Last week, we took a look at the financial costs of injury and illnesses incurred in the workplace. The resulting numbers were significant to say the least. An estimated $1 billion is spent per week in direct costs related to workers' compensation, and $4 billion a week in indirect costs.
In a down economy, cutting back costs on anything that isn’t perceived to be immediately necessary is inevitable. And yet, even though the above figures have been floating around for the last two years, workplace safety is often one of the first things to suffer with budget belt-tightening. The effects of cutting your safety budget are across-the-board negative, from jeopardizing the health and wellbeing of your employees to potentially costing your company much more than you could ever hope to save.
For Part 1 in this week’s series, “Safety In A Bad Economy,” we’ll explore the effects that downsizing has on workplace safety.
Job Security Impacts Job Safety: When the economy hits your business hard, layoffs are one practical way to save your company money. Although this course of action may be inescapable, it’s important to know how layoffs and concerns over job security affect workplace safety.
1. As fewer people do more, they are both overworked and concerned about job security. When that happens, focus on the task at hand and attention to detail may suffer.
When you have fatigued workers concerned with peripheral worries of whether they are next, that invariably creates a distracted workforce. And distractions create a higher potential for accidents to occur.
2. Workers are less likely to report safety infractions. No one wants to be perceived as the problem, so they may stay quiet in order to avoid being let go.
Workplace safety is a team effort. Safety managers and supervisors can’t see every little thing. Much of the time it’s your employees who report when a machine part is failing, when there’s a spill on the floor or when someone is driving a forklift erratically. Without this information, there’s a good chance you won’t be aware of all potential hazards.
Updating Aging Equipment: When your company is financially sound, you likely have no problem drawing on funds to update worn equipment. However, when the economy goes south, many companies attempt to extend the life of their aging equipment by retooling parts to save money. This quick fix often increases the likelihood of breakdowns and accidents.
1. If your equipment breaks down, you’re losing productivity.
And when you’re losing productivity, you’re missing deadlines. When you miss deadlines, you aren’t filling orders. When you aren’t filling orders, you could lose your customer’s confidence and their business.
2. Workers are easily injured from malfunctioning equipment.
The costs of workplace injuries to your company are large and potentially devastating to your bottom line. There are direct costs, and then there are indirect costs (the more costly of the two). When you attempt to save money by ignoring malfunctioning equipment or putting off repairs, you risk incurring the biggest cost of all: a life.
These are just two of the most common ways that workplace safety is compromised when a bad economy results in budget cuts. Check back on Wednesday, when we’ll dig a little deeper to illustrate how cutting corners on workplace safety could end up costing you a whole lot more in the long run.
Ready to learn more about making your workplace both safe and financially sound? Call 800-523-5367 or click on the button below to speak with a safety specialist at Arbill.