said of in-house S&H professionals.

Because many companies still see a need for technical expertise but no longer make it an internal function, they look to consultants to provide that service. For example, 15 of Clayton's more than 100 consultants are outsourced full time to clients.

Long-term relationships are part of a proactive approach many clients seek in ensuring a safe and healthy workplace. "Most clients now are looking for a solutions-based relationship," Dalton said. "Consultants have more skin in the game than we used to."

On the flip side, consultants strive for long-term relationships because of a decreasing need for regulatory-driven services. Building relationships also helps provide more steady income for consultants, whether they be single practitioners, small group practices or large national firms.

Long-term Relationships

Developing long-term, reputation-based work is the key to surviving as a consultant, said Fred Toca, Ph.D., CIH, CSP, president of Atlantic Environmental in Dover, N.J. The business strategy at Atlantic, a Northeast regional firm with seven full-time consultants and several associates, is two-fold: develop positive customer relationships on an ongoing basis and offer a holistic approach of fixing a problem and investigating other potential safety and health concerns.

The long-term relationship can be built through not only contractual fee-for-service work but retainers for specific services, Dalton said. For example, a client may have one consultant provide services and expertise for several facilities. "What companies want more than anything else is consistency," he said, adding this trend has prompted national consulting firms to open more offices to be closer to clients. "When you start becoming more than just a 'slam-bam, thank-you' consultant, you bring consistency to the entire corporation."

At small- and medium-size companies, Toca sees a demand for consultants who provide all of the client's S&H needs and may become that company's contact with the local Occupational Safety and Health Administration (OSHA) office. In those situations, he said, "We are their safety team."

Having consultants fill that role is not necessarily a good idea, claims Zack S. Mansdorf, Ph.D., CIH, CSP, QEP. While these types of long-term clients may be good for consultants, he said, companies need to ensure that the consultant is not used at the expense of their safety record.

"I think it's a serious mistake to eliminate in-house safety professionals," said Mansdorf, a consultant for Arthur D. Little, where he formerly was director of global safety and risk management. "At the very least, you need to have a knowledgeable, experienced individual in charge of the program internally."

Consultants who serve as the core of a facility's safety team, at least initially, will not have the same understanding of the safety culture, Mansdorf said. "When relying on consultants, you have no institutional knowledge, and it will catch up to you, even if it takes a few years," he said. "How would you know you need a service if there's no one there to evaluate it? The only way you would know is if someone got seriously hurt or workers' comp costs went up."

Economic Drivers

Widespread safety and health staff reductions in the last several years have led companies to increase their use of consultants. Demand for consulting services, though, can be tempered by the economy and its result on firms' bottom lines, Dalton said. "If the economy turns down and earnings decrease," he said, "consultants tend to be the first ones out the door unless they add a lot of value."

Nevertheless, many downsized companies are becoming interested in safety beyond compliance and realize that a safe and healthy workplace makes good business sense, several consultants said. To overcome staff reductions, clients fill the need for S&H expertise through value-added services from consultants, which can lead to long-term relationships.

Not all consultants paint as rosy a picture for their profession. The demand for safety and health consulting has little to do with how much the service is needed, claims 10-year sole practitioner J. Terrence Grisim, ARM, CSP, CDS, CPSM, president of Safety Management Consultants in Elmhurst, Ill. "It has to do with factors that force companies to have to buy it," he said.

One of those factors is workers' compensation insurance. Because workers' comp rates have been flat for 10 to 15 years, many employers do not see the need to augment their S&H programs with outside help, Grisim said. The same is true with regulatory concerns, which also have waned in recent years due to few new standards.

"If those external factors are not in the picture, the need for consulting services doesn't generate demand," he said. "If companies aren't forced into using safety consultants, they'd rather spend their money on something else. Nobody wants to purposely see workers injured, but it's all about money."

Consultants' abilities to grow their business also are affected by what they can charge for their services. Farrar, who has been with Clayton for 13 years, finds that holding on to experienced consultants and providing the same level of service without raising prices can be difficult. "Pricing is challenging for us. It's very difficult for us to raise our prices," she said. "To keep good people, we have to pay for performance and provide pay increases."

