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You Can't Put a Price on Safety, but Do It Anyway

Dec. 10, 2019
Investing in safety is the best financial decision a company can make.

A common lament among safety professionals—if I heard it once, I heard it a few dozen times over the course of EHS Today’s 2019 Safety Leadership Conference in Dallas—is that senior management constantly has to be convinced that investing in safety is a smart decision. 

It shouldn’t take much convincing for the top brass to agree that having a safe workplace is a good thing, but unfortunately, that’s not the case. Even somebody as highly placed in the management tiers as Jana Gessner, vice president of EHS with food, snack and beverage giant PepsiCo (a Fortune 50 company), knows the frustrations of selling safety to the C-suite.

As Gessner, one of the keynote speakers at SLC 2019, explained, part of her job requires putting a “brand” on safety to promote it internally. “You have to simplify the agenda to senior management,” Gessner told the packed audience of fellow safety professionals, “and that means tying the agenda into the costs of managing safety. We need to be able to show the link between what we’re doing and overall costs to the company.”

Part of that branding process at PepsiCo includes “Courage to Care,” an EHS initiative focused on the Zero Zone—achieving zero injuries in the workplace, zero collisions on the highways, and zero regulatory impact. “We have the courage to care and put the protection of our people over the needs of production,” Gessner said. “Our employees are empowered and encouraged to speak up for safety. “

It’s easy, she noted, for people to see the failures of a flawed safety program, but it’s not always easy to see the victories, which are often hidden since how do you see an injury that was prevented or an accident that didn’t happen? That’s why safety professionals need to be able to speak the language of senior management by pointing to the financial impact EHS programs have on a company.

Helpfully, AmTrust Financial Services, a provider of workers’ compensation insurance, has compiled a report that quantifies “the ROI of safety.” Some of the compelling statistics culled from various sources in the report include:

• Companies that have safety programs can reduce expenses related to injuries and illness by 40%.
• Every $1 spent on safety can save at least $3 on expenses related to worker injuries.
• New and inexperienced employees are more likely to be hurt; 40% of those injured have been on the job less than a year.
• Injuries at work cost businesses more than $161 billion per year.

Calculating total costs of work-related injuries goes well beyond medical expenses, workers’ compensation, property losses and legal fees. Just as serious to a company’s financial health are indirect costs such as loss of productivity, worker replacement, training, increased insurance premiums, OSHA fines and damage to the company’s reputation.

Jeff Corder, VP of AmTrust’s Loss Control Division, suggests that companies should look at the money put into a safety program “not as short-term expenses, but as long-term investments in the health of their employees and their business,” a point that Gessner also emphatically stressed.

Another SLC 2019 speaker, Steve Wiltshire, director of safety at Associated Builders and Contractors (ABC), buttressed Gessner’s observations by succinctly defining what a safety leader is: “A person who has the courage to demonstrate that he/she values safety by working and communicating with team members to identify and limit hazardous situations, even in the presence of other job pressures such as scheduling and costs.” 

“Our job is a lot bigger than just sending our employees home safe every night,” Gessner emphasized. “You can’t boil the needs of the EHS department down to just one main thing—safety is much bigger than that. As safety leaders, we have to be the change agents for our companies.”
 

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