The Economics of Occupational Health & Safety Training
When you think about what makes a business successful, what likely first comes to mind is profit. Beyond profit, perhaps you start to list the things that contribute to a business’ ability to churn a profit: good customer service, a sound business model, an excellent product brand, and management with inspired visions leading engaged staff.
Rarely does anyone consider an effective health and safety program when they think about a successful business; however, health and safety in the workplace is known to directly impact the bottom line (net profit or loss). Not only is health and safety an important piece in the profitability equation, but it’s also a contributing factor to what is known as the triple bottom line.
What is the Triple Bottom Line?
In today’s competitive global market, companies cannot rely on profit alone to survive or be successful. The triple bottom line is a company’s profits, their social and community contributions, and their environmental impact. Today’s consumers demand more, and that’s where the triple bottom line comes into play – consumers want to make socially responsible purchases from companies that have a positive impact on the world around them.
What Does the Triple Bottom Line Have to Do With Health and Safety?
Socially responsible companies value human capital. This means that the worth of the workforce isn’t undermined at the cost of safety in order to increase productivity. Fair business practices that serve to benefit the human capital are part of the triple bottom line. Human capital refers to patrons, people within the community, and the workforce.
Consumers want to spend their money with companies that support fair work practices, pay fair wages, and maintain a safe work environment that does not tolerate unsafe or illegal work practices or exploit the workforce. When consumers demand more of a company, the company must respond appropriately, or risk losing that consumer base that drives their profits.
How Does a Health and Safety Program Increase the Triple Bottom Line?
Companies with a positive triple bottom line approach to business have better financial performance, more loyal employees, better relations with customers, and attract more quality job applicants. Employee health and safety programs and wellness-management initiatives are important determinants of perceptions regarding fair treatment by the organization. Effective health and safety programs have the power to create measurable bottom-line returns, specifically health and safety initiatives that aim to reduce lost-time injuries.
What is the Impact of Lost-Time Injuries on the Triple Bottom Line?
Health, safety, and wellness programs need to be part of a company’s overall business strategy, not just something an employer does because they are legislated to do so. Consider the following impacts of a health and safety program on the bottom line: increased productivity that results from reduced absenteeism, and cost savings resulting from reduced workplace accidents and injuries, reduced compensation claims, and reduced benefits costs. Supporting an active safety program is about more than legislation – it is the right thing to do from a human stand-point.
Workplace Safety Economy: Numbers Talk
WSIB releases an annual statistical report called By the Numbers that details the economic statistics behind workplace accidents. In this report, the WSIB states that loss of earnings accounted for the greatest percentage of benefits payments made to injured workers. The good news? Loss of earnings benefits claims has steadily decreased since 2012. This suggests that stronger health and safety programs are keeping more workers from being injured and becoming less productive as a result. Consider the following costs that can result from one workplace accident:
- Medical bills, wages, and accommodations for the injured worker
- Associated overtime costs
- The cost of hiring and training a replacement
- Time spent by anyone preparing or processing the claim
- Lost productivity
- Increased insurance premiums
- Increased cost to benefits program
With all of the direct and indirect costs to the triple bottom line, not to mention the direct economic impact, it’s clear that a health and safety program is more than something you simply do. It is an important and integral piece of a company’s overall growth and success strategy. Gone are the days when you can simply use a good gimmick to sell a product – today’s consumer has a global mindset, and they demand products from companies that have a positive impact on the world around them – including the workforce supplying the labour.
Your company requires an active and effective health and safety program in order to start meeting triple bottom line directives and goals – it’s not just about profit anymore. It’s about financial growth, people, the environment, and protecting the best interest and well-being of the human capital involved in all facets of the business.
Written by Jennifer Miller | Curriculum Development Coordinator
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