I don’t know how many times I have been told “my boss (management) wants us to be safe, but will not allow us to invest any time or money in a formal safety program. He just doesn’t believe that there is a reasonable payback.” I fully understand where these statements come from. There is no line on the balance sheet that indicates safety generated profit. However, on the other side of the ledger, there are a number of lines that can add up to a great deal of lost profit if safety is not taken seriously. Things like lost production time, cost of insurance, your workman’s compensation insurance rating, and possible legal costs defending against lawsuits are just some of the costs of not having a proper formal safety program for your company. In addition to these costs there are a large number of items more difficult to put a cost to, but just as real. Think about things like employee morale, possible OSHA inspections resulting in penalties and fines, and the difficulty in hiring and retaining good employees when they realize the lack of safety concern by management—not to mention the difficulty we would have defending our behavior if, God forbid, an accident in our facility resulted in life threatening injuries to any of our employees. I think that if you consider all of these potential costs you will have no trouble justifying the small investment that a proper formal safety program will require.
Let’s talk about some of the costs involved with a formal safety program. Of course there is the cost of the safety equipment that is necessary to keep your employees safe while performing their duties. However, this cost still exists even without a formal program and is likely to even exceed the costs that would be required if there was a formal program. This is because, with a formal program, the proper safety equipment would be itemized in writing and be the same for all employees doing the same work. Therefore this material, when purchased in bulk, will probably cost less than when doing it on a piecemeal basis. Another cost, of course, is the formal program itself. This cost is mostly a labor cost, because someone in your organization is required to spend the time necessary to compile the program on paper—although, in this day and age, it is more likely to be on a computer hard drive. Do not think that this is a small job. To do this properly there must be input by everyone, from the janitor to the president. I would expect that one person doing this job would be required to concentrate on it full time for a period of at least two weeks, assuming that they had the cooperation of everyone in the company. I am basing this estimate on a small company, say, not exceeding 20 employees, and as a gear shop only. If there are more people doing more jobs, of course it would take longer to accomplish the starting program. You noticed that I said “starting program,” not “finished safety program.” In these columns I have tried to emphasize that your safety program is an ongoing, ever-evolving thing. And if it is not, it is not applicable to your needs.
Okay, we have the starting program, what other costs will we have? Well, there is training. Yes, there is a cost associated with training your personnel on safe operating procedures whatever their job may be. In a future column I will cover some ways to keep training costs at a minimum and still accomplish your goal. There are also some costs involved with implementing the program, but they should be minimal. For instance, MSDS forms are readily available free from your vendors, so the only cost is taking the time to ask for them and then putting them in a form available to all of the employees that might be affected. As I said, the costs are really minimal when compared to the costs of not having a program. Talk with your insurance supplier. I am sure that if you have a good formal safety program in your facility, you will save enough on your insurance costs to make up the costs we’ve talked about here.