THE COST OF HEALTH AND SAFETY

PETER CORFIELD, DIRECTOR GENERAL

THE NATIONAL ASSOCIATION OF STEEL SERVICE CENTRES

OCCUPATIONAL HEALTH AND SAFETY

ENCOMPASSES SOCIAL, MENTAL AND PHYSICAL WELLBEING OF WORKERS

SUCCESSFUL BUSINESSES HAVE IN PLACE:-

•COLLABORATION

•PARTICIPATION

•ENGAGEMENT

WITH EMPLOYERS & ALL EMPLOYEES FULLY INVOLVED

PETER DRUCKER

“THE FIRST DUTY OF BUSINESS IS TO

SURVIVE….

…THE GUIDING PRINCIPLE OF BUSINESS IS NOT

MAXIMISATION OF PROFIT BUT

AVOIDANCE OF LOSS”

HSE STATISTICS (2010/11)

•1.2 MILLION WORKING PEOPLE SUFFERED FROM WORK RELATED

ILLNESS.

•26.4 MILLION WORKING DAYS WERE LOST TO WORK RELATED

ILLNESSES AND WORKPLACE INJURIES (EXCLUDING CANCER).

•200 PEOPLE ARE KILLED AT WORK IN THE UK EACH YEAR (EXCLUDING

TRAFFIC INCIDENTS).

COST OF POOR HEALTH AND SAFETY AT WORK

COST OF POOR HEALTH AND SAFETY AT WORKCONTINUED…

•WORK RELATED HEALTH AND INJURY COST THE UK £14BN PER YEAR.

•HALF OF COSTS ARE FUNDED BY INDIVIDUALS, THE REMAINDER IS SHARED BETWEEN EMPLOYERS AND GOVERNMENT.

•BUSINESSES CAN INCUR FURTHER COSTS WHICH RELATE TO UNINSURED LOSSES AND LOSS OF REPUTATION.

ADDRESSING HEALTH AND SAFETY SHOULD NOT BE A BURDEN.

IT PROVIDES OPPORTUNITIES FOR BENEFITS TO BE REALISED, INCLUDING:-

•REDUCED COSTS/RISKS

•EMPLOYEE ABSENCE/ TURNOVER RATES ARE LOWER

•ACCIDENTS ARE FEWER

•THREAT OF LEGAL ACTION IS MINIMISED

•INCREASED PRODUCTIVITY

BENEFITS OF GOOD HEALTH AND SAFETY

BENEFITS OF GOOD HEALTH AND SAFETY

DIRECT COSTS OF ACCIDENTS & INCIDENTS

THESE ARE NORMALLY TANGIBLE, MEASURABLE AND INCLUDE:-

•DAMAGE TO PREMISES, PLANT OR EQUIPMENT

•SICK PAY

•OVERTIME TO COVER INJURED PARTIES

•FINES

•EMERGENCY/ ALTERNATIVE SUPPLY ARRANGEMENTS

•CLEANING SITE/FACILITY

INDIRECT COSTS OF ACCIDENTS & INCIDENTS

THESE ARE OFTEN IN INTANGIBLE, MORE DIFFICULT TO QUANTIFY AND INCLUDE:-

•LOSS OF EMPLOYEE SKILLS AND WORK OUTPUT

•LOSS OF OUTPUT DUE TO DOWNTIME TO UNDERTAKE INVESTIGATIONS

•COST OF INVESTIGATION

•TRAINING COSTS FOR REPLACEMENT OPERATORS

INDIRECT COSTS OF ACCIDENTS & INCIDENTSCONTINUED…

•INCREASED INSURANCE PREMIUMS

•LEGAL COSTS, COMPENSATION CLAIMS

•WORKPLACE MORALE

•EFFECT ON SALES

•LOST ORDERS REPUTATION

WORK RELATED ACCIDENTS & DISEASES ARE COSTLY

THE EFFECTS ON THE LIVES OF EMPLOYEES AND THEIR FAMILIES INCLUDE:-

•THE PAIN AND SUFFERING OF INJURY/ILLNESS

•POTENTIAL LOSS OF INCOME

•JOB SECURITY

•HEALTH CARE COSTS

•COMPENSATION PAYMENTS

COSTS TO EMPLOYEES (2010/1011)

WORK RELATED ACCIDENTS & DISEASES ARE COSTLY

DIRECT COSTS TO EMPLOYERS CAN BE ENORMOUS, THEY INCLUDE:-

•PAYMENT OF WORK NOT UNDERTAKEN

•MEDICAL AND COMPENSATION PAYMENTS

•REPAIR OR REPLACEMENT OF DAMAGED EQUIPMENT/PROPERTY

•REDUCTION OR TEMPORARY HALT IN PRODUCTION

WORK RELATED ACCIDENTS & DISEASES ARE COSTLY DIRECT COSTS CONTINUED…

•POSSIBLE REDUCTION IN QUALITY OF WORK

•NEGATIVE EFFECTS ON MORALE OF WORKFORCE

•INCREASED TRAINING AND ADMIN COSTS

•INCREASED INSURANCE PREMIUMS

WORK RELATED ACCIDENTS & DISEASES ARE COSTLY

INDIRECT COSTS FOR EMPLOYERS INCLUDE:-

•REPLACING THE INJURED PARTY

•TRAINING AND TIME TO ADJUST FOR NEW EMPLOYEE.

•TIME TAKEN FOR NEW EMPLOYEE TO ACHIEVE PRODUCTIVITY LEVELS

OF EXPERIENCED STAFF.

WORK RELATED ACCIDENTS & DISEASES ARE COSTLYINDIRECT COSTS CONTINUED…

•MANAGEMENT TIME TO UNDERTAKE OBLIGATORY INVESTIGATIONS,

WRITING REPORTS AND FILLING IN FORMS.

•ACCIDENTS GENERATE NEGATIVITY AND CAN INFLUENCE LABOUR RELATIONS

•POOR HEALTH AND SAFETY CAN RESULT IN POOR PUBLIC RELATIONS.

COSTS TO EMPLOYERS (2010/2011)

THE IMPACT OF ABSENCE FROM THE WORKPLACE

DIRECT CONCERNS:-

•PAYMENT OF SALARY FOR ABSENCE

•OVERTIME PAYMENTS REQUIRED TO COVER WORKLOAD

•LOSS OF OUTPUT/LOST ORDERS

THE IMPACT OF ABSENCE FROM THE WORKPLACE

INDIRECT CONCERNS:-

•TIME TO GET REPLACEMENT “UP TO SPEED”

•RECRUITMENT OF TEMPORARY/REPLACEMENT STAFF

LONG TERM ABSENCE EQUATES TO 80% OF ALL ABSENCE COSTS

ARE YOU INSURED?SOME CASES ARE COVERED BY INSURANCE:-

•EMPLOYERS LIABILITY•PUBLIC LIABILITY•VEHICLES, PLANT AND EQUIPMENT

A LARGE PROPORTION OF COST CANNOT BE RECOVERED. SUCCESSFUL CLAIMS SUBJECT TO EXCESS CLAUSES.

INDIRECT COSTS CAN BE 10/40 TIMES DIRECT COSTS AND ARE NORMALLY UNINSURED.

THE COST OF HEALTH AND SAFETYSUMMARY…

POOR APPROACH:

•TANGIBLE/INTANGIBLE ISSUES

•DIRECT/INDIRECT COSTS

GOOD APPROACH:

•FULL ENGAGEMENT OF WORKFORCE

•LOSS (AVOIDANCE) AND PROFIT OPPORTUNITIES