Amount that Safety Effort Pays Off

Typically, companies view their SH&E and economic performance as separate lines of attack operations. In a cover story of Professional Safety: the Journal of the American Society of Safety Engineers, (Sept 2009) some interesting points were made.

Most often SH&E specialists have not incorporated economic analysis to show how investments in safety practices contribute to economic performance. Financial modeling tools need to be developed to consider the economic benefit of SH&E efforts that will help management make decisions.

A compliance-only focus should not be expected to yield fully positive financial returns. Alternatively, what economic analysis attempts is go beyond compliance to provide pertinent quantitative and qualitative economic information about how a company’s organizational activities (e.g., products, technologies, processes, services) and strategic SH& E investments will address issues that might offer real financial opportunities.

SH&E costing systems tend to suffer from imprecise cost collection, analysis and interpretation procedures and distorted cost reporting, have little transparency regarding what comprises their costs. They fail to consider the financial returns that can be expected later from the investment and thus, lose their decision relevance.

So, the real dilemma facing decision makers is how to make investment decisions to address SH&E issues in the absence of sound quantitative economic information. They propose economic analysis techniques described in the article including life cycle costs, net present value analysis, as well as determining hurdle rate, impact assessments, and more. This is a great area for quantitative data to improve upon.

Measure & decide in favor of safety and health…Save the company in turn!

adapted from
Anthony Veltri and Jim Ramsay (Sept 2009) Economic Analysis, Make the Business Case for SH&E, Professional Safety, pp 22-30 (http://www.asse.org/professionalsafety/docs/F1Veltri_0909.pdf).

The Need for Safety Administration at Your Firm

Creating a Safety Manager position or keeping safety managed by top staff – both are key administrative functions that build a solid foundation of self discipline for safety at your workplace.

From my experience, inclusion of safety functions in the corporate culture, and their continuation with some evaluations that look back, is a winning edge.  An edge held by any company today wanting to win business and stay profitable at this economic moment.

Save the tasks of Safety at work...Save your profit margin!

Assessing the Potential for Workers' Comp Losses

When assessing the potential for loss in any enterprise, one must evaluate all factors impacting the ergonomics, hazardous materials, processes, and machinery, in relation to how it could negatively impact the employee.

Pro-active steps must be taken to minimize the hazards which can injure both the employee and the company's bottom line. Mitigating risk to avoid unnecessary expense is an important component of corporate profitability which is all too often overlooked.

From my experience, a heightened emphasis on stronger safety programs with the appropriate controls in place to ensure their success, and with a commitment to meet or exceed statutory guidelines, provides a framework for overall loss prevention and the resultant increase in profitability. Equally important is the continual monitoring of such programs to guarantee that they are both effective and properly used.

Measuring risk levels and maintaining accurate, comprehensive records keeps safety programs relevant to your required level of risk control. For example, a restaurant would not have all the same inherent risks as a manufacturer of aerospace products that utilized exotic metals and chemicals in its processes.

Save the employee....Save the company!