What is the cost of safety to a business?

“The purpose is clear. It is safety with solvency. The country is entitled to both”

Dwight D Eisenhower, US President

Industrial safety, Occupational Health and Safety (OHS) and now Work Health and Safety (WHS) is becoming increasingly more prominent in the media and especially in state of Victoria where the government safety agency WorkSafe runs high profile media campaigns that tug at your emotions.

Many business owners see safety as an overhead cost that should be avoided where possible.

Is this good business practice?

Can poor safety be detrimental financially to your business?

Many business owners would see it as a risk worth taking. Is it?

Just recently a major transport company lost nearly $100m of business primarily due to their poor safety record, highlighted by a fatal accident that caused the death of two people in 2013. http://www.smh.com.au/business/fatal-crash-fallout-costs-cootes-transport-jobs-and-major-fuel-contracts-20140130-31plm.html

A major multi-national company would not allow them to tender on a major contract because of their substandard safety. Poor safety is often a symptom of poor systems and management. If safety is poor it is likely that there are other major issues with the business. http://www.abc.net.au/news/2014-02-03/cootes-accused-of-cutting-corners-on-truck-maintenance/5234052. The ramifications go further. The holding company in the past month has had $239m wiped off its value and now 540 jobs will be axed. Clearly poor safety does not pay! http://www.afr.com/p/futureforums/brakes_on_mcaleese_ipo_after_crash_gDAAZ3Yj6F9l7rCPJuInhK

By way of example, I managed a major interstate transport division for a public company where the managing director was passionate about safety. The evidence was clear; vehicle servicing schedules, management of driver hours, no speeding trucks, clean trucks (a good sign of a well-managed transport business), driver training and rigorous selection.

The evidence of success for the division I managed was emphatic. Low driver turnover, high truck utilisation, high profitability and no fatal accidents in the 6 years I managed the business. How was it done?

It was quite simple. A management system was implemented where drivers’ performance was reviewed weekly (over 120 drivers), drivers were involved in managing their own performance, driver selection criteria was rigorous and maintenance schedules were strictly adhered to. Supervisors and drivers were involved and a culture from senior management that safety was paramount.

As a business owner or manager, next time you wish to cut corners for safety keep in mind the consequences…………….and remember to ask the question: “is the business at risk?”

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