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Health and Safety Update (June 2009)

Making Health and Safety Pay

The HSE has published advice to businesses on how they can benefit financially from more efficient safety practices. This guidance uses case studies to illustrate how health and safety improvements can achieve significant cost savings, both in terms of potential legal costs and uninsured losses.

Calculating the Cost of Safety Failings

The HSE explains that whilst improving health and safety procedures may involve some cost, this outlay is offset by a reduction in insurance claims, lower premiums and increased productivity. In addition, uninsured losses have to be factored in to the equation. Norwich Union Risk Services estimates that uninsured losses from accidents in small firms can add up to £315 per employee, per year.

This guidance enables businesses to calculate the cost of potential uninsured losses using data obtained from HSE studies:

  • total cost of accidents at work that result in absences  = average uninsured cost per accident (£2,097) x number of accidents
  • total cost of accidents at work requiring first aid = average uninsured loss per accident (£33) x number of accidents
  • total cost of accidents at work resulting in damage to equipment (no injury) = average uninsured cost per accident (£141) x number of accidents

Examples of Good Practice

The HSE explains that an organisation can make financial savings by reducing:

  • minor accidents
  • downtime
  • long-term illness
  • absenteeism
  • reported Injuries
  • insurance claims and premiums.

Case studies are used to demonstrate how companies have tackled safety problems and achieved a successful financial return. The Port of London Authority achieved an 80% reduction in absenteeism over a period of five years by using the services of an occupational health doctor. Legoland Windsor introduced a 'no blame' culture and integrated health and safety into the day-to-day operation of the park which resulted in a 45% reduction in accidents and an increase in staff loyalty.

The St Regis Paper Company reduced employee insurance claims by 73% after employing a consultant to develop management systems and working with the trade union to improve employee relations. This same company also saved £100,000 a year over the past five years by reducing days lost due to absenteeism, accident investigation and downtime, through a combination of improved safety training, the fitting of machinery guards, the appointment of safety representatives and working with the HSE and trade union.

Security and logistical support service specialist to the construction industry, Wilson James, saved £145,000 in 10 months by installing an on-site medical centre to save staff having to go to hospital for first aid, 'MOT' checks and health advice.

Risk Assessment

This guidance also features advice on the five step risk assessment process on the basis that determining the hazards in a business will identify potential risks to the 'bottom line'. The procedure involves:

  • identifying the hazards
  • determining who might be harmed
  • considering the adequacy of measures in place to control risks and decide whether more can be done to control the identified risks.
  • recording the risk assessment findings
  • constantly reviewing and updating hazard precautions.

The document is available at

http://www.hse.gov.uk/betterbusiness/large/hsebooklet.pdf