Good Safety Culture Leads to Increased Productivity and Profitability

December 14, 2018

Although many organisations believe that doing something more quickly — and often less safely — results in more productive output, the opposite is true across every business sector. Why is this the reality?

The Financial Case

No matter your work environment, reducing downtime is the key to maintaining productivity and requires running at peak efficiency. In the workspace, employees are critically necessary to maintain optimal productivity and, because businesses rely on employees in this way, injuries will lead to lost productivity in any workplace.

The direct and indirect costs of a workplace accident vary across sectors but are always substantial when the final calculations are made, e.g. lost time, lost productivity, cost of investigation and reconciliation process, cost of staff retraining, impact on claims culture, insurance premium increases, legal costs, lost morale, reputation loss, and so on.

Businesses that cut corners to save time and speed up production can at first seem productive and profitable (IF they are lucky enough to escape any costly accidents). In the long term, however, these environments tend to be unsafe, resulting in increased downtime.

While sustainable safety programs often require an initial investment, they also have a positive impact on employee health (physically and mentally) and healthy employees are more reliable, more productive, and good for the bottom line over the short and long term.

The Psychological Case

Safety and security are intrinsic to the human psyche (e.g. Maslow’s Hierarchy of Needs) and a priority for most organisations. When people begin to trust the safety message and feel like a valued part of the whole, productivity increases. Feeling valued and respected at work is one of the best factor predictors of productivity no matter the industry.

Organisations that prioritise and invest in proactive safety culture as a primary business pillar consistently report increased staff morale, decreased absenteeism, and increased productivity and quality in comparison to organisations that don’t invest in their safety culture.

The Real-World Evidence

Former Alcoa CEO Paul O’Neill prioritised Safety Culture when he took over in 1987. The emphasis was on ‘Zero Accidents’ and, despite negative feedback from his peers and company stakeholders, O’Neill quickly showed that a focus on his people’s most basic needs had exponential benefits in other areas of the business.

After just one year, Alcoa’s profits hit a record high. O’Neill had managed to lower Alcoa’s workplace injury rate to one-twentieth of the American average and simultaneously raise the company’s annual net income by a factor of five. He asserted that the same habits that ensured reduced workplace accidents paved the way for profitable innovations within Alcoa.

If you want to connect your staff with safe behaviours to reduce accidents, increase productivity, improve morale, and boost profit, it’s time to invest in proactive and sustainable safety culture solutions.

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