Measuring Safety
There is a colossal clash between safety and production that has plagued businesses in a multitude of industries for decades. In most cases, this becomes some sort of a civil war, if you will, between the two departments. In one hand, we have the Safety Manager asking for monies and a tremendous amount of resources to train and equip personnel. In the other hand, we have the GM that is driving operations at the highest production rate possible to increase profits. Doing so leaves little time to pay personnel to train and purchase protective equipment, which ultimately narrows his profit margin. Despite which ever side you fight for, a safety program can make or break your company. Allow me to explain.
More than ever, clients are becoming aware of the associated risks of hiring companies that carry high injury rates and or high frequency OSHA citations. Companies are being required to submit safety pre-qualifications which ultimately determine your fate as to whether your able to work for that client or not. Clients will look at three key markers within your statistics.
The first is known as your Total Recoradable Incident Rate (TRIR). This is based on a simple calculation (Total Number of Injuries x 200,000 / total man hours). Consider this number a balancing act. Obviously we are looking for zero injuries in a year. However, in the event you would have injuries, you could essentially offset your injuries by yielding a high total number of man hours for the year. Every client could have a various target TRIR they want their companies to be under.
The second marker clients look at is your Lost Time Incident Rate (LTIR). The same principle applies as your TRIR, but this calculation is based only on the injuries that resulted in lost time. If you are yielding a high number here, then a client can conclude your injuries are more severe and ultimately causing a worker to lose work more often than not. Another similar marker a client may assess is your Severity Rate. This takes the LTIR a step further and takes the amount of days lost due to injuries as part of the equation.
The third marker is known as your Experience Modifier Rate (EMR). This is primarily used by insurance companies to assess premiums. The importance of this number lies in how the insurance companies calculate this number. Your EMR is based on past associated claim costs and projected future risks. This is where your safety history plays a vital role in what EMR you yield. The industry standard is 1.0. Any company with an EMR over 1.0 will most likely not qualify for work. Some larger companies will use a tactic where they utilize various affiliate companies within their ownership to create what is known as an Interstate EMR. Essentially, this allows a company to "tip the scale" in their favor. Some states offer an "EM Cap" program that allows a company to show a .99 EMR, which in turn keeps the company under the standard when attempting to qualify for work.
Now you know the quick and dirty of what clients are looking for in your safety history. So how does that affect your business? I mentioned earlier that the GM doesn't want to spend the money on equipment or personnel wages for training hours. A poor safety history will ultimately express how your company operates and potentially cause large loses in revenue due the inability to qualify for work. Personnel constantly require training (example: new hire, refresher, task specific, etc) to keep their mind and skill sets sharp. Job tasks are evolving on a daily basis and must be assessed and in doing so, new equipment will most likely need to be purchased. I promise you, that if you foster your safety programs, your production will increase! Ultimately increasing your profits!
Safety is a living thing. It must evolve on a constant basis in order to thrive. Almost every policy or procedure was created and/or altered in order to offset an incident or occurrence that resulted in a negative outcome. So, how do we evolve? In order to foster the thought process and communication between everyone, the message must be conveyed that we must be proactive and not always reactive. A successful safety program will not be derived on the purpose of prosecuting people, but offer the opportunity to manifest a safety culture that can be communicated across multiple industries. A safety culture that can constantly evolve.
Be great and stay safe.
-DM