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Making the business case for health and safety

Making the Business Case

In difficult economic times you may need some help to make the business case for health and safety to your directors. The information following should help you, but if you need further help please contact us on +44 (0)121 248 2233.

Although, thankfully, in the UK notifiable fatal and serious injuries in the workplace are reducing, there are still more than one million injuries to workers annually and more than two million cases of ill health caused or made worse by work. Many thousands are still dying prematurely as a result of conditions such as occupational cancer. The annual cost to the economy is in the region of £30billion.

Despite this scale of tragedy and loss, companies that are hard pressed, especially during tough economic conditions, may ask quite understandably why they should devote precious money - and even more precious time - to upgrading their health and safety management regimes.

No business wants its people to be injured or wishes to be prosecuted or served with enforcement notices by inspectors. With an increasing focus on corporate social responsibility, every conscientious business owner or senior manager wants to know that they have done everything they reasonably can to ensure safe and healthy working. No one wants an accident or work-related health issue on their watch.

But when it comes to investing in health and safety, it is not just a case of doing the right thing; it is underpinned by a very strong business case. Furthermore, although it might seem wholly counter-intuitive, that case is even stronger when times are tough than it is at other times. The reason is very simple: accidents and ill health caused by work (not to mention non-injury incidents which are much more numerous) impose massive - but largely unrecognised - costs on business.

The Health and Safety Executive (HSE) has estimated that the ratio between insured and uninsured costs arising from accidents lies in the range of 1:8 to 1:36. So in the worst case, for every £100 recovered from the insurer, the business loses about £3,600.

In the case of a very severe accident, such as a fire or loss of a key worker in a small firm, such an event could spell the end of the business altogether.

There are other adverse consequences to think about too - such as loss of workforce morale (serious injuries can have a depressing effect on teams) and loss of corporate reputation. Indeed, for businesses which depend on maintaining a high competence and reliability profile to remain on clients' tender lists, accidents, injuries or enforcement action are very bad news. In contrast, having a good health and safety performance record, particularly if it is attested to independently by third parties, is very positive and can make the difference between winning and losing a tender bid.

In difficult economic times, when the options for improving the bottom line through increased sales and turnover can be very limited, investing in loss control becomes even more important. Taking time and trouble to upgrade management systems and procedures, tighten controls and enhance skills, perhaps by using competent health and safety professionals, can pay major dividends. The aim should be to focus on priority risk issues such as work-related road safety, hazardous manual handling or workplace transport operations or on tackling slips and trips, work-related stress and sickness absence.

Whatever the length and depth of any economic downturn turns out to be, businesses will need to keep their eyes firmly on the health and safety ball. But when the economy improves it is important that the "green shoots" of recovery don't become spiky brambles which can trip up the undiscerning organisation.

When business picks up, firms will have to cope with challenges such as an influx of inexperienced new staff, or competition for experienced subcontractors. The thought of losing a worker for a month due to an avoidable accident in difficult trading times might seem bad enough, but when things pick up it could spell disaster if an experienced team member is out of action. And on top of this, there is a need to maintain pressure for action on serious longer-term issues like occupational road risk or managing asbestos or occupational cancer, particularly in firms which may still be waking up to these dangers.

When presenting accident and incident data to boards, health and safety advisers should always be asked to include associated cost estimates to remind everyone at this level how much additional business they need to do to offset these losses. It is still surprising how few businesses cost accidents despite the fact that there are several useful online tools available.

With so many apparently complex legal requirements and so much associated guidance, and with such a focus on paperwork and record keeping, it is all too easy:

  1. To forget what health and safety really is all about - ensuring workforce wellbeing and business continuity
  2. Not to see it as part of the mainstream business agenda but as a highly-specialised legal compliance issue that needs to be delegated to specialists.

The reality is that because controlling risks to health and safety goes right to the heart of operations, it cannot be achieved successfully unless it is fully integrated with all other aspects of day-to-day business management. In practice, health and safety is inextricably linked to action on environment, to human resources issues and personnel development, to quality management, to fire and security and to business risk management generally.

In this sense, safe and healthy working needs to be led by directors and senior managers, using visible management techniques to help clarify expectations and secure real workforce involvement. The latter is crucial to enable workers to contribute their knowledge, ideas and commitment, especially to some of the tough decisions that must sometimes be taken.

For some years, the health and safety community has campaigned on the business case around messages such as: "Good health and safety is good business". Now, arguably, the time has come to invert this proposition and explain that you cannot be good at business management unless you are good at managing its associated health and safety challenges.

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