How The Value Of A Safety Program Increased Company Revenue
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Safety Brye: [00:00:00] When you're standing in front of your executive management team trying to convince them to make changes in their business practices, what reason are you giving them to change? Is it the cost of injuries are too high, our insurance, moderate rates are not right. Claims are out of hand. Right. Let's talk about other ways that you can make a business case for safety.

Let's get to it.

Hey, there's safety friends. Welcome to the Safety Geek Podcast. I'm Brye Sargent CSP and 20 years safety professional. After spending years training safety leaders across the globe for a large corporation and creating safety programs from the ground up over and over again. I am now sharing my processes and strategies with you. At the Safety Geek, you will learn how to manage an effective safety program that

[00:01:00] increases your management support, and employee engagement, all the while helping you elevate your position and move up in your career. If you're ready to step into the role of a safety influencer and leader, you're in the right place. Let's get to it.

Hello. Hello. Hello. My safety friends. So before we start today, I do have to tell you that at the time of this recording, which I am recording this about a month in advance, but at the time of this recording, I am getting over like the worst head cold that I've had in four years. I generally do not get sick.

You know, I used to travel for work like 33 weeks a year, so I got exposed to so much that I've spent years not getting sick. My kids would get sick and I would never get sick, and then covid happened and the whole world was in mask. And I didn't get sick. Never even had covid knock on wood. But last week I got so sick and

[00:02:00] I'm a little nasally because of it. So my voice might sound a little different, but I'm on the mic because I wanna make sure that I get this stuff recorded for you. Cause I have a lot of things planned to talk about. And in fact, today is kicking off a series about selling safety. And that is something that I want to help you with. So make sure that you subscribe to the podcast because the next, I don't know, five, six episodes or so, we're gonna be talking all about selling safety and how you can help make that business case for safety.

Okay? So just forgive my voice. Just know it's probably like a little deeper. I don't know. Maybe it sounds good and a little nasally but I apologize. And I definitely apologize to my editor if I am coughing into the mic, cuz I know I keep doing that, but let's get to it. All righty. So one of the hardest concepts that many safety professionals, and we are talking like

[00:03:00] professionals that are leading safety at like a corporate level over global companies. I even see them struggling with this. They can't wrap their head around how to measure the value of a safety program. And we are constantly talking about the value of safety, being about injuries and lives, right? Because you work safely, you don't get hurt. You know, people don't die. There aren't accidents.

But that talk does not move executives into action. And I don't want you to think because like they're coldhearted or anything like that, It's just they have a different set of goals than we do. Our goals are to prevent accidents and injuries. Their goals are to make a profit. So there's a gap in that conversation.

So it's time for us to shift how we speak about safety and put it in terms of company value, at least when we're talking to executives.

[00:04:00] So I believe that safety is one of the most important departments in a product driven organization. Now I'll concede and just say one of the most important departments, but you know, I am biased.

So let's just say it is the most important department. But regardless of what you are making, what you are selling, what you are distributing, if you have people involved in your process and there is anything in a safety sensitive nature, meaning that they're doing more than just sitting at a desk, punching away at a computer, or answering phones, right?

Safety adds to the company's bottom line. I like to say that safety is a profit center, okay? However, we are usually the very last department that gets added to any organization. So think about it. Think about all of your mom and pop companies that are out there. Say, I have an idea to make some widgets, and I start

[00:05:00] a company, right? I'm gonna start with production. I'm gonna start making the product, and then I'm gonna have a sales department, and they're gonna sell the product. And then I have to start hiring employees. So what do I do? I get an HR manager, and then we start getting a lot of returns. So then I get a quality manager, and then I wanna save some money and know what to do with the money.

So I hire a CFO and maybe merchandising. It isn't until accidents get out of hand. OSHA comes knocking on the door, or insurance costs skyrocket that they ever think about adding safety. So then what happens when safety is finally added to an organization? Because of that reason, their value is then tied to claims and injuries and accident rates. That's how our success gets measured. But honestly, if that is the only

[00:06:00] measurement of our success, it doesn't take that long to succeed because you can stop accidents from happening by just implementing the basics a lot of times. You can get those rates down to industry standard, and most executive teams would be happy with that.

However, that still means that people are getting hurt. And because of our nature and of what we do, we wanna keep doing more. And this is where our value truly shines. This is where we are more than just accidents and injuries. We are more than just claims and insurance because the truth is we are a profit center.

