Save Your Business Money by Having a Safety Budget

The consequence of no budget is obvious. When a safety issue arises, it is often ‘out of the blue’ and unprepared companies end up digging into meagre profit margins to pay for them.

Safety Budgets work so effectively because someone has actually given some time and thought as to what safety issues, and therefore costs, will be relevant for different projects.

How can a business budget for Safety?

1. Review safety costs from similar projects.
o Make this easier by creating a ‘safety’ category for your accounts.

2. Do a Task Analysis on the project (before it is tendered!)
o The Task analysis predicts what hazards are and how they will be
controlled.
o The cost of controlling the hazards should be researched and budgeted at
this point.
o Get professional advice! A safety advisor or consultant can assist in
predicting safety pitfalls, and recommend efficient/effective means to
avoid or control them.

3. Understand what safety costs.
o Weigh the costs of owning versus leasing/renting safety equipment.
o Factor in the time of maintenance of the safety equipment.
o Factor in the time for training on the relevant safety equipment.

4. Amortise the cost of safety equipment that will be used on other projects.

5. Pass the costs on to the clients/consumers.

Steps 1-3 are effective accounting and business discipline techniques. Used consistently and reviewed regularly, these techniques will take the guess work out of the safety budget. It is true to say that guessing and hoping are not very effective business techniques.

External advice on safety can give your company a much more honest and effective focus for your budgeted safety money.

Steps 4 and 5 are Paradigm shifts for many companies, especially smaller contractors. The cost of safety, including safety equipment, needs to be a line item expense when calculating the tender/ manufacturing costs.

Example:
A project may require a contractor’s worker to come onto a construction site for 3 days. The site Personal Protective Equipment (PPE) requirements are: Hardhats, Hi-Viz vest, Safety Glasses, and Safety Shoes.

What is the cost to the employer?

Materials
Labour
PPE
Perhaps induction training time for the site
Company overhead
Administration
Payroll
Office
Vehicle
Communication
First Aid Equipment
Tools/Equipment
Tools/Equipment maintenance
Accident Insurance (private or Govt. imposed)
Employee training
Safety Induction courses
Training for equipment use
First Aid training

What is charged to the client?
Typically: Parts (Material)/Labour. The cost of “labour” is where the cost
of doing business is recouped.

The Safety costs are often unaccounted for and end up coming directly out of the company’s bottom line.

Especially the PPE! It seems unreasonable to charge out for the cost of a Hardhat, or a pair of safety glasses, when they will only be used on the site for a few days. So they don’t get charged out, and ‘hopefully’ the Labour rates will make up the difference.

Safety Equipment costs money. They are required by the clients and by law, and by common sense, to be used. The cost must be accounted for.

For the Hazardfree Safety Co-op (www.hazardfree.co.nz) I have been working on creating amortisation tables for the different costs for safety equipment.

The example above, (with hardhat, safety shoes, High Viz vest, and Safety glasses) could run a company around $240 NZD (foraverage retail prices)per employee. If the life span of the different items, (hardhat 3 years max etc.) it comes to $22NZD/month/employee.. The Hazardfree Safety Cooperative, with a typical 20% saving off of retail drops that to around $17.60 NZD for this example. That cost has to be accounted for somewhere even if you do get a good deal!

By budgeting for the cost of safety and then putting the costs back on to the client/consumer, safety gets paid for. By not budgeting for safety…The money comes out of the company purse…or worse yet gets sidelined or cut out of the programme completely...and these "little" expenses quietly eat up a large chunk of your profits.

That is why in New Zealand the largest profit margin is touted to be an appalling 3% on for commercial constuction projects.

Glen Omvig
All Practicable Steps (APS) Ltd
Hazard Free Safety Co-Op

News this morning

The budget in New Zealand is being released.

It makes me wonder what the New Zealand government is going to invest in Safety this year.

They ask ALL businesses to invest in Safety. As New Zealand's largest business, the Government, with an admitted Billion + $ surplus, is not investing one cent in Safety for all its collective workers...and I don't just mean Government workers.

Investment into ACC (Accident Compensation Insurance scheme) and OSH (Occupational Safety and Health) is not a direct investment in the safety of workers.

New Zealand and the rest of the world will see increased safety when they invest their money in the right places. Right now the investment in OSH and ACC is the ambulance and coroner at the bottom of the cliff. These services take care of people who fell off the cliff because of the lack of guard rail.

Investing in businesses, (that must provide Health and Safety jplans, strategies and equipment for their workers) is in place, but NOT supported or exemplified by the leaders who are forcing them to do it.

More schemes like the ACC rate reduction for Companies that have Auditable Health and Safety Systems need to be explored. Supplementing costs for PPE (Personal Protective Equipment) and Professional Health and Safety advice would significantly reduce the burden on New Zealand business, and the weight of debt burden from accidents.

It is time the Government put its money where its mouth is.

