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Best Practices for Building a Health and Safety Business Case

Posted by EHS Insight Resources on September 25, 2019 at 12:01 PM

Occupational health and safety isn’t just a legal obligation imposed on your industry. It’s a moral obligation to your workers.

If you want to invest in good EHS management practices, you need to be able to engage your team. For that, you’ll need to build a health and safety business case. Here’s why you need it and how to prove it to your superiors.

Why You Need Occupational Health and Safety

First things first: let’s talk about why you need occupational health and safety.

It should be obvious, but when it comes to your workers’ safety, “good enough” isn’t going to cut it.

Every workplace has its own set of risks. Certain industries, like construction, mining, and oil and gas are riskier than others. And the fact is, those risks are incredibly expensive for your business. The Occupational Safety and Health Administration (OSHA) estimates that employers pay almost $1 billion per week for direct workers’ compensation costs alone.

Then, there are the indirect costs.

Take low morale, for example. If workers know that their work environment is risky and that their employers aren’t doing much to stop it, they won’t feel all that invested in their work. You can’t afford their disengagement.

The Gallup Organization estimates that there are 22 million disengaged workers in the US workforce, costing the economy as much as $350 billion per year in lost productivity costs, including absenteeism, illness, and reduced productivity when they actually show up at work.

The Health and Safety Business Case

The fact is, you owe your company a strong health and safety program.

It isn’t just about your bottom line, though your bottom line is certainly a consideration. It’s about your moral and legal obligation to provide your workers with a safe working environment.

Under the OSH law, regulated by OSHA, employers are legally obligated to provide a workplace free from serious hazards, with the workplace safety policies, training, and tools necessary to comply with safety laws.

If you need to implement a safety management system, it’s time to build your business case for investing in health and safety.

Costs

Let’s start with the costs.

We said earlier that direct workers’ compensation costs eat $1 billion a week from US employers. But the costs of a weak health and safety program run deeper than just workers compensation.

In 2017, the total cost of work injuries in the United States was $161.5 billion. That number includes:

  • Wage and productivity losses ($50.7 billion)
  • Medical expenses ($34.3 billion)
  • Administrative costs ($52 billion)
  • Uninsured employer expenses ($12.4 billion)
  • Fire losses ($7.3 billion)
  • Vehicle damage ($4.9 billion)

Now, your business isn’t paying those billions directly – it’s spread out over the whole economy. You are paying for the cost of individual worker injuries. In 2017, the average cost per medically consulted injury was $39,000. The average cost of a single worker death? About $1,150,000.

Benefits

Of course, your business case isn’t just about avoiding costs. It’s also about taking advantage of the benefits of health and safety programs. For example, one study found that small businesses gained a recruiting edge if they invested in workplace health and safety.

Health and safety investments also have a measurable ROI. It bolsters your operational efficiency, improves your public image, and improves employee satisfaction.

Best Practices for Safety Performance Improvement

Even award-winning companies known for solid environmental, health and safety (EHS) programs aren’t resting on their laurels. To become the best, you must first realize there’s always a way to improve.

When you’re reviewing your safety metrics and KPIs, consider these best practices for EHS program performance improvement.

#1 – Combine Insights from Every Area

Your EHS program likely consists of several moving parts: employee training, audits and inspections, workplace observations, compliance, permits—the list goes on. If you’re using different tools to monitor and manage each one, you’re able to quickly retrieve data about individual components.

But the sum of these pieces is greater than the parts. When you start connecting dots between your EHS components, you’re better able to discover how actions relate to other actions. This can give you deeper insight into what’s happening in your department, and better position you to make the right improvements.

#2 – View Your EHS Program from Different Perspectives

Try as you might, you just can’t be everywhere at once. What your workers in the plant see on a daily basis can greatly vary from what the field workers experience. Safety leadership teams and contractors won’t encounter the same occurrences.

If you want to know how you can make impactful improvements, go straight to the sources. Ask workers in a variety of positions for their feedback on what’s working and what’s not, and what would make them feel safer on the job.

#3 – Review Your KPIs

Every EHS department has their own set of KPIs: lost time due to injury, TRIR, safety training performance, compliance and others. Are you measuring the right ones, though?

If you’re focused solely on lagging indicators, such as lost time because of injury, you could be discouraging employees to report incidents. Or, they may force themselves to come to work when they should have stayed home.

Instead, consider revamping your KPIs to give a more realistic view of your EHS performance. Leading indicators like near misses, safety audits, and team safety meetings are equally important to your EHS program and can offer more realistic insight into your program’s performance.

No matter how fine-tuned you believe your EHS program to be, understand there are always ways you can make it better.

How to Create a Business Case for EHS Software Your Superiors Will Care About

If you’ve identified the need for EHS software, performed your research, and decided on a solution, then you need to show your stakeholders that your software selection warrants the monetary investment. And for many EHS departments, convincing your superiors to sign the check isn’t always simple.

If you’re ready to procure the funds and approval for your EHS software purchase, you’ll have better luck if you approach your request as a business case. That is, instead of focusing on software features, emphasize what the software will do for the company.

Here’s how you can create a business case for EHS software your superiors will care about.

First, demonstrate an understanding of your current technology situation.

The biggest need for change in technology stems from recognizing your current technology no longer meets your needs. Introducing new software to a department is not a decision to take lightly, as it often requires a large time and money investment. The first question your superiors may ask is what’s wrong with what you’re already using, and you should be prepared to show them any insufficiencies.

Establish your ideal situation.

After you identify problems with how your current operation functions, follow up with what the ideal situation looks like. Talk about what it would be like for the company if you could solve each issue you discussed. For example, if you mentioned how a specific area isn’t getting enough attention due to time constraints, you could present your ideal balance of time for each piece of your department.

Present your solution, along with data to justify your selection.

Your stakeholders are much more likely to respond to a well-researched suggestion. Talk about what triggered your suggestion and back-up your choice with data, such as the number of man hours a mobile app will save on safety audits and inspections or incident reporting. 

You should also be prepared to talk about the implementation process, learning curves, cost, potential savings, and other requirements.

Presenting a business case still might earn a no, but you’ll never get a yes without focusing on what’s in it for the company.

Visit the EHS Insight Blog for more workplace health and safety best practices.

Topics: EHS Software, Performance Improvement, Workplace Health and Safety, EHS Management, Safety Software, Safety Management, Safety Culture

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