SAFETY HAS A COST

WHAT ARE THE SAFETY COSTS?
Think of your current job. If you got injured, became ill, or died what would be the affect on those around you and your company? What would be the cost? Well, here are some of those costs:

- Training cost of replacements. Think of having to replace someone with experience. The training can be done but the interpersonal relationships cannot be replaced. You will never get back to where you were as it difficult to replace the experience. If it is advanced knowledge you are replacing it can be very expensive to train someone.

- Damage to equipment, property, or products. As in the above example, the cost of equiment replacement can be expensive. If the accident did not happen, the money would have gone to improving the value of the plant. The cost of repairs may be covered by insurance but the increased premiums takes away money from adding value to the plant or product.

- Downtime for other workers. If the damage is extensive and the plant is down for 12 to 18 months for repairs, what happens to the other workers? They get laid off, moved to lower class jobs, etc. But at the end of the day it will probably cost them money as they will have lost a paycheck.

- Paper work. For any accident the will be internal company investigations and reports to fill out. If the accident is serious like a death or dismemberment, various government agencies will get involved. Once they are involved, you will have to get lawyers involved. The more players, the more paper work. If you are sued, the whole process and paper work can drag on for years. Initially it will take up a lot of your time disrupting your regular job.

- Increased Compensation or insurance premiums. In Canada there are workers compensation boards that protect the safety of workers. They are government agencies that charge companies fees based on their industry and safety record. As well, the companies insurance rates are based on past payouts and potential risk, so any serious accident can increase those payments for several years. Of course these past safety records can be used against the company if future safety issues arise.

- Impact on employee moral and productivity. When a serious accident happens work comes to a standstill from the shock of the event. If the company has a poor safety record the workers usually grumble about safety, concentrating more on grumbling than the job at hand. This consumes more of their time with moral and productivity being affected.

- Disruption in production or service schedules. Typically when there is a serious accident the government agencies will shut down the operation until an investigation has taken place and the company can prove it is safe enough to restart operations. How is the company going to meet it’s contractual obligations for production and material supplies?
Impact on reputation. No company wants to be on the front page of the newspaper or on the evening news due to an accident, explosion, fire, etc. Reputations are easy to loose and hard to develop or regain.

- Prosecutions and fines. In Canada, for serious accidents and death the courts will get involved. In British Columbia the maximum OH&S fines / prosecution (jail time) for the first occurrence is $500,000 &/or 6 months. For the second occurrence it is $1,000,000 & / 0r 12 months.

- Impact on the workers life. All accidents will impact the worker and his life. The more serious, the greater the impact. Just think how your life would be impacted if you lost a limb or had a near death accident. How would your death affect your family?

- Your companies ability to work. In a lot of industries they have safety performance indexes that contractors have to meet. If the requirements are not met, the contractors can not work on the job site or even bid on work. This goes for consulting engineers, vendors and contractors. We were working with Vendor A who met the safety requirements. Vendor A was bought out by Vendor B. Vendor B had a very poor safety record and could not meet the requirements to be on the job site. Since the safety record of Vendor B now applied to Vendor A, Vendor A was not allowed back on site. People were happy with the work of Vendor A and wanted them on site but management would not allow it. So, just an everyday business deal of one company buying another resulted in a company loosing work due to safety.

When you look at these costs it is extremely hard to put a monetary value on them. One unsafe act or you could be minding your own business and an unsafe act by someone else could change your life in an instant. So, remember safety is everyones responsibility and always be aware of your surroundings. Keep in mind, when you leave home in the morning, your family is expecting you home at night.

Articles: 

Get in touch with us

General Address

Project Management Association of Canada

1234 Kingston Road, Suite 125
Toronto, Ontario
Canada M1N 1P3

PMAC Certification Body

Project Management Association of Canada

Box 58043, Rosslynn RPO
Oshawa, Ontario
Canada L1J 8L6

Fax: (416) 986-5777

Education - This is a contributing Drupal Theme
Design by WeebPal.