Safety Goggles can reduce eye injuries only if you wear them

SEE PRODUCTS
Many organisations world wide have become aware of their responsibilities to protect workers and visitors health at the work sites. Safety rules sometimes have the spirit right but the methods wrong.

Eye injuries are particularly worrisome as the injuries are almost by definition ‘serious harm’. In New Zealand at least, that requires a “must do something” approach to avoid that type of injury. Some factories have made it a safety rule that all workers, visitors, and contractors MUST wear safety glasses while on the factory floor, or doing work at the factory site.

What hasn’t been taken into account is the important difference between safety glasses, and safety goggles. Goggles are correctly considered to be safety glasses, yet safety glasses are not an appropriate substitute for safety goggles.

Safety glasses are effective for deflecting direct impact from ‘one off’ type of flying objects. E.g. appropriate for pulling Nails, working at a bench saw. Glasses in general, even the ‘wrap around’ type are not appropriate for ambient flying debris, such as very dusty conditions, or for reflective debris, like grinding.

I have observed the eye injury rates for a major construction company drop dramatically, (from one per month to 2 in one year) when workers were required to have their own safety glasses. The two eye injures reported were in conditions where goggles would have been more appropriate.

SEE PRODUCTS

There are many workers on site “feeling” safe, but not actually BEING safe because they are wearing safety glasses instead of appropriate safety goggles.

As with any type of personal protective equipment, the goggles need to be available and appropriate for the worker and task at hand. Fortunately there are many types of comfortable/ affordable goggles on the market. With a little effort, the tasks, and situations that require goggles can be identified, and the type of goggle to be assessed and supplied to the work site. Hazardfree Co-op in New Zealand has made great strides towards assisting workers and owners to gain access to more affordable safety equipment.

With some effort in this regard, eye injuries CAN be eliminated.

Hazardfree Co-op, (www.hazardfree.co.nz) was formed in Dec 2004, where members could enjoy up to 20% off of retail safety equipment. Suppliers include Haverstock Safety and Environmental, PBI Height Safety, and in New Zealand only, NZ safety.

SEE PRODUCTS

Glen Omvig
All Practicable Steps (APS) Ltd
Hazardfree Co-Op
http://www.hazardfree.co.nz

Cut the Cost of Safety Equipment in your Business NOW!

Hazard Free Safety Co-Op has just lowered the cost of doing business in New Zealand. This bright and bold new venture is already making waves in the Safety Community.

The cost of Safety Equipment for Business has Sky-Rocketed - making profits diminish in their wake. Large businesses have always had the advantage of bigger buying power, while those who really NEED the cheaper prices that bulk buying brings, are stuck with paying full price for all safety equipment.

This new venture has opened the door for small business owners to purchase at the same or lower prices than the Big Companies are currently getting.
We have three suppliers currently covering the whole spectrum of Safety Equipment, from Heights Safety Systems to hard hats and gloves and can supply the whole of New Zealand - North and South Islands.
Thousands of Dollars in some cases can be saved!

In this business, Client after Client has complained that Safety Equipment, and working safely was just too expensive - and a solution had to be found to lower the costs for the average business out there.
A heights rescue kit would be purchased for as much as $5000 - instead of the $800 -$1000 that larger businesses could purchase it for!
How often has a sub-contractor heard the words "you have to have this equipment - go and get it or don't work here!" - and been forced to buy immediately at full price? How often do major contractors, have headaches because sub-contractors can not afford the equipment required to work safely?

http://www.hazardfree.co.nz was born of this need, and is now gathering together suppliers to bring it to the business community in New Zealand firstly, and then the world!

At present there are discounts available at major Safety Equipment Suppliers both in Wellington and Auckland - at a level of 20% discount off the regular retail price...and if ordering from our Auckland supplier, you can have this safety equipment delivered directly to your site or workplace anywhere in New Zealand. Products are usually able to be delivered within 24-48 hours of ordering.

Our staff have just been trained on how to do electrical leads testing for business - and will be trialling a lead exchange programme so that when leads are due to be tested, we can replace them immediately and have no "down-time" to get this done.

We have decided to make membership free, in order to have as many people as possible benefit from these discounted business expenses, but it will not be free forever to be a part of this programme. This is an introductory promotion only.

And so, for 20% discount on major safety equipment (and not so major), and for the opportunity to be included and informed of any future discounts and services, the Hazard Free Safety Co-Op is now open for business.

For Further Information, please go to our website: http://www.hazardfree.co.nz, or Contact Glen Omvig, All Practicable Steps (APS) Ltd, mob 027-450-6028, or 04)2988533, email glen@hazardfree.co.nz

All Practicable Steps (APS) Ltd is the parent company which has launched the Hazard Free Safety Co-Op for Businesses in New Zealand. APS Ltd has been in business for two years now, serving the community with Health and Safety Advice and Training, and has moved to the next step of the Hazard Free Safety Co-Op because of the need seen in the workplace for cheaper Safety Equipment.