Guest post: How Workplace Safety Contributes to Business Success

Workplace safety is a transformative habit. Take, for instance, the Aluminum Company of America (or Alcoa) which in 1987 had a very poor safety record. Paul O’Neill took the helm as CEO. In a speech to investors and stock analysts he discussed only one thing: making Alcoa a safe company for workers. He didn’t talk about business cost reduction, supply chain optimization or profit margins. He didn’t talk about any of the things one expects from a CEO.

Within a year of his declaration the company’s profits hit a record high. When he left 13 years later, the company had more than quadrupled its annual net income. All because of a focus on worker safety.

Importance of Workplace Safety

Workplace safety is imperative to business success on so many levels. Long-term consequences of unsafe behavior can include litigation and remediation. Lost-time accidents affect profits and morale. A workplace without a focus on safety is often one with poor communication and management which are reflective of other inefficiencies of process.

Risks

Many workplaces require the use of chemicals or potentially hazardous substances. While every workplace must display appropriate literature for the chemicals used, like Material Safety Data Sheets, not every workplace thoroughly trains workers to handle and dispose of hazardous materials properly. Aside from the obvious safety risks for the workers handling these substances, the long-term consequences of improperly handled waste can be financially ruinous.

If a company causes a plot of land to be hazardous to the point of being rendered useless they will be held financially responsible for site clean-up and remediation. The Environmental Protection Agency then pursues an environmental lawsuit and Sevenson Environmental, or another third-party company, takes over the site. What might seem like a reasonable short-term cost cutting safety risk can really be a long-term fiscal death sentence for a company.

Effects of Improper Safety Precautions

Lost time accidents are one of the most high-profile workplace safety issues. In fact, that was the first safety issue O’Neill addressed in 1987. Lost-time accidents are tracked, and the statistics often displayed prominently with a “This site has gone X days without a lost time accident” sign.

A high volume of lost-time accidents leads to reduced productivity or higher overall payroll expenses, both of which affect the bottom line. Furthermore, workplace injuries can create, or contribute to, a culture of frustration and indifference. If employees aren’t actively engaged in pursuing success and safety daily, they certainly aren’t solving higher level problems like cost savings or strategic sourcing.

Simple Prevention Could Save a Life

Many risks workers take happen because of the perceived rules, as opposed to the actual rules. In the case of Alcoa, the strongest example is a fatality that occurred less than a year into O’Neill’s tenure as CEO. A young plant worker who had been with the company only a few weeks had attempted a repair on a machine with a piece of aluminum stuck in it. The young man had crossed over a yellow safety wall and pulled out the scrap of metal. Fixed, the machine restarted and the swinging arm crushed his skull, killing him instantly.

As the accident was recreated and analyzed in an emergency meeting only hours later, several contributing factors were identified that could have prevented the accident. Two managers saw but did not stop the employee; the employee was never instructed to seek out a manager before attempting any repair; no sensors were present that could automatically disable the machine when someone (or something) was present in the pit; and during training it was never made clear that the employee would not be held responsible for a breakdown.

For Alcoa, this was a landmark event. New policies were written up, safety areas were repainted for additional emphasis, and workers at every level could now voice opinions and suggestions for safety and proactive maintenance and remediation. Workers on the floor could suggest ideas for procurement or controlling manufacturing costs. And they did. The singular emphasis on safety opened up lines of communication and employees throughout the company elevated their performance for the greater good.

 

Author bio
After she received her degree in business from Brookline Business School, Alana Shine decided to become a consultant for small- to medium-sized businesses. She finds her work to be exhausting at times, but very rewarding.