UK: IM Sounding Board - Safe firms have healthier profits.

UK: IM Sounding Board - Safe firms have healthier profits. - Twice as many people are killed in firms employing 50 people or fewer than in larger firms. Too often, health and safety issues are pushed on to the management backburner. Regarded as a boring

Last Updated: 31 Aug 2010

Twice as many people are killed in firms employing 50 people or fewer than in larger firms. Too often, health and safety issues are pushed on to the management backburner. Regarded as a boring inconvenience, they are ignored with sometimes tragic results.

Fatalities, human injury and ill-health aside, the waste of resources is simply staggering. Every year, UK plc loses 33 million working days through work-related accidents and illness, at a cost to the economy of up to £16 billion. The average direct cost to UK businesses is £200 for every person they employ and this does not include the less tangible but still real costs of damaged reputations, of reprocessing and of lost orders.

The mechanics for improving safety are already in place, with the Health and Safety at Work Act 1974 and the Management of Health and Safety at Work Regulations 1992, but accidents of all kinds continue to occur and the scope to do better is enormous. Recently, the Court of Appeal has warned that it is time for legislation to show its teeth. It has called for heftier fines and longer prison sentences where more blameworthy breaches of the health and safety code occur.

British business needs to understand that investing in good health and safety management is worthwhile. Handled the right way, it can be turned from a cost into a benefit. Good health and safety regimes save organisations money by reducing lost-time

accidents and employer's liability claims, and by avoiding court fines.

This can result in increased productivity, which, in turn, may help to win new contracts.

Some firms go to considerable lengths to check the health and safety competence of companies tendering for contracts. They find a 'carrot-and-stick' approach helps to drive up health and safety standards. Organisations that have integrated health, safety and environmental issues into the overall management agenda can testify to these benefits. Unipart International has cut its accident costs by £300,000 since 1996. United Biscuits has cut its insurance premiums by 20% in two years and seen a massive 60% drop in employer's liability claims, compared to a national average of 15-20% increases in claims. The privatised utility South West Water Services made £1 million in extra profits by implementing good safety management programmes. In the public sector, Norfolk Mental Health Care Trust implemented a new safety management strategy and cut its insurance premiums by 10% in a year.

These examples show that a target to halve losses to business over five years would seem eminently achievable. There is a more certain return from investment in health and safety than in new products, new sales drives, new processes or new equipment. Law enforcement provides the spur but the next significant strides forward will come from a better comprehension in business of the benefits that are available.

So where should businesses start? All organisations ought to report their accident and injury statistics in their annual reports, together with a true costing of any failure to safeguard people, plant, equipment and property. Once shareholders and stakeholders understand the cost of avoidable accidents and illnesses in the workplace, I am convinced they will start to put pressure on boardrooms to take the issues seriously. Organisations such as Nuclear Electric already do this.

Having to publish these figures would help to keep businesses on their toes and to focus their minds on important issues. Freedom of information allows people to comment and advise. It also ensures that organisations cannot hide their mistakes.

Some of the biggest and best companies in the UK are committed to raising quality standards. They are looking for long-term relationships with suppliers and insisting on higher standards of management and safety within the organisations they do business with. If smaller contractors and suppliers don't keep up, they will be edged out. There are twice as many small firms now as there were 15 years ago and, of the 500,000 new firms established each year, 400,000 go out of business within 12 months.

I would therefore like to encourage firms to share their health and safety know-how with customers, suppliers and nearby companies as part of a good neighbour initiative. Larger firms can lead the way by offering vacant places on health and safety training courses to smaller local businesses, helping them with risk assessments and talking to local school children about the risks on building sites, for example. Small firms must understand that investing in health and safety is worthwhile and that they need not tackle these issues on their own.

There is a lot of help available from a variety of sources and much of it is free, or available at low cost. The first port of call should always be the Health and Safety Executive, which provides a full advisory service.

Professional associations are another good source of information, as are safety organisations such as the Royal Society for the Prevention of Accidents, the Institution of Occupational Safety and Health and, of course, the British Safety Council.

The biggest cause of accidents is human error. Organisations that have shown commitment and high achievement in promoting safety have not only understood the value of systematic inspection and auditing of physical safeguards, of work systems, of rules, of procedures and of training but, in addition, they have paid special attention to umbrella management systems.

It is only by addressing the complex cultural and behavioural forces at work that safety becomes embedded into an organisation's ethos - getting things right first time, every time, and integrating safety into quality management. Safety then becomes a way of life and is not merely seen as a bolt-on extra.

Disasters can be avoided if we learn from experience and understand that accidents are rarely, if ever, the result of a single mischance but are usually the result of a train of events, which can be altered. We have the means to alter the future, so managing risk is synonymous with challenge, choice and opportunity.

The Health and Safety Executive Information Centre, Broad Lane, Sheffield S3 7HQ (0541-545500).

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