Why an Economic Downturn is Bad for Workplace Safety

When the economy is uncertain, companies look for every opportunity to trim their budgets.

Unfortunately, safety programs and efforts are often the target of cost-cutting measures, as they are viewed as cost centers (versus revenue generators). And while it’s true that safety doesn’t make money, it can certainly save an employer a huge amount of money due to injuries and other consequences of poor safety.

For agents, right now is the perfect time to support your clients’ safety efforts, especially if they are cutting back internally. If you can provide something the client is missing or taking away, your value skyrockets. This blog will examine why an economic downturn hurts workplace safety, the true costs of poor safety culture, and how you can help.

The impact of financial issues on safety

There are many ways that budget squeezes can hurt safety efforts in an organization, including:

1. 1. Not investing in maintaining equipment or safety protection like PPE
   2. Reducing or eliminating safety training to save time and/or resources
   3. Pressuring workers to work harder and/or longer, which can lead to more accidents
   4. Pressuring workers to increase productivity, which can lead to cutting safety corners
   5. Layoffs of the most experienced workers, when staff members with less tenure tend to have 50% higher injury rates
   6. Employees underreporting injuries and near misses because they’re worried about keeping their jobs

In fact, a Harvard Business Review study found that in companies struggling to hit their revenue goals, there were 5-15% more workplace injuries, for all of the reasons listed above.

The true cost of abandoning workplace safety

Reducing or cutting safety programs in any way can have much greater financial (and human) consequences than the cost of simply maintaining a strong safety culture. As one OH&S article proclaims: “If you think safety is expensive, try an accident!”

These facts likely won’t come as a surprise to you as an agent, but can be quite staggering when considered together.

1. 1. Injury expenses: A workplace incident or injury is incredibly costly. Work comp insurance will pay for part of it, but what about list production time, investigation costs, fixing damaged equipment, replacing the injured worker, project delays, reputational damage, potential lawsuits, lower employee morale and more? Just one workplace incident could cost more than an entire annual safety budget when you add up all the direct and indirect costs.
   2. OSHA fines: If OSHA comes calling - even if there hasn’t been an accident - you must still prove you have a safety program and records of safety training. Otherwise that could be a several thousand dollar fine.
   3. Increased premiums: Another consequence of a workplace incident is increased work comp premiums.
      
      

The opportunity for you as an agent

All these factors together open up a tremendous opportunity for you as an agent, both to build stickiness with your current clients and grab a prospect’s attention.

Insurance is important, of course, but insurance can’t prevent an injury or fatality from occurring. Instead, you can help employers plug their safety gap by offering a comprehensive safety training app like AutomateSafety.

Want to learn more about how AutomateSafety can add immense value to your clients and help you unseat any incumbent? We’d love to have a strategy discussion!