Health & safety risk: £3billion for your thoughts
Health and safety matters to your business. No matter how big or how small you are or the industry you operate in, the hidden costs of safety are having an effect on your bottom line.
Any workplace accident or injury could have a significant impact, with the potential loss of production time, increased insurance premiums, possible fines and compensation payments. Although there is a general downward trend in accidents and fatal injury rates, the cost to your business when things go wrong, has risen and the HSE calculates that work-related ill-health and accidents cost UK businesses £3bn a year. Even this figure is widely considered to be an underestimation of the true costs.
The fact is that employers have a legal obligation to ensure their staff are safe while at work. This means carrying out the proper risk assessments, managing any of the risk identified, providing employees with information, training and PPE as well as making sure that adequate measures are available in case anyone is injured or taken ill at work. In the last two years, new sentencing guidelines have made it tougher and more costly for managers, directors and UK companies to ignore their health and safety obligations.
In the current economic and political climate, many UK businesses are looking at ways of reducing business risk, whether that’s in their supply chain, future employment needs or in building confidence with and retaining their customers. This kind of atmosphere often leads to detailed spending reviews, with business owners looking at any opportunity to cut costs. Investment in PPE and other safety services is often under scrutiny. When any business is challenged to delivery profitable growth in an uncertain economic climate, there’s a danger that health and safety compliance is reduced to a box ticking exercise, rather than being seen as a positive investment that could reduce those hidden costs.
Any cost-cutting strategy will inevitably put the emphasis on price at the expense of quality and it’s here where the compromise is made and those ‘hidden costs’ that may result from a poor health and safety culture, or from using substandard or incorrectly specified equipment are lurking in the background, waiting to make an impact and potentially break a business.
Workplace accidents could result in a costly investigation, an increase in insurance premiums, the need to reorganise work plans and recruiting and training new staff. Fines are also on the up with the chance of incurring fines of more than £500k 20 times higher since 2014. If you have an incident, the HSE will now charge you £154 per hour to investigate the issue and for every £1 that is recovered through an insurance claim as a result of an incident, £8 is lost entirely. Then there’s the human cost, when things go wrong. When lives depend on it, health and safety should never be a Boardroom box ticking exercise. Boardrooms need to work to establish a culture of safety throughout the organisation, to pre-empt and mitigate the hidden costs. The best way to achieve this is by working with a partner and engaging with every part of the organisation with an integrated approach to safety. This kind of approach doesn’t have to be expensive, but the risk of treating health and safety investment as a ‘must do’ rather than a ‘must have’ could actually put your whole business at risk.
You can calculate the potential cost to your business by using Arco’s free Cost of Safety online tool.