How To Make a Business Case for measuring safety culture in your organisation

As health and safety professionals know, a positive safety culture is good for business, not only from an ethical standpoint, but also in terms of productivity and efficiency. But how do you convey that to the decision makers within your organisation, to allow you to invest in resources to measure your safety culture, and improve it?

Decision makers are usually motivated by one of three arguments: legal, moral and financial. Today we will focus on the financial argument as it relates to improving your company’s safety culture, to help convince colleagues, up and down the management chain, of the value of a positive safety culture.

It helps to reduce accidents

In the current economic climate, it can seem difficult to justify all but essential expenditure. However, there are several financial reasons why investing in improving your safety culture makes good business sense.

“Cases of work-related injury and ill health costs Australian Employers approximately $3.0 billion per year”

Research shows that weak safety culture has a direct impact on the number of injuries suffered by workers. Several studies suggest that it underlies between 20 and 30 per cent of injuries suffered by workers.

Several other reports show a strong organisational safety culture to be associated with reduced risk-taking behaviour by workers, and fewer injuries to them. This is partly because organisations with strong safety cultures tend not only to have well developed and effective health and safety management systems, but because their leaders are good at sending messages to employees about their commitment to health and safety.

Incidents at work are costly to your business. Whether it’s a fatality or something relatively minor, there is a significant business cost involved. And it’s not just the direct costs that can be significant. Anyone who’s ever had to deal with an incident will tell you about the paper work involved, the time spent on the phone liaising with insurers and lawyers, the costs of hiring additional staff, or not having enough staff, not to mention the damage to your reputation as an employer.

It’s good for your bottom line!

There is increasing evidence that building a positive culture of health and safety provides a competative advantage in the marketplace. Research shows that companies that build a culture of health, for example by focusing on the well-being and safety of their employees, yield greater value for their investors.

“SafeWork Australia estimates that, on average, a single fatality costs a business $150,000, a single reportable injury $5,000, and a single case of work-related ill-health $5,800”

It helps you to win business

Increasingly, a good health and safety record can help you to secure new business, particularly in specific sectors such as the construction industry. Customers are looking increasingly for good health and safety performance from their suppliers, and many users of our consulting services and safety climate tool have reported using this evidence of their excellent safety culture to differentiate themselves from their competitors, to help win new and additional business. Furthermore, a good health and safety record can also support and improve your reputation for Corporate Social Responsibility (CSR).

It helps you put a number on safety

“If you can measure it, you can manage it” is a well-known saying, highlighting the potential for metrics to improve business decisions. However, health and safety performance differs from many other areas that are measured by managers, in that success is counted by the absence of certain outcomes rather than their presence. This makes measuring health and safety performance challenging. However, if organisational health and safety performance is going to influence strategic decision making, a way needs to be found to measure it effectively.

Historically, when measuring health and safety performance, organisations have tended to focus on the reactive monitoring of adverse events, such as injuries, cases of ill-health and dangerous occurrences. This is despite the fact that the absence of such events can often provide a deceptive sense of health and safety performance being adequate. For example, whether an adverse event results in a reportable injury is often a matter of chance, and therefore might not necessarily reflect whether a particular risk to health and safety is under control.

This is particularly true in organisations where low-frequency/high-impact events are on the risk register. In such organisations in particular, health and safety decision making needs to be more focused on what might have happened or what could happen in the future, rather than on the consequences of the event being observed, where a high-impact event might have been avoided by luck rather than because of good management.

Another limitation of over-reliance on reactive monitoring for measuring health and safety performance is that the effective use of failure rates to measure health and safety performance obviously requires most of the failures that have happened to be reported, which is often not the case.

For these reasons, it is widely regarded as good practice when measuring health and safety performance to combine reactive monitoring of failure events (lagging indicators) with more proactive monitoring of events, which aims to prevent failures in the first place (leading indicators). Measurement of safety culture is one such leading indicator.