Safety Stigmas
It seems like companies often tend to only do the bare minimum to appease safety requirements. Safety is viewed as a money pit. So, they go through the motions to check a box. This mindset is holding your company back. What if I told you that safety can make your company 5x more profitable than it already is? Every executive in the business would stop and listen then. We must squash the stigma that all new safety regulations, whether administered via OSHA, DOT or locally, are just put in place to make someone else money at your expense. OSHA only established in 1971. Health and safety is a newer ideal in our industry.
It is difficult to determine return on safety investments. It is not exactly something you can make a graph for and present in a meeting. Safety has indirect relationships to your company’s bottom line. If you can respect how it’s all tied together, you may realize that investing in safety is worth it.
Worker’s comp premiums, PPE and signage are all real examples of hard costs against your company. Sure, these costs add up, but it doesn’t seem to pay back. When you see your company set up a proper controlled access zone with barricades, signage, and maybe even a flagger/spotter, you see lighting money on fire. Instead try this; every piece of debris that fell from overhead into the CAZ = Dollar signs saved. Every pedestrian or unqualified person that your flagger kept out of the CAZ = BIG money remains in your pocket.
So we should stop thinking, “I’m paying this guy to stand here all day.” And start thinking, “This guy is preventing the inevitable that could ruin my company.” If you decide to take a shortcut in this situation, and the God Forbid happens, the repercussions could far outweigh the money saved on the shortcut.
Your company has an Experience Modification Rating (EMR). It is the metric that insurance companies use to determine your premiums. The lower your EMR, the better rates you will have. Care for your EMR and your insurance costs will decrease yielding significant savings.
General contractors typically request EMR score during the bid process. GC’s heavily consider safe history before taking on a new subcontractor or even continuing repeat business. Owners and GC’s do not want to do business with companies with poor safety culture. Companies can easily be left off bid invitations for having a bad safety reputation. Preconstruction/Estimating divisions often engage superintendents, myself included, to get a feel what it’s like to work with a company in the field. There have been multiple occasions where I have explained that a certain subcontractor has an undesirable safety program. And a five-minute conversation excludes them from a bid invitation. Don’t lose out on potential projects for lacking in this department. Proven track records in safety are attractive to GC’s.
The next indirect relationship is employee retainage and hiring. The shortage of skilled and unskilled workers is getting very real. So, in many cases, the worker has an advantage they are not used to having: many choices. First, tradesmen do not want to join a company where the employer has a history of accidents. Then retainage – its simpler than we think. Sometimes it’s the little things (and they cost the company money!), but it retains the employees and keeps them in the field making money for you. The little things could include always having spare PPE when their gloves are beat up or their glasses are all scratched. Stock water too! The employee satisfaction for consistently having drinking water around (not to mention reducing dehydration) pays dividends.
To recap, safety investments cannot always accurately show up on a financial balance sheet. But the savings and the opportunities are there, now more than ever – from saving money on accident prevention, insurance savings, hiring, retainage, bid opportunities, the list can go on. Safety requirements are not out for you to spend unnecessary monies. They are here to protect workers, the public and the company. At the end of the day, the most important part of construction is not to complete the job on time and on budget. It is that everyone goes home in the same condition they got there.
