Health and Safety Risk Assessment Cost
When employers consider the implementation and maintenance of an effective health and safety program, it is imperative to look further than what it will cost to implement and maintain a system to see the health & safety, and financial benefits that can be derived from ensuring a healthy and safe work environment.
Apart from saving on costs associated with penalties and fees to COID, medical expenses of treatment for injured or ill employees, there is also the health and safety risk assessment costs which are reduced as the system starts working for the employer, instead of the employer working for the system.
When a OHS Risk Assessment has been completed, workplace hazards have been identified, risks evaluated, and control measures are being implemented, there are certain costs that need to be considered. However, the costs of implementation of health & safety interventions must also be weighed against the benefits that they bring once implemented, especially considering long-term.
Costs and Benefits of Occupational Health and Safety Investments
As with all other investments, Occupational Health & Safety (OHS) investments will include a variety of costs, including that of intervention and costs or benefits that relate to the outcome of the intervention.
Intervention costs can be divided into two segments namely initial investments and recurring costs.
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These will include:
- Purchasing of new equipment and materials which relate to the OHS intervention or control measure.
- Costs for training, implementation, and adaptation.
- Maintenance and energy costs
- Yearly equipment maintenance, repair, and replacement.
- Training costs
Next, it is important to view the different benefits which can be divided into three groups of which two are monetary and the third is miscellaneous.
- These relate to more efficient working processes that result in additional production.
- Lower costs or less time spent by employees on certain tasks.
These relate specifically to adverse events which are prevented through OHS interventions and control measures that effectively control, manage, and reduce hazards and risks. These avoided costs relate to:
- Human – reduced productivity, absence, replacement, overtime, medical and rehabilitation costs.
- Organisational – which relates to time spent on investigations and discussions on the adverse event, the reorganisation of work and follow-up costs of administration as well as replacement.
- Potential side effects in a variety of enterprises that often involves equipment, the workplace, products, the repair, replacement, and the depreciation thereof, products as well as the environment.
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These are also crucial for consideration in the decision-making on OHS interventions, but these are often difficult to express in terms of monetary units. These include:
- Job satisfaction
- Corporate image
- Staff turnover
These factors are often not indicated in the ROI of the organisation, however, decisionmakers can still decide what they are willing to spend to accomplish these benefits.
Decision-making for Occupational Health and Safety Investments
A large portion of decisions regarding investments in a healthier and safer environment are taken at a company level. For this reason, the most crucial question relates to how decisionmakers in companies can be offered with the best information regarding the cost-effectiveness of OHS interventions.
It is imperative for the link between OHS and the business strategy of the organisation and its bottom line, to be established.
There are three ends of returns in OHS investment that can be made including improved health, the inherent value of greater security, and improved productivity. Even though there is no scientific evidence to prove the profitability of these effects, these views find significant support in organisations.
When deciding on investments, investment risks is the second variable that is considered following profitability and these two variables are inversely proportional. Risk increases with the ROI and typically, between two investments that have equal profitability, the more attractive investment is the one that has lower risk.
Reasons why organisations invest in OHS interventions include, but is not limited to:
- Understanding that health & safety are an integral part of being a ‘good business’.
- It helps the organisation maintain a good reputation.
- It helps the organisation achieve higher productivity.
- It ensures compliance with the law, Occupational Health and Safety Act 85 of 1993.
- It avoids expenses relating to accidents and incidents.
- It helps to contain insurance costs.
- It helps to meet the demands of the client.
- It helps in being a ‘good’ and compassionate employer.
How does SafetyWallet support its subscribers?
Through the assistance and support in the health and safety program of the subscriber, SafetyWallet helps subscribers with the health & safety risk assessments that must be conducted to ensure that subscribers are compliant in providing a healthy and safe working environment.
Click on the image below to find a SafetyWallet Solution that suits your business (Branch/Site specific) and get the 21 benefits along with the subscription:
Keeping your workplace legally Health and Safety Compliant may seem like a daunting task. At MAKROSAFE, we have an experienced team of OHS experts available to assist in keeping your company Health and Safety Compliant according to South African Occupational Health and Safety Act 85 of 1993 and Regulations.
The MAKROSAFE Health and Safety Risk Control Package will assist you with your Risk Management Programme.
By signing up with our Health and Safety Risk Control Package, MAKROSAFE will assist you with your Risk Management journey.
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