3 Keys to Building a Safety Culture - Insurance Thought Leadership

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September 20, 2021

3 Keys to Building a Safety Culture

Summary:

A strong safety culture can actually save your company money if it avoids incidents and delays.

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Mitigating risk requires strategic planning. However, if you form a strategy, then print it on paper, toss that binder on a shelf and forget about it, that totally defeats the purpose.

With safety, in particular, we need more than just a neglected document. We need a culture that employees live and breathe. Whether that safety culture is driven by technology or policy, it should be woven into the very fabric of company operations. 

Let’s apply this to the supply chain. 

The basic intention is to move goods and services around the globe as smoothly as possible. In this industry, where so many variables are constantly changing and goods are exchanging hands, operating within a safety culture creates an environment that is less likely to have a disruption or delay. Oftentimes, when companies investigate incidents, they find that proper protocols may have been in place but were not followed. 

A proper safety culture is first and foremost about ensuring employees’ safety and well-being, but there are other benefits as well. A strong safety culture can actually save your company money if it avoids incidents and delays. Let’s dive into how exactly a company can foster a culture of safety.

Communication leads to efficiency 

A hold up at any point along the chain has a domino effect of disruptive consequences for all ensuing steps. Safety shortcuts that seem like a time saver in the moment can end up doing the exact opposite. It’s important to make efficiency a priority over speed and to support that goal through clear communication. 

Consider a manufacturing plant where a worker is required to shut off a machine, lock it and deploy the safety shield before leaving that station, even if the person is taking a break that’s shorter than the time it takes to ensure those safety measures. There’s a risk if those three things don’t happen. 

The potential consequences are a serious injury, or worse, and representatives from Occupational Safety and Health Administration (OSHA) coming to investigate the operation. That creates a bottleneck early in the supply chain process and delays future steps. 

Adopting a safety culture starts at the top. Management needs to make priorities visible so employees adjust their frame of mind accordingly. If it is perceived that the priority is to push the limit of speed at the manufacturing plant, it’s no surprise that an employee wouldn’t shut off a machine, lock it and ensure the safety shield is deployed before taking a quick bathroom break. The potential consequences of speed would actually hinder efficiency in this case.

Having signs within the plant that clearly identify a safe working environment as the top priority can help assure employees that expediency is not tied to their paycheck. This clear communication allows them to be more diligent about their work, more productive and willing to go the extra mile because there is mutual loyalty. Using safety as an incentive, perhaps offering a reward for accomplishing milestones of incident-free work, can help drive home its importance. 

See also: 4 Keys to Online Safety Training

Technology can help realize insurance savings

An unsafe working environment can come with exorbitant insurance costs that will hurt profit margins. If that occurs, it’s usually followed by a downward spiral. Lower profit margins lead to cutting corners, which leads to more accidents and more insurance claims. Stopping that vicious cycle before it gets out of control is the best strategy. 

Because those costs can be so high, forward-thinking companies are willing to invest in risk-management tools that provide a more active approach. 

For example, a trucking company could install a system on each cab that tracks speed and braking habits, accounts for speed limits and weather conditions and provides data to the company. The company needs to follow through on the data, coaching any driver who isn’t safe on the road and offering tools to develop safer behavior.

Companies also might install devices within cargo shipments that monitor the goods being shipped and immediately alert local law enforcement if the truck or cargo is somehow stolen.

Gathering data, and then using it to change behaviors that foster a safer environment, is a powerful tool. Lowering the frequency of incidents generates data that provides leverage when negotiating insurance terms and conditions. Underwriters can see that the data is acted upon and that those actions yield safer results. Companies that can prove this have an advantage, which can result in lower insurance premiums.

Engaged employees keep business going

A safety culture won’t work unless employees buy in and see a benefit beyond the company’s bottom line. Through training efforts, management can make sure that employees see the value and are engaged with the safety culture. 

Any incident is a disruption to business, and some are more quantifiable than others, but employees can help mitigate most of them. Even if an incident results in an insurance payment, and therefore doesn’t have a huge financial impact, there could be other costly ramifications. Perhaps a vendor becomes aware of an incident and chooses to stop doing business with you based on how you operate. 

While it may not always get recognition, erring on the side of safety keeps business running smoothly. It’s difficult to quantify the benefit for a grocery store that ensures non-slip flooring and has well-trained employees that are quick to clean up a spill, limiting slip-and-fall accidents and potential insurance claims. Some societal benefits may go unnoticed, but they are important valuable. If employees didn’t notice the spill in aisle five, or were too slow to clean it up, and a customer were to slip, fall and sue, the cost of liability plus the reputational harm may be enough to threaten the store’s ability to remain open. 

See also: 5 Safety Keys for COVID-Era Building

Being hit in the financial pocket, whether from legal costs or a damaged reputation, always gets an owner’s attention and usually results in a greater emphasis on safety culture. Ensuring that employees are focusing on safety before an incident happens can avoid loss of revenue and reputational hits.

If you truly make safety a part of your culture, that will flow through the organization and throughout the supply chain. Partnering with companies that value a safety culture will help ensure the supply chain operates more efficiently and with less disruption.

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About the Author

Pat Stoik is the chief risk officer at Overhaul. Stoik has over 35 years of underwriting and broker experience, most recently serving as senior vice president for Great American Insurance Group.

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