The goal of any organization is to make profits and continue to stay in business. Of course, there are a lot of things that make this very simple goal unattainable: unfavourable government policies, industrial actions, natural disasters, multiple taxations, etc.
Aside from the factors listed above – most of which are outside the control of the organization – there is also the issue of accidents and ill-health.
Yes, accidents are caused; but most times not deliberately, but rather, they are the results of a poorly managed health and safety systems – or worse, system not in place at all!
Most organizations put in place HSE management system only for fear of regulatory agencies, despite the fact that it is clearly good business practice to do so. Safety and health at work is usually overlooked until the need arises, and by then, the situation is already uncontrollable; and it’s begun to eat into the profits of the company. A single accident arising from a poorly managed hazardous situation can shut down a business – not just by means government closure – but the costs.
An accident cost; both the direct and indirect can triple or even quadruple the total revenue of a business, making it ever so difficult to bounce back. Let’s look at these:
Direct costs are those costs that are accrued directly from the accident. They are quite easy to calculate and reimburse. They include the medical costs incurred and the compensation payments made to the injured workers. Most of these are usually covered by insurance.
Indirect costs of an accident are more complicated and may continue to eat into the profits of the business months or even years after the accident until there is nothing left…
- Payment of other workers who are not injured, for example, those who stopped work to look after or help the injured worker and those who require output from the injured in order to complete their tasks;
- The cost of damage to materials or equipment involved in the accident;
- The cost of overtime imposed by the accident
- The cost associated with lost production, damaged products and raw materials, etc.
- Costs associated with retraining employees in order to resume production. In some cases, it might even be necessary to hire a replacement with all the associated hiring costs;
- Medical costs paid by the employer that are not covered by insurance.
- Wage costs due to decreased productivity once the injured employee returns to work. The victim may return to work nervous and extremely cautious, and even spend productive time discussing the accident with other employees.
- Costs brought about by any enforcement action following the accident such as prosecution fines.
What can be done?
It is better to be proactive than reactive. So having a health and safety management system is good business practice. By systematically identifying hazards, developing controls, and managing operational risks effectively, your organization would remain profitable and sustainable.
But not all companies have the resources to allocate to an HSE management system, including the need to employ a full-time HSE professional. And that is a problem…
Baca Resources has the competence and resources to help you develop and manage a customized, functional, and effective HSE management system. Our team of experts has had years of experience in different industrial sectors. So whatever your area of operations is, we have the technical expertise to help you manage your HSE system so that you can focus on delivering value to your customers, while also keeping your workers, investors, and all stakeholders safe and happy.
Get in touch today!