You have a lot of reasons to establish a safe workplace. First and foremost is the safety and wellbeing of your employees. Next is the common sense element – your employees can’t be productive if they are injured and unable to work.
Then there’s the cost of workplace injuries, something that can occur in any franchise industry. A recent University of California Davis study indicated that the total (employer and employee) cost of occupational injuries and illnesses is estimated at nearly $250 billion annually.
But what many franchisees may not know is that investing in workplace safety and injury prevention can actually yield a return on investment of between $2 and $6 for every $1 invested, according to the National Safety Council.
Understanding the real costs
The actual cost of workplace accidents may come as a surprise. Sure, there are the direct costs for workers’ compensation insurance and deductible or claim fees. But that’s just the beginning. The hidden costs, even with an insured program, can be another 2-5 times the direct costs.
What are some of these hidden costs? Starting with supervisory and administrative time in investigating and reporting, there are lost production time, overtime costs, damage to equipment, cost of finding and training replacements and much more. To add onto the pile, now there is OSHA’s new reporting requirement to notify them of every hospitalization. You can bet that if OSHA pays you a visit associated with a loss, you will also be facing regulatory fines that can go as high as $126,000 for a “willful” violation.
Here’s a look at the numbers. Let’s say the claim cost was $1,000 and the hidden or indirect costs were a conservative 4 times that. The total cost would then be $5,000. If your franchise’s profit margin is 5 percent, you’d need to create $25,000 in new revenue to cover the claim. And that’s just to break even on the claim costs – no profit included!
What you can do
Building a strong safety culture entails more than just preventing injuries. And while it may seem like a cliché to say that safety is everyone’s business, it’s true. Safety is truly a team effort and here is your playbook:
- Obtain “buy-in” from supervisors and workers: This begins with your willingness to fund any initial costs before you can see a return on your investment. In addition, you and your supervisors need to set the example with your own behaviors. If you see a problem, fix it; don’t walk by and pretend it’s not there. This sends the wrong message to your staff.
- Identify franchise-specific injury risks: Every industry has unique operational risk factors. What the restaurant franchisee should watch out for is not the same as a plumbing or cleaning franchisee.
- Develop and communicate written safety procedures: Unwritten rules and procedures become hazy and are far too open to different interpretations. Define safety in terms of behaviors that can avoid injuries. These may include using appropriate personal protection equipment and the right tools, keeping the workplace clean and uncluttered, learning proper installation techniques and the many other rules specific to your franchise.
- Define specific roles and responsibilities: All employees should know the safety procedures they are expected to follow.
- Train all employees in their roles: Train new employees, update procedures as necessary and conduct refresher sessions for current employees.
- Establish accountability: It’s just human nature to pay more attention to something that has a financial impact. Observance of safety procedures must become part of staff and supervisory evaluations and salary increases.
- Monitor behaviors on the job: Your everyday supervision, and that of your managers, should include watching for adherence to safety policies. Remember, it’s more impactful to compliment someone when they do something the right way.
- Ask for employee input: Your front-line employees see the potential risks and often have good practical ways to avoid them – if you ask for their suggestions. And, when they’re involved in developing the safety guidelines, they are more likely to follow them.
- Reward safe performance: Praising good performance is always a good way to reinforce it, not only with the individual, but with the rest of the team.
If this sounds like more than you can afford — think again! First, ask yourself if you can afford not to do these. Second and even more important, though, is that this need not be an expensive proposition. In fact, here are additional ways to improve your workplace safety at a reasonable cost.
Companies with a strong safety culture generally have fewer at-risk behaviors and lower accident rates. What’s more, these companies often have lower turnover and absenteeism rates, as well as higher productivity. In a nutshell, there’s no downside to a safe workplace – both for your employees and your bottom line.
Greg Andress, ARM, is safety and loss control officer at Frank Winston Crum Insurance, the affiliated carrier for FrankCrum, a national professional employer organization (PEO). He can be reached at GregA@FWCrumInsurance.com.