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5 Ways Modern Safety Culture Reduces Costs for Manufacturers

Nov. 1, 2023
By Sandy Smith, Assistant Vice President of Policyholder Services, EMC Insurance Companies

Poor safety is costly — this isn’t news. But what you may not realize is how many ways an inadequate safety culture can negatively impact your bottom line. From reduced retention and poor morale to inefficient training and a poor reputation for working conditions, the costs of an ineffective training program quickly add up.

Here are five main ways manufacturers can cut costs by investing in their safety culture.

1. Prevent accidents through wearable technology.

One of the biggest trends we’re seeing in loss prevention for manufacturers is around the use of wearable technology. It’s a way for management and safety officers to safely and effectively monitor what is happening on the floor at all times — measuring noise levels, air quality, light levels, and more.

Wearable technology also records near misses. This is extremely valuable because in instances where an employee may not record an incident (because they didn’t actually get hurt, they only slipped), the wearable device will take note of each time an employee was at risk of falling. When all near misses are recorded, managers can quickly discern which areas may be in need of additional safety measures. And while reducing slips, trips and falls may not seem like a top priority, those types of accidents are among the top five loss drivers for manufacturers. Small improvements can truly make a large impact.

2. Reduce downtime with on-demand training.

The digital wave has reached the world of safety training. There’s a growing need for on-demand, meet-me-where-I’m-at training, as employees are used to accessing all the information they need on their mobile device.

In addition to meeting employee expectations, utilizing on-demand training enables manufacturers to keep production moving. Rather than pull employees from their workstations to sit in a room for safety training, courses can be assigned as needed and completed individually, resulting in a significant cost savings.

3. Avoid higher accident risks by increasing retention.

According to the Bureau of Labor Statistics, new workers are five times more likely to be injured on the job. Additionally, 40% of all injuries involve employees with less than a year of experience on the job. Plus, one in eight accidents happen on the first day of employment.

Add up the workers’ compensation costs for new employees and you’ll quickly realize how costly a low retention rate can be. And in today’s post-Great Resignation era, retaining employees can be even more difficult than before. That’s why even small solutions, like proper ergonomics, can make a meaningful difference.

These statistics also underscore the importance of proper onboarding and safety training from the get-go. It’s important that employers focus on getting all employees the proper equipment, gear and training from the very first day on the job.

4. Lessen the financial impact of safety investments through long-term planning.

Just as you’re always on the lookout for new technologies and solutions, consistently seek out opportunities to improve safety. Planning for maintaining and updating your safety protocols make it less of a financial burden. Plus, it sets you up to be able to take advantage of new innovations sooner, like wearable technology.

Not to mention, a long-term focus on safety focuses a lot on prevention. An accident that never happens is the safest and cheapest one.

5. Utilize what’s already in place to improve safety at no extra cost.

Of course, there are simple ways to improve your safety culture at no additional cost. Make safety a part of as many conversations as you can and instill it in your organization’s daily culture. Take your systems that you already have in place and elevate them. Ask your insurance provider for guidance on loss prevention programs.

Often, insurance providers offer safety resources at no additional cost. Don’t be afraid to ask for guidance.

Reinforce safety culture from the top down

Of course, no matter how many safety measures you have in place, they won’t be effective if the culture isn’t there. Safety starts from the top. Workers must believe that their management — from direct managers all the way up to the CEO — truly puts employees and their safety first. The absolute worst thing you can do for your company is treat safety like an item to check off a list.

Let’s compare Company A, which actively promotes a safety culture, with Company B. Employees at Company B are understaffed, overworked, and are hyper-focused on meeting their daily goals. They’re told time and again (whether through quotas, processes, or even observing other workers) that productivity is king. They know that, at the end of the day, they’re evaluated on how much work was completed. Company A employees also strive for maximum productivity, but routinely learn about what it means to work safely.

Now, say there’s a slick spot on the factory floor from an undetermined leak, stopping production at both companies. An employee at Company B might grab a bucket and move along with their day. While an employee at Company A would know how to properly clean the spill, as well as alert the proper staff, find the source of the leak, and flag the area as a potential slip hazard. While it may pause productivity for a short while, it is crucial for long-term success and overall cost-effectiveness.

Lead with listening

The biggest piece of advice I have for other executives is to really be receptive to feedback from the factory floor. Get comfortable with employees coming to you with potentially dangerous situations. For a safety culture to be effective, employees need to feel empowered to stop production if they see anything suspicious. They need to be supported when making that decision, knowing that safety is of the utmost importance.

For more information about how to streamline safety efforts, loss prevention, or resources for enacting these safety programs, reach out to EMC Insurance Companies or your insurance representative.

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