Cutting workplace safety corners costs business

Cutting workplace safety corners costs business

Too many New Zealand companies underestimate the impact of workplace injuries on their businesses and their bottom lines suffer as a result, says business consultant Chris Beath.

An engineer by training, the former general manager of Shell Todd Oil Services, the operator of the Maui and Kapuni gas fields, will speak at the ACC-hosted Bold Perspective Conference in Auckland next week.

“Many chief executives either don’t fully cost the impact of accidents on their companies or they accept these costs as an inevitable price of doing business,” he said.

“Others say they can’t afford safety, arguing they’re a small company with tight margins and lack the resources to develop safety systems.”

But these companies miss out on a three to fivefold return on a safety investment through lower operating costs, less down-time and better productivity, he said.

Mr Beath said there was a strong connection between a company’s safety record and its performance generally.

“The best indicator of how well a company is managed is to look at its safety record. There is at least a 10-to-one difference in safety performance between the best and worst companies in any sector of the economy, and this is usually reflected in their business performance, too,” he said.

“Companies that take the initiative on safety generally also look after staff properly and have good training and management systems. Safety really does pay.”

As general manager of the operator of the Maui platforms, Mr Beath oversaw a significant improvement in safety. Lost time injuries dropped from around the New Zealand average of 25 per one million man hours to a level significantly better than industry rates internationally of 2.3 per million.

In fact, Shell Todd Oil Services employees and contractors involved in major construction projects often go for more than a million man hours without an injury, he said.

Mr Beath said the company set a target of halving its injury rate each year – and achieved it.

“This dramatic reduction did not cost a lot of money - no more than $100,000 a year for the injury prevention programme - yet accidents used to cost between $1 million and $2 million a year,” he said.

“Our investment in safety was about the best investment you could make. Where else could you get finance returns of 500 per cent in one year,” he asked.

“The exciting thing is that many other New Zealand companies are also achieving significant reductions in accident rates and can demonstrate similar returns on their safety dollar.”

“Arguments that firms are too busy to spend time on safety, or that their safety performance is okay because it meets the legislative requirements do not stand up to any close scrutiny. The truth is that improving workplace safety is just about the best investment a company can make.”

Bold Perspectives runs from March 21-23 and with more than 30 speakers from around New Zealand and overseas addressing questions as varied as the cost of road accidents, the impact of grief in the workplace, employee involvement in improving safety and preventing falls among the elderly.

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