Now granted, people are not paying us for our product, but when you add to the bottom line, as much as we do, We are a profit center, but it is up to us to start telling them and sharing with them the value that we provide because we provide

[00:07:00] a lot of value, my safety friend a lot, and they need to understand that. So this is what I wanna share with you today. To start off our conversation of selling safety is understanding your value in the organization. Even if nobody else in the organization understands it, you have to know it yourself and you have to believe it yourself in order to sell it. So first and foremost, safe workplaces have less turnover.

Can you tell me how much it costs your organization to hire and train a new employee? So every new employee, they don't have to hire and train. Is money put to the bottom line that you helped put there? Because when people like where they work. They feel safe where they work. They're not gonna quit and go elsewhere.

Safe workplaces have a lower shrink rate. Do you know what shrink is? Shrink is where employees either steal product or product gets damaged. I can't

[00:08:00] say employees damage a product. That is some of the reasons, right? But think about it. If people like where they work, they're not going to risk their job and they're not gonna steal product, and then they're gonna be more careful with the product that is there.

You're always going to have some shrink just because of manufacturing and distribution and all of that good stuff. And things do get damaged on accident, and that's fine, but it does have a lower shrink rate. So what is your company shrink rate and how can we impact that? And what does that shrink rate equate to?

What dollar figure? Safe workplaces have a lower return rate. So if you are making a product, let's say I make a hundred widget. And 5% of those widgets get returned as defective. That costs me money making those widgets, those returns. And why are they getting returned? Maybe they're getting returned because they are defective, because the people don't like them. It's poorly

[00:09:00] made. So when you have a safe workplace, you're increasing quality, which reduces the return rate. Because happy employees create a higher quality product. They're proud of the work that they do, especially when you combine it. Combine safety with engagement like we talked about last month. Then they're gonna be happy where they work.

They're gonna create a higher quality product. Now, you're always gonna have returns. I mean, I'm sure you've bought stuff off of Amazon just to try it on and return it. I see that all the time. You can help reduce that return rate, especially when it is a quality issue. Alrighty. Safe workplaces have higher efficiency rates because believe it or not, the safe way to do things is also the efficient way to do things, because if you don't follow safe work practices in the long run, it's going to slow you down because warehouse Joe's gonna run into the rack and then that piece of

[00:10:00] equipment's down and then he has to go to the hospital, which is gonna slow everybody down. So it does increase efficiency. But on top of that, I've actually done several studies where I said, do your normal way of doing things and do the safe way of doing it following the safe work practices. I will time you on each, I will videotape you on each and we will see which one goes faster. And I have not to this day done that and had the safe way go slower.

And it is because the safe way is also the most efficient way because we are looking at the job as a whole and we're considering all the ergonomics of the job as well. So yes, safety increases, efficiency rates. How can you measure efficiency at your organization? That might be the number of widgets created an hour number of pounds lifted, I don't know, or delivered whatever it happens to be. But you need to understand how your company

[00:11:00] measures efficiency and what the cost of that efficiency is, or the profit of that efficiency, so that way you can speak in those terms. Safe workplaces have a decreased maintenance cost because safe workers are happy workers who take care of the equipment and the safe way of doing things is keeping the equipment in good shape, meaning really good preventative maintenance program.

And preventative maintenance reduces maintenance costs in the long run. I can literally walk into an organization and see their safety culture based on their maintenance of their facility. And it's crazy. You would think, oh, a coat of paint doesn't mean anything, but it does because when a place is well maintained, that means they have a good culture to take care of things.

Which means if they have that, then they're going to have safe work practices. So safe workplaces decrease your maintenance costs, and that is measurable, my friend. So you can actually

[00:12:00] see over time what your maintenance costs are. And safe workplaces have healthier employees. So I like to say that the wellness program should be owned by HR because

when you have, well, like healthy and well employees, you actually reduce your benefits costs, how much the company pays for health insurance, dental and vision, and all of that. So having healthy employees benefits HR because HR manages the benefits. Correct. However, When you combine safety in HR in a wellness program, you're also gonna maybe build in like stretching and a gym membership or a walking program.

So all of those wellness programs that we do to help reduce those ergonomic injuries and those muscular skeletal disorders will benefit the company in reduced benefits costs. Because the benefits costs are

[00:13:00] determined by the overall number of claims for the employees on that plan. So it's not like insurance plans are just like cookie cutter.

