Make Health and Safety a Competitive Advantage
The signs of a strengthening economy are everywhere as industries that had to shut down or significantly scale back operations last year are roaring back to life. In the United States alone, gross domestic product (GDP) for the first quarter of 2021 grew 6.4%, according to the US Bureau of Economic Analysis. In the wake of this growth, companies across a range of industries are competing for employees, customers, and market share. Yet many of these organizations are missing out on one of the most important competitive factors in today's market: employee health and safety.
Let's look at how having strong health and safety practices in place can complement other factors—such as quality products and service, innovation, timely delivery, convenience, and attractive pricing—in gaining a competitive edge.
Competing for Employees
Today, many businesses are struggling to attract and retain employees even as the US Bureau of Labor Statistics Reports an unemployment rate that has stubbornly hovered just above 6.1%. Larger corporations are tackling the challenge by increasing compensation. For example, Amazon announced that it is increasing the wages of 500,000 workers, and in many cases, the company is offering $1,000 signing bonuses. Similarly, McDonalds is providing $500 signing bonuses at its corporate-owned locations.
The financial incentives aren't necessarily leading everyone to line up for jobs in droves. Some of today's unemployed are parents who cannot afford to go back to work until their children fully return to the classroom. Millions of others are not yet convinced that the pandemic is under enough control for them to safely take jobs that require them to be onsite. Moreover, many of the unemployed are rethinking their careers. According to a 2021 survey by the Pew Research Center, 66% of unemployed people have "seriously considered" changing their field of work.
All of these factors point to the need for organizations to promote both opportunity for growth and quality of life in recruiting employees. The latter means having strong health and safety measures in place. After all, behind the statistics for workplace injuries, illnesses and deaths are the very real suffering and financial hardship these events can cause for workers and their families.
The US Occupational Safety and Health Administration (OSHA) recommends focusing on proactive strategies for ensuring health and safety. "Traditional approaches are often reactive—that is, problems are addressed only after a worker is injured or becomes sick, a new standard or regulation is published, or an outside inspection finds a problem that must be fixed," OSHA states. "Recommended practices recognize that finding and fixing hazards before they cause injury or illness is a far more effective approach."
Promoting compliance with OSHA health and safety standards is one way to demonstrate to current and prospective employees is that the company is making their welfare a priority. Another is conducting safety tours—live or via video—with job candidates to dispel impressions of dirty and unsafe work environments. A third is to market back the safety training, reporting, and personal protective equipment (PPE) in place to demonstrate the organization’s safety culture. Finally, the use of modern cloud and mobile-based safety training and management can attract younger candidates who expect similarities between their work and consumer experiences.
Whether an organization’s customers are consumers or other businesses, purchase decisions increasingly go beyond cost. There is an increasing awareness and demand for corporate responsibility that extends across employees, the community, and the environment.
For example, in May 2020, a coalition of Iowa groups called for a ”Meatless May” consumer boycott of meat to demand better working conditions for employees in crowded factories that had become Covid-19 super-spreaders.
Among business customers, there’s also growing demand for suppliers and partners to ensure safe work conditions. Notably, original equipment manufacturers (OEMs) across a range of industries understand that their own brand value can be helped or hindered by how well subcontractors or suppliers protect their employees. Beyond brand value, there’s also the risk of litigation, for example when there is an injury with a subcontractor’s employee working onsite for a construction company. As part of risk mitigation, many businesses will look at OSHA compliance and injury rates factors when choosing with whom to partner.
For highly regulated industries—notably food and beverage, pharmaceuticals, and medical products—safety is key to federal compliance. In these sectors, injuries can potentially cause contamination that requires whole batches or production runs to be rejected or recalled. The Wall Street Journal noted that a US Food and Drug Administration (FDA) report on Emergent BioSolutions did not maintain the plant in a clean and sanitary condition and that workers failed to adhere to proper procedures for wearing sterile gowns. Emergent is the contract manufacturer that contaminated 15 million doses of the Johnson & Johnson COVID-19 vaccine.
The Emergent is one example of how failing to adhere to safety procedures at one company can disrupt business continuity for its customer. There are many more cases where injuries to workers have disrupted not only a manufacturer’s business but that of one or more customers. Anytime a machine or piece of equipment is involved in an injury, it needs to be pulled offline until a full review and reporting are completed and any required adjustments to improve safety have been made. Depending on the set-up, the review of the machinery or equipment could put a pause on the entire production line, delaying the delivery of parts and in turn delaying the customer’s ability to bring products to market.
Companies can compete on safety and ensure business customers’ confidence by using digital environment, health and safety (EHS) solution to quickly report on safety practices, compliance, events and other related information. The live or virtual safety tours with job candidates can also be used to market back safety practices to prospective customers.
Growing Market Share
The money that companies pay as a result of employee injuries is money that cannot be invested in areas that contribute to growing the business’ market share—from research and development, to employees, facilities, equipment, and other capital investments.
Consider the 2020 Liberty Mutual Safety Index, which notes that the top 10 causes of workplace injuries cost U.S. businesses over $1 billion per week. Looking more broadly, Warren K. Brown, president of the American Society of Safety Engineers (ASSE), has noted that companies spend about $170 billion a year on costs associated with workplace injuries and illnesses.
OSHA violations, alone, start at $13,494 per incident, and the maximum penalty is ten-fold at $134,927. Then there are the costs to increased workers’ compensation claims, lawsuits, and lost business due to unmet deadlines or damaged reputations.
Those businesses that proactively put strong workplace health and safety measures in place—and avoid the high costs of health and safety incidents—will be best positioned to invest in delivering the innovative products and services that drive growing market adoption.