No employer wants to put workers, clients or customers at risk. Ideally, every workplace should have a strong safety culture that eliminates hazards, enforces compliance, and protects employees (and anyone visiting the worksite) from harm. But for a small business owner, the logistics can be overwhelming. Regulations are confusing. Equipment is expensive. Training is a substantial time investment. Enforcement can be challenging. Too often, a robust safety program is scratched off the priority list in favor of a bare-bones approach.
However, if small businesses don’t embrace safety, they accept serious financial risks and miss huge opportunities to improve their bottom line. If you run a small business, consider these three things when you decide how much to invest in workplace safety.
- An unsafe workplace is more expensive for small businesses
Small businesses pay big for an unsafe work environment. They have higher fatality rates, higher injury rates and higher workers’ compensation costs than large companies. They can also face higher regulatory fines. In 2013, companies with fewer than 20 employees paid almost four times more in OSHA penalties than those with over 250 employees.
And the potential risks of a weak safety culture don’t stop at injury costs and OSHA fines. Neglecting programs like fire prevention, hazard communication, and maintenance can lead to property or equipment damage, which results in huge costs and can cripple operations at a small business.
When an incident occurs, a large company more often has the money, resources and manpower to take the hit and keep moving forward. But for a small business, that same hit may be a knockout to your bottom line.
- A weak safety program can cost you business and goodwill
One of most destructive burdens a small business can bear is a bad reputation. The modern public increasingly expects companies to be ethical and transparent, as well as profitable. Clients, customers, competitors and the community are looking at how you run your business and treat your workers. And in the age of social media, reputations can be made or broken in an instant. Every hazardous work area, careless company driver, and injured employee can act as a billboard for your company. But a workforce that is trained, well equipped and committed to safety sends a far more valuable message.
For some companies, a poor safety record can impact more than just overall reputation – it can mean the immediate loss of business. Businesses that compete to win contract bids may be asked about their incident rates by a potential client in order to determine which contractor will bring the lowest potential risk and overhead costs. They might pass over bids from businesses with a high injury rates, or not invite them to bid at all. A bad safety record can also come back to haunt a company facing a potential challenge to a permit application or zoning change request.
- A strong safety culture provides major return on investment
So if a poor safety culture is risky, what are the rewards of a good one? According to the National Safety Council and OSHA, every $1 spent on employee safety can return between $2 and $6 in savings. Each time you prevent a lost-time injury, you save $37,000. But what are these savings? Direct costs include medical treatment, insurance fees and payroll costs from disability payments and overtime worked by other employees to make up for lost manpower. There are also indirect costs from reduced production and administrative burdens.
A strong safety culture can also alleviate two major challenges facing small businesses: employee turnover and company productivity. A company with fewer incidents is a company with fewer disruptions, resulting in a savings of time, money and manpower. Employees that follow proper procedures are more productive, and they are also less likely to quit. Poor company stability and lack of personal respect are two of the main reasons employees leave a company. When you invest in a safety culture, you show your employees that you are organized, on track and interested in their personal well-being.
So if you run a small business and view safety as expense you can’t afford, try to look at it from a different angle. Get educated about your requirements, your risks and your options. Consider the costs of an unsafe workplace and the benefits a safety culture can bring, then ask yourself: “Can I afford not to invest in safety?”
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