Sometimes, all the business world needs in order to understand the unparalleled importance of employee safety is a pandemic or epidemic crisis. These days, protecting employees while they unfold their tasks and obligations is more paramount than ever and even seen as a long-term investment that helps diminish reductions in the company’s bottom line, though companies worldwide still have a lot to learn to achieve the highest standards in this regard.
Nonetheless, a persistent concern among upper management is the ROI for these endeavors, as they strive to strike a balance that satisfies both sides. The prevailing answer to this question is that, in many instances, investments in employee protection shield the company from expenses associated with legal non-compliance fees and penalties and contribute to better employee retention rates and a reduction in the number of fully paid workdays off.
Here are the outcomes you may expect when you place more emphasis on safeguarding employees at work and mitigating risks to their physical, mental, and emotional well-being.
Lower insurance costs
One notable bottom line constraint many businesses fail to consider is the insurance costs and how these are impacted by the claims the customer gathers. Because other, more straightforward costs such as employee training, equipment checks, and rental charges are more often encountered and brought into discussions, the expenses involved in insurance purchases seem to remain in the dark.
Needless to say, businesses have a duty of care toward the safety and well-being of their employees, and its breach can lead to a wide range of repercussions weighing down on the firm’s bottom line. According to specialists, something as humble as failing to protect an employee from trips and falls on a freshly cleaned floor without workplace hazard safety signs in place can result in hefty fines and claims to deal with. These definitely take their toll on a business’s profit, not to mention the business’s image and reputation. One too many claims, and your insurance provider may eventually choose to stop covering you.
On the flip side, you may not consider the economic impact thoroughly since the workers’ compensation coverage has your back and pays for the expenses of your employee. However, this is just one side of the problem that you can see. Beyond medical expenditures, other services may eat into your BTL, such as replacing labor or conducting further investigations.
Therefore, conducting a thorough assessment and investing appropriately in your worker safety strategy will prove advantageous, helping you steer clear of insurance-related complications and hassles.
Reduced financial damages associated with an infamous reputation
Revenue and reputation go hand in hand; one cannot exist without the other. The latter is intricately tied to cultivating a favorable brand image and has a lot of implications when a potential customer ponders whether they should choose your offerings or turn to the competition. Several elements can make or break how your audience perceives your business, such as your sense of community, associations with responsible or unreliable companies, goals it aligns with, and, ultimately, how the employees are known to be treated. Remember the Amazon scandal when the company was called out for employee underpayment or improper work conditions and treatment as well.
A poor reputation may come out of the blue and without any notice. The safety of your staff is one of the most potent sources from which unfavorable standing can stem. If your business is persistently considered to be compromising on safety practices, it will likely take a hit. On the flip side, if it sets the gold standard for a safe and healthy workplace, it’s bound to stay in the driver’s seat when it comes to retaining employees and customers alike.
More productivity or less downtime
It’s well known that a solid safety culture is the key to keeping employees healthier, more engaged, and content, all of which ultimately translate to increased output. The lower the risks and threats in the workspace, the more relaxed employees will carry out their tasks, thus increasing their focus on the quality of their outcomes and overall productivity.
Of course, just as with any investment, you want to measure the ROI. Several metrics can help you evaluate the results recorded, such as:
- Instances of adjusting the work setting and practice to adapt to the new needs of the ill or injured employee
- Number of sick days obtained
- Amount of time lost
- Task efficiency.
Conversely, poor health and safety strategies can eat into a business’s profits
Indeed, having your employees sustain injuries or constantly deal with threats and risks in the workplace can do nothing good, and your business’s bottom line makes no exception for harmed aspects. A deficient safety program can jeopardize your company’s financial stability in multiple ways, necessitating heightened awareness among senior management. These include both indirect and direct costs.
Hard or direct costs can encompass legal fees, medical expenses, dependent/death benefits, employee wage benefits, or claims investigation costs.
On the other hand, soft or indirect expenditures spawn a wide range of costs, including:
- Lower profitability and productivity
- Costlier insurance premiums
- Hazard mitigation expenses
- Workplace culture concerns
- Decline in staff motivation
- Worsened reputation
- Wage and hour costs
- Lower-quality work
- Training expenses.
Last words
If you want to avoid putting a dent in your financial success, use the recommendations above and carefully reassess your business’s approach when the situation requires this endeavor. Avoid anything detrimental to your financial stability and ensure you make a priority out of your employees’ physical, mental, and emotional health and safety.
Looking beyond the upfront expenses of incidents such as injuries and concentrating on the overall financial effect similar mishaps can have on your business will help you make better-informed, more confident decisions.
