The bottom line on safety Featured

8:00pm EDT July 26, 2009

Most business owners today will claim that safety is an important aspect of their business, but do they really realize how much their company’s safety culture impacts the bottom line? The way companies manage safety is what distinguishes them from their competition. Without the proper safety management, losses can occur at any time due to inadequate training for newly hired employees, unforeseen hazards, lack of internal accountability or, most often, as a result of focusing on getting the job done without making a safe environment a priority.

Regardless of the causes of accidents, the employer is legally and morally responsible for protecting employees from hazards and injuries in the workplace. The only way to protect yourself and your business is to put policies and programs in place to minimize those risks from happening and prevent future problems.

“Any time there are losses in a company, you face possible morale issues among employees and loss of production time to deal with the situation and subsequent investigations into the accident,” says Gerry McEwen, a safety/loss control representative with GMGS Insurance Services. “You also face employee downtime due to the loss and investigation. And if there’s a fatality, you will have to spend time and money on employee counseling. There will be major effects from such losses on the company overall, not just on the employees but to the bottom line.”

Smart Business spoke with McEwen about safety and risk management and the key components of effective programs.

What priorities should employers focus on to reduce safety risk and losses?

  • Be responsible for your employees; treat them like they are your greatest assets. Train your new hires and existing employees, making safety one of the forefronts of your business. Let employees know you will provide a safe environment for them to work in.
  • Hold all employees accountable. This includes everybody, from upper management all the way down the chain. If you do, everybody will benefit.
  • Complete regular inspections to ensure everything is safe and working properly in your company.
  • Establish proper engineering procedures and administrative controls.

What are the benefits of having safety and risk management programs in place?

Bottom line, your company will pay lower insurance premiums and reduced workers’ compensation costs. Insurance may pay the immediate costs of losses, but in the long run, a company always pays for its claims. Your employees will also be happier, more productive and morale will improve throughout the company. No matter what type of company you have, the happier the employees, the healthier the bottom line. Safety enforcement also becomes easier as employees see the benefits of maintaining the safety standards.

How do you educate your employees on safety programs and help them understand their importance?

Train your employees, and make sure they understand the benefits of your programs as soon as they are hired at the company. By making safety a precedent you will be able to more effectively train your employees and communicate your safety standards. Communicate the company’s commitment to the employees and to their personal safety. Encourage your employees to participate in evaluating the effectiveness of the training and improving your company’s safety program. If they help to create it, they are more likely to follow it. The ultimate result is for your employees to make your safety programs their safety programs.

How do you enforce and maintain these programs so they continue to reduce losses and risks?

Safety begins at the top and management must be 100 percent on board with the various programs. The programs will only be as effective as you enforce them to be. Once those written programs and procedures are in place, proper enforcement, accountability and documentation will keep your company and employees protected. Make sure you have somebody knowledgeable audit and evaluate the program’s effectiveness. Utilize all the tools available to you including internal and external resources. If your broker is focused on risk management and not just collecting insurance premiums he or she should be providing loss control services and also assisting in coordinating the loss control efforts of your chosen insurance carrier. Regardless, an employer must not merely rely on such outside sources to do the job; this moral and legal obligation cannot be delegated to others — it is your job.

A key aspect in an effective safety program includes reviewing the supervisor’s inspections and employee discipline and accident investigation. Are investigations done procedurally to list excuses without finding the root causes of the accident? Do investigations produce positive solutions and do they actually implement the corrections? You have to make sure your company identifies the desired goals and objectives in the programs.

How do you deal with a loss or risk if it does happen?

Take immediate care of your employees at the time of the accident, especially if they need emergency attention. When you assure the injured employee and his or her family that they will be taken care of, you can avoid many unnecessary legal costs in the future. It is paramount to determine the root cause of an accident and not just put a Band-Aid on it. Once you determine the cause, communicate this to all your employees. Every accident can be converted into a safety lesson and this will minimize future accidents while further protecting the company’s bottom line.

Gerry McEwen is the safety/loss control representative at GMGS Insurance Services. Reach her at or (949) 559-3372.