Established group practices and sole practitioners may be underpriced by startup consultants who perhaps were S&H professionals at a company, lost their job to downsizing and have hung up their consulting shingle only until they get another full-time job.

Companies may be able to hire safety and health consultants at a lower rate, but you get what you pay for, said David M. Gioiello, CIH, CSP, senior consultant for Industrial Health & Safety Consultants in Woodbridge, Conn. Companies who go for the underpriced bid usually "get burned" because they do not get adequate expertise or level of service, Gioiello contends.

Quality, though, usually wins out in the end. "What you have to sell is quality," he said, "and clients will recognize that."

Size-specific Challenges

Safety and health consultants face varying hurdles based on whether they are a sole practitioner, small group practice or large national firm:

Sole Practitioner. Because many consultants start out as a result of losing their jobs, the first few years can be the toughest as they try to become established. Many fail, often within the first year, because they are not prepared from a business standpoint, said five-year consultant Mark E. Briggs, CSP, ARM, vice president of Safety Management Resources in Chatham, Ill. Successful sole practitioners become consultants for the right reasons and count the costs before starting, Briggs added.

Even once established, building long-term relationships can be the most difficult for the consultant on his own. Clients seeking sole practitioners frequently want someone to come to their company and inexpensively fix a problem, sometimes referred to as "rent-a-safety director."

Safety Management Consultants' Grisim, who has been in the safety field for 32 years, mentioned three recent clients who called him because OSHA was knocking on their door. "They made promises to OSHA, but as soon as OSHA was off their back, that was the end of it," he said, adding small companies sometimes lack the "sophistication to see the big picture" of a proactive safety program. "They don't seem to perceive the ongoing benefit if it's not part of their corporate culture."

Small Group Practice. Smaller consulting firms can have substantial fixed overhead costs to factor into their business expenses. That may not be the case for sole practitioners, many of whom work out of their home. As a result, small group practices can feel the most squeezed by competition, said Susan Geier, CSP, president and principal of Corporate Safety & Health Consultants (CS&HC) in New York City.

While smaller firms cannot price their services as low as many sole practitioners, they also cannot provide the staffing level needed by larger clients, said Geier, whose company has five full-time consultants. To combat this competition squeeze, smaller consulting companies typically seek out more clients in the 100- to 300-employee range.

"We're at a fork in the road," Geier admits about her company. "We've always dreamed of being a large national firm, but we're rethinking that. Maybe we need to go for the smaller, more lucrative client that will use us long term, keep our staff small and be a niche company with certain specialties. That seems to be the way we're going."

As with many sole practitioners, small group practices often work with clients who are shortsighted in their approach to safety and health. "We tell our clients up-front that any safety program will be totally ineffective if they don't incorporate it into their business. They're wasting their time and money," Geier said. "They'll do that anyway, then turn around and blame the consultant that their accident rates haven't gone down."

Large National Firm. U.S. HealthWorks' Dalton contends that it's harder for national consulting firms to go after smaller clients because of the high cost of doing business. The larger firms need to become more efficient to better serve the small- to medium-size companies. "We don't service the small client as well as I'd like to," he said.

Revenues have stayed flat and will continue to do so, Clayton's Farrar predicts. This could especially affect large consulting firms, so holding onto clients and getting repeat business becomes increasingly important. "Just to maintain flat revenues," she said, "you have to continue to seek ways to replace types of business that might be declining."

Consulting Trends

What happens when the workers' comp market is flat, federal agencies are quiet on the regulatory front and competition keeps down prices? As with most types of industry, the key is to service a niche market or build a diversified client base.

Although all of the consultants interviewed provide general S&H services, many focus on their strengths as a way to grow their business. Briggs, for example, spends much of his time with training, whether it be on OSHA compliance or management issues.

Grisim builds much of his business around litigation consulting, serving as an expert witness in worker accident trials. His job, in this role, is to explain the issue before the jury to try to help them understand what happened and whether the defendant met a standard of care in trying to prevent the accident or was liable for the injury or death.

Some smaller group practices are building their business regionally or on local issues. Geier, for example, has picked up a lot of business because of a New York City ordinance that toughened safety standards following several injuries and deaths of construction workers from falling bricks and collapsing scaffolding or cranes.

