MAKE SAFETY PAY

A good PPE Program reduces costs, improves productivity, increases profitability and contributes to the success of the company. But only if it is a complete program, consisting of the highest quality products, and value added services, from a "partner" supplier.

Dr. Rick Fulwiler, President of Technology Leadership Associates, and former long time Director of Health & Safety Worldwide for The Procter & Gamble Company, pioneered the concept of "Making Safety The Business of The Business" years ago. Since that time, forward looking PPE manufacturers looked for ways to enhance their offerings so that they transcend the basic protection function to improve the bottom line.

It may be easy to see how wearing PPE can reduce injuries and injury costs at the basic level. But it is not as easy to connect PPE to increased productivity, increased profitability and the over all success of the business. To begin to make those links, you have to consider the numbers. Each year over the past five years, injury frequency (the number of injuries) and severity (how bad the injuries were) decreased slightly. However, the cost of those injuries increased significantly putting additional pressure on already reduced profit margins. Industry is spending between $4 and $5 billion on PPE yet it still is incurring about $177 billion in injury costs. Research shows that 60% of those injured were wearing PPE supplied by their employer but it proved to be inadequate or inappropriate for the hazards of the job.

Therefore, improving the PPE buying decision, upgrading to a leading brand of top quality PPE and partnering with a supplier that can provide significant value added services is the first step in reducing injury costs. The latest data available shows the estimated cost of injuries for 2007:

PPE cannot stop accidents from happening. Every time an accident occurs there is a range of possible outcomes from a "Near Hit" to a "Fatality". Quality PPE, carefully selected and properly worn will move the outcome down the Injury Cost Pyramid from a potential fatality to a visit to the dispensary. The estimated cost of a fatality is $1.3 million; a lost time injury $43,000; a visit to the nurse for First Aid about $1,000. Every time the cost of an injury is reduced or eliminated, the savings drops straight to the bottom line.

The latest data shows that the average employer (it varies by industry) has about 4 injuries a year per 100 workers with them equally split between lost time (involving days off the job) and non-lost time. That means a company with 100 employees will incur at least $102,000 in injury costs every year. For a company operating with an 8% net profit margin, the profit on their first $1,275,000 worth of sales would go to just pay for their annual injury costs. Reducing that cost should be the goal of a PPE Program, not reducing the purchase price of the PPE. If upgrading to a top quality brand of PPE reduces just one injury, or moves the cost of an injury down the cost pyramid, it will pay for the upgrade many times over. Plug in your actual numbers to estimate what you could save.

A problem is most employers don't capture the savings realized when PPE prevents or reduces the cost of an injury. We suggest that Safety Officials maintain a "Save" log. Every time there is an incident, record how much was saved between the actual cost and the potential cost. Every First Aid case was a potential fatality. Every time an accident occurs the only difference between a near hit and a fatality is the outcome.

Upgrading to a quality PPE Program also has an impact on Workers Comp premiums. Workers Comp premiums are experience based. To reduce your premiums, you must reduce your injury costs relative to the average for your industry. Those savings also drop straight to the bottom line.

The cost saving potential for a PPE Program is dramatic. And so is the revenue enhancement potential. Not nearly as well understood or as obvious as the cost savings, PPE revenue enhancement comes from reducing downtime (a major cost to most companies), increasing productivity, and enhancing the quality of work life for employees. In many companies, downtime is second only to injury costs as a profit drain. It costs industry more than $10 billion a year; robs the average plant of nearly $400,000.

Dissatisfaction with poorly designed, ill fitting, uncomfortable PPE often manifests in frequent breaks, absenteeism, and stress, all leading causes of downtime. But quality PPE that can be worn throughout a shift without hindering, distracting or fatiguing the wearer will reduce downtime. It is well documented that a comfortable, confident, well protected worker can stay on the job longer, concentrate better, produce more with fewer rejects, reworks, defects or delays.

In today's lean workforce, each worker is incrementally more important. If one is injured, and misses time (the median time off for a lost time injury is 7 days), the productivity of the entire plant can be adversely affected.

PPE has a tremendous impact on the quality of work life which also affects productivity. Workers need to be confident that they will return home at the end of the day free of injury. They want to know that the company is doing everything possible to protect them and help them do their jobs to the best of their ability. Nothing says that better than providing only the very best PPE for the workforce. Each time an employee puts on his or her PPE it represents the companies commitment to his or her personal safety and productivity. An astronaut was once asked "are you afraid to be hurtled into space?". He replied "the only thing I am afraid of is being hurtled into space on 40,000 parts that all came from the lowest bidder!". Employees feel the same way about their PPE.

PPE's contribution to reducing downtime, increasing productivity, and improving the quality of work life directly increases profitability and the success of the business. Finally, don't over look the "opportunity" costs (the cost of not doing something). Each day you delay in upgrading your PPE Program, you miss the opportunity to reduce costs and improve profitability. "Make Safety Pay". Capture, document and communicate the contribution of your PPE Program to the success of your business.

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The data presented is based on aggregate estimates provided by The National Safety Council, The Bureau of Labor Statistics, The Liberty Mutual Insurance Company and various other sources. They are estimates and should not be taken as absolutes. For the best results plug your data into the framework presented here.