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Safety and Return on Investment

Thursday, September 2, 2021
Safety and Return on Investment

Many business owners and financial personnel want to know the investment they make in a safety program produces a return. Studies indicate that every $1 invested in safety produces a return of $2 to $6. Any one-dollar investment that produces a two dollar return is a good investment, so the financial justification for investing in safety is a no brainer. 

Today’s competitive and challenging business environment means any return on investment is important to the financial health of the organization. Successful business leaders focus on financial impact, and improved safety is one effective way to guarantee better results.

As with all business metrics and initiatives, communicating results and initiatives to all employees is critical in assuring the success of those efforts. Employees should understand a financially healthy organization is good for them and their future. Financial success translates into greater opportunities to increase wages and improve benefits, and a successful safety program helps contribute to that success.

So, all good business leaders should gather their employees together in a meeting and communicate the importance of safety in guaranteeing financial success… or should they? Is it important employees understand the financial success safety programs can help create? Is financial success the most important benefit a safety program offers?

A very wise and important mentor of mine, Dave Valentine, had an excellent perspective on this subject. First, what is the most important goal of any safety program? I’d like to think the most important goal is preventing the death, injury, or illness of a valued employee. If that isn’t your goal, I suggest you reevaluate your priorities, because you’re at risk of losing the trust and confidence of your employees.

In his unique way of communicating important concepts, Dave suggested saving money is actually just one of many “side effects” associated with preventing work-related injuries. Additional “side effects” of preventing workplace deaths injuries include:

  • Improved profitability
  • Improved productivity
  • Improved quality
  • Improved employee retention
  • Improved morale
  • Reduced uninsured costs associated with accidents
  • Reduced cost of insurance

Because the beneficial “side effects” of providing a safe workplace only happen when injuries don’t occur, the sole focus and communication to employees must be to achieve a goal of preventing all workplace injuries. Messaging that includes a discussion of cost reduction can fall on deaf ears as employees really just want to know their safety is paramount. When injuries are prevented, all of the beneficial side effects follow.

While return on investment in safety is an important consideration for all employers, we need to be careful the financial message doesn’t overpower the much more important objective of preventing workplace injuries. You might be surprised at how closely employees pay attention to messaging. When employees believe their safety and health matters more from a financial perspective, it detracts from the culture of safety. A strong culture of safety throughout the organization significantly contributes to the likelihood of success.

Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.