Failing to create a culture that promotes and values safety is a costly mistake many companies make.
Research done by Acona for the Health and Safety Executive reports that at a macroeconomic level, global financial losses due to workplace injuries and ill health are estimated to exceed $1,250 billion per year. The underlying costs of accidents and ill health are estimated at $10.2 billion per year with up to 35 million working days lost. The total cost to society of health and safety failures could be as high as $28.2 billion a year.
As one example, in 2005 the natural gas company Transco was fined $23.6 million or the equivalent of 1% of its annual pre-tax profits for two major gas explosions.
In 1931, HW Heinrich first published on industrial accident prevention, introducing a scientific approach by pointing out the mathematical relationship that exists between the number of accidents of similar types and their severity. He proposed the most common cause of workplace accidents were the unsafe acts of its employees.
Heinrich’s research showed that only 10% of accidents occurred due to unsafe equipment or conditions and 2% were totally unavoidable, while a remaining and overwhelming 88% were caused by unsafe acts.
Not managing hazard identification effectively can result in significant financial loses – not only in obvious, often publicized, catastrophic accidents in high hazard industries, but systematically through constant drain on resources including sickness, absences and work related illnesses.
The costs of these incidents can be direct in the form of fines, compensation, insurance and sick pay, but they can also be indirect in lost productivity, increased management time dealing with incidents, reduced staff morale and a tarnished corporate image.
Evidence suggests that in many sectors there is still a lack of engagement in organizations. Many boards, directors and health and safety issues are still unclear as to their role in occupational health and safety leadership and appropriately mitigating risks.
Often responsibility is abdicated to one nominated HSE (Health, Safety and Environment) director. Companies develop silos and fail to communicate between parts of the company as well as not aligning the management of their partners and subsidiaries. At times health and safety operations are not assigned the resources they need due to the financial restraints caused by conflicting pressure for short term market returns over long term investments. The lack of resources include everything from not purchasing adequate safety equipment to not spending enough time adequately training employees.
Rubberstamping and groupthink is frequently a contributing factor as well. Everyone in the company assumes someone else above, beside or below them is identifying, tracking and resolving the problems. Particularly many companies assume by simply hiring someone to “do” healthy and safety operations for them, they are doing enough necessary to imbed a culture of safety.
The series of underlying problems preventing a safety culture can be compared to an iceberg. Incidents that result in fatalities and lost time injuries are all that is visible above the waterline, but underneath the surface is a widening pyramid of more frequent near misses and problems.
Companies may contribute to the issue by paying attention to the wrong KPIs. They log accident statistics, but they less frequently take the time to investigate near misses or general process failures, altogether many do not pay attention to actual adherence to the safety systems. They do not prepare for hazards that appear to be unlikely, perhaps because they have not happened previously or are believed to be adequately controlled by existing measures.
In the end, despite their best efforts, many companies fail to recognize that the behavior, attitude and competence in the conduct of their safety related roles of every single employee at all levels have a significant impact on the safety of operations.print