Gioiello's Industrial Health & Safety Consultants is in flux because its typical client is changing from heavy manufacturing to light manufacturing and high tech. He calls it going from "heavy blue collar to light blue collar with no starch."

Employee health, such as indoor air quality and ergonomics, likely will play a prominent role in the next several years as U.S. business moves from manufacturing to service as the dominant type of workplace.

This total wellness trend will grow as it becomes increasingly difficult to separate the workplace from the home, Clayton's Farrar said. Such is the case with telecommuting or, as Farrar calls it, the "pajama clientele." For example, clients have had Clayton send ergonomists to workers' homes to evaluate home workstations.

Speeding up faster than anything in safety and health consulting may be time itself. A consultant's only product is information, and the quicker it can be delivered to a client the better, U.S. HealthWorks' Dalton said.

The information cycle has shortened so much that even the fax is not fast enough for clients who want immediate recommendations, Dalton said. "People want to converse by e-mail or use the Internet," he said, adding that consultants who do not have a Web site are missing out on an opportunity to offer services such as a subscription for basic information. "Consultants in the future will need to have access to very rapid information distribution channels."

In turn, Dalton said, the client will consider the consultant an increasingly valuable corporate asset.

Wherever safety and health consulting heads in the new millennium, CS&HC's Geier said, the field will continue to be exciting and full of changes every day. "You see things nobody else sees," she said. "You can be in the bottom of a sewer one day and on top of a bridge the next day."

Consulting Overseas

Safety and health consultants are in high demand in other parts of the world where safety standards vary.

Whether it be safety standards in the United Kingdom, which some call the best in the world, or a country like China, where employees may work barefooted on bamboo scaffolding, the demand for safety and health consultants internationally is influenced by many of the same factors.

The economy of a country or the profitability of a company can greatly affect a business's decision to seek safety and health (S&H) consultants, said Michael T. Noble, CSP, CIH, ARM, director of consulting services for Liberty International Risk Services, part of Liberty Mutual Group. "If the economy is in the toilet, our ability to effectively market services in that country is going to be slim to none," Noble said.

How U.S. consulting firms approach companies in other countries typically depends on whether the client is a local company or multinational organization. With local companies, it can be difficult to gain a foothold unless consultants understand the country's culture and speak the native language. U.S consultants need to understand that they cannot expect to succeed in another country if they try to do business on their own terms, said John Egbers, a senior consultant for DuPont Safety Resources. A native of the Netherlands who has lived in the United States since 1962, Egbers concentrates his work in Western Europe.

"In the United States, you can be very direct and straightforward," said Egbers, who also speaks Dutch, German and French. "In other countries, you never do that and have to interact in a much more diplomatic way, often in the form of a questioning mode."

For example, Egbers said, a consultant will not likely get a positive response from a client if he says, "You must do that." Instead, it might be better to say, "Wouldn't it be better to do that?"

Employers in other countries may not have a high opinion of Americans and might not readily accept them, Egbers said, adding no consultant can get anything done if he is not accepted.

"Americans often go into other cultures and demand our way. We have not always done that in a sensitive way," he said. "So there is a certain apprehension in many countries of what comes from the United States. Internationally, we have a reputation of being ruthless and only interested in money, not the individual."

Consultants should not emphasize that companies in other countries be brought up to U.S. safety standards, Egbers said. Instead, they should work with an overseas firm on taking its safety program at its current level and improving on it.

Workers' compensation or employers' liability, which can be a driving force for consulting demand in the United States, usually are not factors in many countries because neither is regulated nor enforced, Noble said.

More of a driving force, especially for U.S.-based multinational companies, is the corporate safety culture and the desire to have a consistent safety program worldwide. If a multinational firm has an S&H program in place in the United States, but choose not to in another country, it can lead to liability lawsuits, Noble said.

Perhaps the biggest obstacle for safety and health consultants overseas is in dealing with workers in fatalistic cultures. If an employee is injured or killed, co-workers will say, "The sand ran out in his hourglass" or "It was God's will." One way to overcome a fatalistic culture, Noble said, is to try to instill in management the cause and effect that safety plays in a company's bottom line.

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