Best Practices
Selling Safety to Management
M ost professionals who choose
to work in the SH&E field do
so because they care about people,
not because they enjoy justifying
their safety and health programs to
senior management. But unless your
company has unlimited resources, at
some point you will have to explain
why the SH&E budget should be in-
creased, or why it should not be cut.
People vs. Profit
There are two sides to consider
with any safety and health program:
the people side and the profit side. At
times, the SH&E professional may feel
that senior management places profits
above people. Perhaps they balk at the
thought of a day spent in safety train-
ing or decline a request to purchase a
lifesaving product because it is not yet
OSHA-mandated. As frustrating as this
can be, it does not mean management
cares less about people than money.
Blame the human brain, which is wired
for optimism (Boyle, 2011).
When something bad happens to
another person, most people do not
realistically evaluate the chance of
the same thing happening to them.
Instead, people think, “That won’t hap-
pen to me/my family/my company.”
Without the tendency toward optimism
we might never be able to step out-
side of the house for fear of all the bad
things that could happen. But this can
make an SH&E professional’s job dif-
ficult. How does one convince a person
to invest in safety and health when his/
her brain is not designed to realistically
evaluate the chance of an incident hap-
pening on the job?
There is no definitive answer, but this
article presents four tactics to consider
when trying to “sell” a safety and
health program to management.
1) Review Company Safety & Health Policy
Those in management know the
company’s safety and health policy.
They may have even helped create it, so
the policy should be at the front of their
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minds during any discussion regarding
safety and health. If the company has
set a goal of zero incidents, zero fatali-
ties, zero injuries or the like, mention it.
It will unite everyone with a common
goal from the start.
2) Share Company Incident Stories
When listening to stories about
incidents that happened at one’s own
company, it is hard to think, “That
won’t happen at my company.” Stories
can involve injuries, near hits or even
feedback from workers. The important
thing is to bring the discussion down to
the human level. How has an incident
affected a worker, his/her family and co-
workers? Do people feel safe on the job
site or are they asking for more support?
3) Run the Numbers
In the U.S., Canada and other devel-
oped nations, workplace fatalities are no
longer considered just a cost of doing
business, but that does not mean cost
is not a concern. Most managers spend
the bulk of their time trying to increase
the profitability of their companies by
4% to 8%. By tying the conversation
back to profits, the SH&E professional
will be speaking their language. As a
whole, companies exist to make money;
the lower their costs, the higher their
profits. So, how do they determine what
is worth spending money on when it
comes to safety and health?
Unfortunately, this decision often
comes down to a matter of OSHA
compliance. Although the agency has
been highly effective since it was cre-
ated in 1971, regulations take years to
create and approve and, thus, may not
include new products, processes or
technologies that will improve worker
safety and health.
If the company is not already ahead
of the curve, the best way to change
compliance-centric thinking is to run
the numbers. Safety programs cost
money, but they save money too—
www.asse.org
By Max Baker
money that might otherwise be spent
on higher insurance premiums, paying
injured workers for lost time or training
replacement employees. Following is a
calculation that can be used to estimate
the costs of injuries, as well as a discus-
sion of how to approximate the amount
of money a safety program may save.
A) Calculating Injury Costs
The total costs of an injury include
both direct costs (e.g., workers’ com-
pensation, project shutdown) and indi-
rect costs (e.g., injury-related overtime
costs, administrative costs spent on
paperwork).
If a company-specific average direct
costs figure exists, use it in the calcula-
tion. Otherwise, look for an average
direct costs number specific to the
industry or, if it makes sense, use the
direct costs of a specific injury type. The
latter would be useful in justifying the
cost of a product designed to prevent
a specific injury or illness, such as heat
prostration. The direct costs of specific
injuries can be found using OSHA’s
(2014) $afety Pays estimator.
Follow this example using 2011 NSC
(2014) data, which places the direct
cost of a medically consulted injury at
$39,000. The indirect costs of injuries
vary widely, but are estimated at 1 to
20 times the direct costs (ASSE, 2002).
Incidents with lower direct costs have a
higher ratio of indirect costs. For direct
costs of $10,000 or more, the OSHA
tool conservatively estimates indirect
costs at 1.1 times the direct costs. Using
the NSC’s direct costs of a medically
consulted injury ($39,000), the indirect
costs would be $42,900. That puts the
total costs of an injury at $81,900.
How likely is it that a medically con-
sulted injury will occur on a company
job site? This can be calculated using
the company’s nonfatal incidence rate.
Across all industries, the average inci-
dence rate for total recordable cases of
nonfatal occupational injuries and ill-
nesses is 3.7 per 100 full-time workers.
Now, take the number of total full-
time workers on a given team and
calculate what injuries are expected to
cost the company per year. Consider a
fictional company, ABC Co., with 125
employees and use the costs/incidence
rate above to calculate a total. Use as
much company-specific data as pos-
sible in the calculation (Table 1, p. 68).
OCTOBER 2014 ProfessionalSafety 67
 Table 1
ABC Co.
A) Direct injury costs $39,000
B) Indirect injury costs $42,900
(A*1.1)
C) Total injury costs (A+B) $81,900
D) No. of workers on team 125
E) Incidence rate 3.7
F) Likelihood of injury 3.7%
(E/100)
G) No. of expected injuries 4.625
(D*F)
H) Total costs of expected $378,787.50
injuries per year (C*G)
Table 2
ABC Co.
