This is an excerpt from the article “Safety Training Does a Lot More than Prevent Injuries” originally published in Safety Decisions Magazine. It makes a case for viewing an organizational safety program as a business improvement tool in addition to an injury prevention system.
Any case for safety’s business value starts with the people who have their finger on the pulse of company profitability: financial executives. A study published in Accident Analysis and Prevention in 2011 reviewed how financial managers at medium and large companies view workplace safety. Researchers found that CFOs and other execs believe that “for every dollar spent improving workplace safety, more than four dollars would be returned.”
Most safety folks understand that spending on safety is a way of avoiding larger expenditures down the road (similar ratios of savings have also been reported by Safety & Health and the Vermont Department of Labor, among others), and it turns out that upper management often feels the same. If nothing else, this signals the C-suite’s willingness to discuss safety as a cost-saving measure.
The study also notes that financial managers think safety can enhance company performance in addition to reducing costs, and they “perceived the top benefits of an effective safety program to be predominantly financial in nature – increased productivity and reduced costs.” Safety doesn’t just stop companies from losing money—it improves their ability to make money.
Consider what happened when Paul O’Neill was hired as the CEO of the metal manufacturing giant Alcoa in 1987. For those of you who don’t know the story, the first thing O’Neill did at the helm of the Pittsburgh-based company was to make safety a priority. He obsessively sought out safety improvements and hounded upper management about the safety performance of their subordinates.The end result is that after 13 years Alcoa’s market capitalization increased by $27 billion.
No single factor is ever responsible for such a drastic improvement, but O’Neill readily attributes the company’s improved performance to changes in safety. (You can find more details of O’Neill’s amazing story in The Power of Habit by Charles Duhigg.)
If you think that O’Neill’s story is a unique case or that Alcoa’s enormous resources allowed it to take advantage where smaller companies couldn’t, consider Plymouth Tube’s 49-employee steel mill in Streator, Illinois. Kyle Roach, the mill’s operations manager, recently discussed how an increased focus on safety has provided a tangible financial benefit. He noted that productivity and yield both increased, and customer complaints decreased, as a byproduct of safety improvements. Like O’Neill, he discovered that safety is a gateway to overall culture change.
The business case for safety shouldn’t stop with the executive management. Behavioral safety training offers plant and quality managers an additional level of performance as well. Once you teach people how to pay attention to risk and adjust their actions to avoid the errors that can get them hurt, you can translate those skills and habits into the production environment with fewer performance errors. It can also provide essential motivation for workers.
Read the full article here.