Safety directly and significantly benefits the bottom line.

Liberty Mutual's 2017 Workplace Safety Index reported the top 10 causes of the most serious workplace injuries cost employers almost $60 billion in direct costs (medical and lost wage payments). That impact is even greater when the indirect costs, like lost productivity and overtime, are included.

So creating and maintaining a safe work environment should be a top concern of insurance buyers, and the brokers and agents who support them. By understanding the five best practices common to great safety programs, these groups can partner with insurers to harness the full benefits of a safe workplace.

Before delving into that value and ways to improve it, however, it's helpful to briefly define two terms central to any discussion about this topic: Safety Culture and Safety Climate.

  1. Safety Culture is the collective behavior of employees. It's difficult to measure, hard to influence and slow to change.

  2. Safety Climate is employees' perception of management's commitment to, and support of, safety. It's far easier to measure and therefore can help drive changes in employee behavior, both at the individual and collective level.

Related: 10 ways to reduce slips, trips and falls in your business

The carrots of workplace safety

The importance of workplace safety goes beyond the bottom-line impact of preventing the costs associated with workers' compensation, general liability and other commercial insurance claims.

Workplace safety also provides companies with powerful competitive advantages, from delivering quality projects on time and budget, to attracting and retaining employees in a tight labor market.Further, improving workplace safety often helps companies address other key challenges. Finally, developing and sustaining a safe workplace is fundamentally the right thing to do. It unites the interests of employees, management, the public, shareholders and regulators.

The keys to delivering those carrots

How can a company improve its workplace safety? By implementing the five best practices common to firms with the best safety records:

  • Vocal senior management. Top leadership must continuously show its commitment to safety as a core company strategy. Nothing erodes a company's safety climate faster than when employees get mixed messages from senior management: Safety is paramount, but there are no excuses for delivering a project late.

  • Act based on data. The best companies base their safety programs on a clear understanding of their current safety performance, the types of accidents driving losses at the company, the impact of those accidents on the company and employees, employee perceptions of management's commitment to safety, and the special safety issues unique to the firm and its industry.

  • Involve all employees. Employees at all levels are included in developing, monitoring and refining the company's safety program. Frontline employees are key to improving performance. They know firsthand how to work safely, and why policies are sometimes not followed. In addition, involving this group gains their buy-in to new policies and work streams.

  • Regularly track and report performance. After your company has created its safety program, set key goals and identified benchmarks, you should now measure progress against those. Shout the results — good or bad — throughout the organization. Timely and honest reporting helps reinforce management's support of safety.

  • Rinse and repeat. Safety is a continuous process. Don't stop at reporting results. Learn from them. Bring together teams throughout the company to discuss ways to refine the program to strengthen performance. Relax. You've been through this step before. How can you do an even better job?

Related:

Jeff Duncan is the chief underwriting officer of the area of Liberty Mutual that provides primary commercial insurance coverages and services to healthcare accounts through brokers. Jeff can be reached at jeffreyb.duncan@libertymutual.com.

Julie M. Thompson is a lead risk control consultant helping companies improve safety.  She can be reached at julie.thompson@libertymutual.com.

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