I) Total costs of expected $378,787.50
injuries (H)
J) Profit margin 6.55%
K) Additional revenue: $5,783,015.27
All injuries (I/J)
L) Additional revenue: $1,250,381.68
One injury (K/G)
This example results in total costs of
nearly $380,000 per year with only 125
employees—a substantial amount on
its own. But how much additional rev-
enue would the company need to earn
to offset these costs? To find out, divide
the total costs of expected injuries by
the company’s profit margin. Using
6.55%, the average S&P 500 profit
margin from 1998 to 2013, nearly $5.9
million in additional annual revenue
would be needed to cover the costs of
all the injuries, or more than $1.25 mil-
lion to cover the costs of a single injury
in the example from Table 1 (Table 2)
(Staples, 2013).
Note that potential legal costs, OSHA
fines, increases to insurance premiums
and fatality costs are not included, nor
are the immeasurable emotional and
physical costs to injured employees,
their families and coworkers.
B) Calculating Program Savings
One reason campaigning for a safety
and health program is difficult is that
businesses work in numbers: revenue,
profits, margins, return on investment
(ROI). But one cannot quantify an inci-
dent not occurring. The best one can do Max Baker is CEO of ILLUMAGEAR, whose mission is to illuminate people working in high-risk
is to compare the company to others in environments, making them safer with innovative products. Baker is passionate about job site
the industry. safety. Contact him at max@illumagear.com to continue this discussion or find him on LinkedIn.
68 ProfessionalSafety OCTOBER 2014 www.asse.org
Table 3
ABC Co. vs. XYZ Co.
M) Number of workers on team
N) Incidence rate
O) Likelihood of an injury (N/100)
P) Number of expected injuries (M*O)
Q) Injuries avoided
R) Savings from injuries avoided (C*Q)
S) Additional revenue not required to cover injury
costs (R/J)
To do so, multiply the industry inci-
dence rate (available via www.bls
.gov) by the number of workers on a
team, and divide the result by 100 (BLS,
2012). This calculates how many inju-
ries the average company of that size
in that industry should expect per year.
Subtract the number of actual injuries
at the company. The difference repre-
sents the number of injuries (in theory)
prevented by the company’s safety and
health program. The amount of money
saved can also be calculated, as can the
amount of revenue that would have
been needed to cover these costs.
Since the example in Table 2 repre-
sents a nationwide average that includes
all industries, let’s create another fiction-
al company, XYZ Co., with 125 employ-
ees, the same 6.55% profit margin and
an incidence rate of 3.6—just slightly
below the average for all industries. XYZ
Co. can expect 4.5 injuries per year (125
x 3.5%). Although this is only 0.0125
below the industry average, it equates to
$10,237.50 in incident savings ($81,900 x
0.125), or more than $156,000 of banked
revenue (Table 3).
Measure, Measure, Measure
Measure everything possible go-
ing forward so it can be used in future
program evaluations. This includes the
money spent on safety, near hits and
incidents within the company or con-
tractors. The more data available to back
up claims, the easier this part will be.
Your boss likely must justify the budget
to his/her superiors, and the more tools
you can provide, the more likely s/he is
to campaign on your behalf.
Sometimes it is tough for a safety and
health program to get the attention and
ABC Co. (avg.) XYZ Co.
125 125
3.7 3.6
3.7% 3.6%
4.625 4.5
- 0.125
- $10,237.50
- $156,297.71
priority it deserves, but the program is
essential when it comes to protecting
the company’s most valuable asset, its
employees. Selling the program may
be easier when using the steps outlined
to show management that, in addi-
tion to reducing injuries and fatalities,
the safety and health program may
improve the company’s bottom line.
That’s a win-win for your company.
References
ASSE. (2002, June 8). The return on
investment for safety, health and environ-
mental (SH&E) management programs
(White paper). Retrieved from www.asse
.org/practicespecialties/bosc/bosc_article
_6.php
Boyle, R. (2011, Oct. 10). Optimism
is a brain defect, according to functional
MRI scans. Popular Science. Retrieved from
www.popsci.com/science/article/2011-10/
biased-brains-help-humans-always-look
-bright-side-life
Bureau of Labor Statistics (BLS).
(2012). Occupational injuries and illnesses.
Table 1: Incidence rates of nonfatal occupa-
tional injuries and illnesses by industry and
case types, 2012. Retrieved from www.bls
.gov/iif/oshwc/osh/os/ostb3581.pdf
NSC. (2014). Injury facts, 2014 edition.
Itasca, IL: Author.
OSHA. (2014). Estimated costs of occu-
pational injuries and illnesses and esti-
mated impact on a company’s profitability
worksheet. OSHA’s $afety Pays program.
Retrieved from www.osha.gov/dcsp/small
business/safetypays/estimator.html
Staples Facility Solutions. (2013, Aug.).
Putting employee safety first can improve
your bottom line (White paper). Retrieved
from www.vista-training.com/wp-blog/
wp-content/uploads/2013/10/economics
-employee-safety.pdf
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