How Good Health and Safety Boosts Profitability

Health and Safety: A Distress Purchase?

  In the large companies I once worked for, my meagre team of health & safety specialists sometimes cast envious eyes over marketing colleagues with their seemingly huge budgets, plentiful staff, shiny cars and expense accounts. It was clear that health & safety appeared to them very much the poor relative - a “distress purchase” where funding went to the lowest bidder. Clearly, there can be an obvious correlation between marketing budgets and increased sales. The connection between health & safety and profitability is not so well understood, however. Executives are often seduced by a huge marketing campaign aspiring to improve one single thing (sales) a hundred-fold, without realising that the same result can be achieved by improving a hundred small things once. There are two ways to improve the bottom line: · By increasing profits externally · Reducing costs internally It was the Japanese drive for kaizen (continuous improvement) that taught companies to seek out, and eliminate waste. Clearly accidents at work are just another form of waste – or “non-value-added activity”.  

Right first time

  Just how much of an organisation’s energy is wasted on accidents or other unplanned events? Managers may sometimes just dismiss accidents as, say, half an hour’s downtime while the injured person and the first aider deal with the injury, however these costs are only the tip of an iceberg. In fact, Britain’s Health & Safety Executive famously published their “iceberg” model attempting to show the hidden costs of accidents: [caption id="attachment_14106" align="aligncenter" width="798"] Source: Health and Safety Executive: Topic One An Introduction to Health and Safety in Industry[/caption] EU-OSHA estimates that 3.9 % of global gross domestic product (GDP) is spent on dealing with work-related injuries and diseases, equivalent to a cost of approximately €2,680 billion.  

Your challenge

  In the UK, Norwich Union Risk Services estimates uninsured losses from accidents in smaller firms add up to £315 per employee per year. Multiply that figure by your staff headcount to arrive at…..well a figure that is not inevitable. You don’t have to haemorrhage such a large amount every year.  

By adopting a positive health & safety culture, you can encourage staff to identify, and take ownership of hazards before they erupt into an accident.

  Your people know their part of the work process better than anyone else, so are best placed to identify improvements. This kind of consultative approach offers further spin-offs as employees become used to the idea of putting forward ideas for improvement, they will also start to suggest ways of making the job quicker, more efficient, more customer-focussed, etc. By the way, the Kaizen philosophy is never-ending. Keep reiterating, as you will never exhaust the possibilities for eliminating inefficiencies, and the causes of accidents, within your workplace. Who needs a big marketing drive when there is already money leaking out of your business?  

Contact us

  Arinite clients appreciate we provide practical, no-nonsense advice about what you need to do to establish and maintain a safe and healthy working environment. Our team of health and safety consultants take pride in keeping health and safety simple. If you need to call upon our expert assistance, or just for an informal chat, please call our office 0207 947 9581, or enquire through our website. Jan Mirkowski