Guest Commentary

March/April 2008

Beyond the Numbers: Safety Programs Save More Than Money

Good safety records also have a positive impact on a firm’s standing with its employees, customers and the community

Anthony O'Dea Safety Director Anthony O’Dea is the corporate safety director for Gilbane Building Co., a construction management firm with regional offices across the country and a recent recipient of the Construction Industry Safety Excellence award from the Construction Users Roundtable. O’Dea represents Gilbane as a member of the AGC National Safety Committee, as well as on the AGC Safety Committees of Massachusetts and Rhode Island. A part-time faculty instructor at Northeastern University, O’Dea is a Certified Safety Professional and a Construction Health and Safety Technician. He serves as a voting member of the American National Standards A10 Committee and National Construction Safety Executives. O’Dea has a B.S. in civil engineering and has worked in the construction industry for more than 20 years. Website: www.gilbaneco.com

We all know the construction industry can be a dangerous business. It accounts for only 7% of all U.S. employment but 20% of all deaths on the job as well as more than 400,000 disabling injuries. According to Liberty Mutual Insurance Co., U.S. businesses spent $170 billion on direct workers’ compensation premiums last year.

But the costs extend beyond the initial statistics. According to the Construction Industry Institute’s Zero Injury Task Force, the indirect costs of injuries may be 20 times the direct costs. Indirect costs include training and compensating replacement workers, repairing damaged property, accident investigation and implementing corrective action, scheduling delays and lost productivity, low employee morale, absenteeism, loss of product, loss of revenue, loss of reputation, increased regulatory scrutiny and penalties, and poor customer and community relations.

More importantly, beyond the statistics there is the human toll. In fact, no single aspect of our work is of greater importance than the safety of our staff. Workers and their families suffer as a result of workplace injury through lost quality of life, lost income and hardship. Reducing worker injuries and the costs related to accidents is the right thing to do for the future of American business and its workforce.

Numbers Don’t Lie

Does implementing an effective safety plan on projects provide value? There is countless research to suggest it does. According to a Liberty Mutual Insurance Co. report of August 2001, 61% of executives surveyed say $3 to $6 is saved for each $1 invested in workplace safety. The federal Occupational Safety and Health Administration’s Office of Regulatory Analysis has further validated this with its own research that states, “Companies that implement effective safety and health programs can expect reductions of 20% or greater in their injury rates and a return of $4 to $6 for every $1 invested.” In addition, according to OSHA, those companies that implement effective safety programs as a condition of participating in OSHA’s Voluntary Protection Program have reduced injuries (and related costs) by 60%.

Cornell University conducted a study in 2001 of 400 construction companies and found that companies that implemented a substance-abuse testing program as part of their safety and health programs reduced injury rates by 51%. That’s a considerable number that shouldn’t be overlooked.

Other money-saving examples from the OSHA publication, “The Benefits of Participating in VPP,” include:

> Thrall Car Manufacturing Co. of Winder, Ga., which saw its workers’ compensation costs decline 85%, from $1.4 million to $204,000, as a result of implementing the safety programs required in OSHA’s VPP;

> Mobil Chemical Co.’s Joliet, Ill., refinery, which reduced its workers’ compensation costs 89% as a result of its VPP safety programs.

The key word is “effective.” The program must be agreed upon before the project begins and be a part of the culture on the jobsite. That means owners need to take an active role by setting standards for the safety program, selecting contractors based on positive safety records and performance, and supporting the program once it’s in place. All of the safety program guidelines need to be communicated to anyone who walks on to the site, and all workers must be held accountable for complying with safety goals.

Yes, It’s That Important

These days, safe companies are successful companies. Consider the progressive companies in AGC’s prestigious Construction Safety Excellence Award Program. The program requires companies to implement effective safety and health programs. Historically, the winners of the CSEA award have differentiated themselves from their peers by their safety efforts and, as a result of their safety management efforts, are among the most successful, respected and profitable companies.

It’s time to start investing in safety now.