Cost Savings with Health and Safety

Wrong Perceptions

We have covered the cost implications of health and safety on a number of occasions. Unfortunately, the view amongst many business owners is that from a company financial point of view, health and safety amounts to a net cost against profits in order to comply with UK government legislation and/or European directives.

In some cases, this view may be borne out in practice, but where this is the case, it is invariably because the whole issue is not given sufficient priority.

Good Health and Safety is Good Business

We have seen evidence from our own experience with clients from many industry sectors and varying in size from SMEs through to multi-national corporations. We have been able to demonstrate time and again that good health and safety can also be good for company profits, as well, of course, as ensuring the safety of employees and others affected by business activities.

However, as a health and safety consultancy, we are inevitably open to the charge of, “well you would say that wouldn’t you?” and therefore it is always encouraging when independent corroboration comes along that supports our assertion.

Just such evidence has come to light recently in some new research carried out on behalf of the Health and Safety Executive by a Consultancy firm specialising in ergonomics and human factors.

The research identified and examined 25 cases where companies had introduced changes to address risks of musculo-skeletal injuries – that could range from the various conditions that we describe as Repetitive Strain Injuries (RSI) to serious back problems. In each of these cases, the interventions resulted in significant financial benefits for the organisations involved.

Types of Intervention

The nature of the interventions varied according to the risks that were identified but could be broadly categorised under the usual headings of:

Changes to the workstation
Changes to equipment
Changes to the working environment
Changes to work activities

Example - NHS Trust

By way of example, an NHS trust identified a high rate of lost time injuries amongst staff working in their operating theatres. In response, the trust introduced new procedures to minimise the need to lift patients by hand onto and off the operating table, resulting in a significant reduction in lost time.

The trust analysed the financial consequences of this intervention and identified that over a five-year period, they achieved a ten-fold financial saving over the cost of introducing the changes.

Example - Oil and Gas Company

Another example concerned a company in the oil and gas sector that identified a high incidence of manual handling injury resulting from heavy lifting operations.

Responding to these findings, the company installed additional mechanical lifting equipment, at a total cost of around £15,000. In the first year, they saw a marked reduction in injuries, leading to financial gains of the order of £45,000.

Clearly it is difficult to state emphatically that all the savings were the direct result of the specific interventions – real life is rarely so straightforward. For example, some benefits may well have accrued from an increased awareness by staff of the health and safety risks and how they should respond to them.

However, whatever the case, it all comes down to taking a serious approach to health and safety and realising significant financial benefits alongside the obvious human benefits for members of staff.

Borne Out by Our Own Experience

We are able to quote examples from our own clients. Of course, the bigger the company, the

larger the potential savings. For example:

One of our clients was able to make a saving of 20% on a £1 million insurance premium - a whopping £200,000 added to profit.
Another client ensured their RSI risks were properly managed, which resulted in a £50,000 saving on a premium increase.

By anyone's standards, those are hefty amounts and the cost of the intervention in each case was a small fraction of the savings.

Hidden Costs

Many organisations don’t reflect relevant costs in their financial reporting – such costs as:

Lost production time due to sickness absence
Temporary staff to stand in for injured employees
Increased insurance premiums or failure to achieve premium reductions
Lost management time following a serious accident or incident

The list could go on, though the point is that such costs are often hidden from view but they are real costs nonetheless.

It has often been quoted that “Good health and safety is good for business” and this is another piece of research that demonstrates the truth of this axiom.

Contact EDP HS&E Consultants for all your health, safety and environment needs. We can check your current arrangements and advise you about any changes or improvements you need to make.

To discuss your requirements, without any obligation on your part, please gives us a call on 01744 766000 or complete the Enquiry Form on our website.

In addition to our regular newsletters, you can also keep up with the latest information from EDP by visiting our blog at http://edp-uk.blogspot.com/