You pay this price regardless of who's at your company. No. If you have an older workforce, you're gonna pay more for your insurance. If you have a workforce that is constantly having heart attacks due to stress and poor health or diabetes from being overweight, your health insurance is going to cost more.

Now health insurance costs go up every single year, and I get that just like how maintenance costs go up every single year and productivity costs go up every single year. That's inflation and that's gonna happen, but you can help control that. Instead of it going up 20%, maybe it only goes up 15%. You know, so you can help control those costs. Now, I also like to say that safe workplaces increase sales. Because when you have high efficiency, when you have

[00:14:00] high quality, when you have employees and a facility that you like to show off to customers, it's gonna be a lot easier for your sales team to actually sell your product. Now, this all depends upon whether you actually bring customers into your facility, but even if you don't do that, the whole fact that you will have a high quality product.

And that it's made efficiently that you're actually making money off of it, and that you can have some wiggle room in your marketing because of the efficiency, it does allow your marketing team to do more. So even if it is a product that might end up on a Walmart shelf, it's still something that safety can affect.

Now, every time I talk about the value that safety provides to a workplace, especially to an executive, they want to see the studies. Where are you getting this information from Brye? Show me the research and I love me some research, so don't get me wrong. I love reading research papers. I love reading

[00:15:00] scientific journals and all of that, and I really wish that there was more research on this. There just really isn't that much of it, so unfortunately I haven't been able to find any hard research. And it is also true, so I don't want you to think like I'm not going to give into this. It is also true that correlation does not equal causation. So just because a location has a safe workforce does not mean that that's what caused their high sales and their low cost.

I get that, but when you've been in as many VPP sites as I have, or you have worked in organizations that have gone from no safety program to a full-blown world-class safety program and seen the results. I can tell you that it is safety. That is the consistent thread between all of those results, that when you have a safety program, like I worked at a company where we had a VPP program. We were

[00:16:00] rated the best in their DOT program out of all of their locations. We were rated the best in their quality program out of all of their locations, and we were also the most profitable. So you don't get that unless there's some secret sauce going on in there. And it's not quality alone, cuz we did have a good quality team.

Don't get me wrong, it's the combination of all of it. So as leaders. First and foremost, you need to believe that these results, that you are impacting these results in some way, shape, or form. Maybe you're not 100% impacting 'em, but you are impacting them. So it is our job to express that value that we're providing, and it starts with you identifying the costs that are involved in each of these impacts.

So understanding how much turnover costs, and shrink costs, and returns costs, and maintenance costs and benefits cost. And then starting to

[00:17:00] watch those production numbers to see if you can impact those as well. And then you just track those results over time, especially when you are doing some sort of change in process.

Whenever you have a push for a new policy, a new procedure, a new initiative. Maybe you're launching something, maybe you're kaizen, like we talked about last week, has implemented a new problem solving technique. Really watch those numbers during those periods and see how they change. And that is money that you just put in that company's bottom line.

And when you do this enough and you have that data to back you up, it is so easy to sell your safety program and your management team will start to realize that the value that those safe work practices are providing, and then it becomes even easier to hold their people accountable. That is step one of selling safety, my friend,

[00:18:00] is that you yourself need to believe about the value that you're providing and you have to be able to quantify it and don't talk in just injuries and accidents to your executive team.

Talk other ways as well. So like I said, this episode is kicking off a series about selling safety, so make sure that you subscribe so you do not miss the next one when it comes out, which likely will be next week. And while you are subscribing, if you like my jam here, if you like what I'm talking about, make sure that you leave a review.

It helps everybody else find the podcast, plus I love to read them and I would love to share your review on the podcast as well. I do believe I can only see the Apple iTunes review. Because I don't have Spotify and you actually have to like listen to it on Spotify in order to see the reviews. I can't just see it on my upload page for some reason.

But if you could leave a review, that would really help and I would appreciate it,

[00:19:00] and I will chat with you next week. Bye for now.

Hey, if you're just getting started in safety or you've been out this for a while and are hitting a roadblock. Then I wanna invite you to check out Safety Management Academy. This is my in-depth online course that not only teaches you the processes and strategies of an effective safety management program, but how to entwine management support and employee participation throughout your processes.

Are you ready to finally understand exactly what you should be doing and ditch that safety police hat forever? Then you have got to join me and your fellow safety scholars over at Safety Management Academy. Just go to thesafetygeek.com/sma to learn more and to get started. That's thesafetygeek.com/sma and I will see you in our

[00:20:00] next Students only live session.

Bye for now.