Is a tough stand on safety good for your business?
Often business owners groan at the prospect of more safety regulations and higher costs, but when you look into it, there are real benefits to your business.
Just look at the costs of an accident or illness in the workplace. The chart below is from Work Safe Australia, showing the average cost of a workplace injury or illness to Australian employers in the 2012/2013 financial year. During this period, workplace injuries and illnesses cost Australian employers a whopping $3.1 billion.
Work Safe Australia also gives the example of a manufacturing worker sustaining a superficial crush injury to the left wrist. The total cost of that injury to the employer was over $117,000 – including costs of $82,000 to productivity and replacement costs of over $31,000.
The crippling indirect cost of employee disengagement
You hear the buzzwords ‘employee disengagement a lot these days. For good reason – the motivation of employees, their level of engagement with their jobs has a huge impact on the performance of any business. Gallup has tracked employee engagement across the globe for decades and it remains low.
According to Gallup’s, State of the Global Workplace 2017, just 24% of workers are engaged in Australia. The majority, or 60% are ‘passively disengaged’, meaning they go through the motions but really don’t want to be there. But the danger to any company are the remaining 16% who are classified as ‘actively disengaged’. These people do not like their employer and will influence their workmates and even customers against the company. These are people are also more likely to commit employee fraud – to steal from the company.
Nothing will move people to the ‘actively disengaged’ category faster than seeing a colleague killed or injured in a workplace accident – particularly when it could have been avoided. It is a big drain on their engagement and the feeling that the company doesn’t care about them is enough to push employees over the line.
Studies show that there is a direct correlation between workplace safety and employee engagement. In a recent survey of employers in the New Zealand workforce, Nielsen found that 58% believe that a good health and safety record helps to attract and retain good staff. An Australian study by Nielsen found that 80% of Australian new professionals and recent graduates look for positions at companies that value employee welfare over almost everything else
Companies with a higher number of engaged workers outperform those with lower engagement levels by a big margin: A 2013 study in the US by Gallup found the following median differences between companies in the top-quartile and bottom-quartile for engagement levels:
- 22% in profitability
- 21% in productivity
- 25% in staff (high-turnover organizations)
- 65% in staff turnover (low-turnover organizations)
- 48% in safety incidents
- 28% in shrinkage
- 37% in absenteeism
The WHS process promotes employee engagement
The process of involving workers in decisions relating to their safety and well-being is the most effective way of implementing safety in the workplace. It also has a huge impact on employee engagement – it shows staff that they are valued by the company and they in turn will value their jobs more and become much more efficient and effective in those jobs.