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ASSE makes business case for safety

April 2, 2004
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If more employers knew that it's good business to protect people in the workplace they would soon reap the rewards, American Society of Safety Engineers (ASSE) President James "Skipper" Kendrick says.

Companies that invest consistently in safety realize positive bottom-line results, reduced absenteeism, lower turnover rates, higher productivity, increased employee morale and a positive brand image, according to ASSE. Plus, as illnesses, injuries and fatalities decline so, too, do healthcare and workers' compensation costs.

Studies have reportedly shown that the indirect cost of an incident can be up to ten times the direct costs. For every $1 invested in an effective workplace safety program, $4 to $6 may be saved as illnesses, injuries and fatalities decline. Indirect costs include: training and compensating replacement workers; repairing damaged property; accident investigation and implementation of corrective action; scheduling delays and lost productivity; administrative expenses; low employee morale and increased absenteeism; and poor customer and community relations.

ASSE points out the following examples of positive bottom-line results:

  • An environmental services company in Massachusetts saved $8 for each dollar spent on a quality EHS program.

  • A West Virginia coal mining company reduced its workers' comp costs to $1.28 per $100 payroll as opposed to its competitor's rate of $13.78.

  • A fall protection program implementation reduced one employer's accident costs by 96 percent — from $4.25 to $0.18 per person-hour.

  • Implementation of an improved safety and health program reduced a large service company's workers' comp costs by $2.4 million over a two-year period.

  • And implementation of an OSHA safety program reduced losses at a forklift manufacturing operation from $70,000 to $7,000 per year.

    "There is a direct positive correlation between investment in EHS and its subsequent return on investment," Kendrick notes.

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