Making the Business Case for a Safety Management System

Safety Management System

US companies spend $170 billion per year on occupational injuries and illnesses, affecting the bottom line of businesses through costs such as workers compensation, lost time, and medical expenses. In Australia, the picture is just as costly. From 2011-2012, Australia had 12 serious claims per 1000 employees. Serious claims take employees away from work for an average of 12 weeks. Australia had 228 worker deaths in the same time period. Workplace deaths cost $11 – $19 million. Yet equating how safety affects the bottom line of a company is often not a direct correlation when arguing the cost-benefit of a work health safety (WHS) expenditure. Often arguments are made for the implementation of a new safety program not because of cost-savings but because of compliance with the law or moral and ethical reasoning.

According to a study measuring the effectiveness of health and safety programs conducted by the Aberdeen Group in 2012, the top 35% of organisations at managing health and safety have 97% of their audit action items completed on time, a .3 injury frequency rate, and 91% effectiveness of operational equipment. This group is also 66% more likely than their counterparts to collect and store safety data in a central software system. They are twice as likely to use this system for historical and real-time reporting. They also have greater consistency in managing operations and processes across the company, and in ensuring compliance with a broad range of regulations.

Similar findings were reported in a study conducted by the University of Melbourne in 2014, which established links between safety and business performance, including productivity, cost, innovation, and profitability. It also found that support of safety reduced the likelihood of poor worker health and thus, long term costs. Professor Peter Gahan, author of the report, cautioned businesses regarding the high costs of poor safety records and the link to productivity. He warned that productivity declines when employees are injured and replacements must be trained, which is often more costly than reducing workplace risk.

Another study conducted by the Centre for Workplace Leadership (CWL) affirms that investing in occupational health and safety provides business returns. The report found that reputation and image are of particular importance to long range business health and are often overlooked when studying the effects of a safety program. Safe work practices are important to both productivity as well as long-term sustainability of the business.

Investing in work health and safety software such as myosh safety management system can save money and reduce risk. The short term benefits are reduced legal action, increased productivity and employee morale, and better financial performance through cost savings due to reduced workers compensation premiums, absenteeism and medical expenses. The long term benefits are employee retention, and competitive market advantages through increased reputation.

By Stacey Wagner


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