How to account safety assets, not safety costs

Where safety is placed in your management system, and where safety is accounted on your budget, determine part of your corporate safety culture and profit.

Ask your accountant where the forklift truck is on the business balance sheet. It is probably accounted as an asset. Now ask your accountant where your forklift driver, who controls the asset, sis on the budget sheet. The driver is usually accounted as a cost.

When times are tough some organistions may consider reducing or parking off some forklifts, but we do not often see maintenance being reduced. It has been done, but those businesses pay an expensive price down the road. Bad maintenance was a key cause of the Longford gas disaster, and many others.

What about the people though? The most significant programs in a workplace are the safety programs! You would expect a safety man to say that, but I am also a recognised safety psychologist. I am focused on evidence-based practice.

The published evidence is that the Return on Investment (ROI) from safety interventions, is on average 7 to 1. For every currency unit you get a 700% return. Employers should queue up to invest in safety!

Yet, when times are tough the evidence is that we cut corners at one of the most culturally important aspects of our businesses, and workers notice.

I have become aware of a workplace in a toxic industrial culture where the highly qualified safety director is departing, to be replaced by a less qualified applicant. The key input into safety is budget, and here is it being reduced.

Some years ago I was asked to present the keynote address to the safety stream of the World Engineering Congress. Six weeks before the event the conveners told us that the safety stream of the congress had been cancelled, a casualty of the financial crisis.

Only the safety stream had been cancelled. What message did that send to the workforce and engineering managers.

Safety is de-prioritised and negotiable

Employers are all making noises about zero injury (that’s another discussion). They are always saying that safe behaviour in the workplace in non-negotiable, yet the evidence is that the priority of safety is regularly de-prioritised based on external influences.

I was impressed to see a communication from within an organisation recently in which the senior leader expressed the view that the business was heading for some tough times and people needed to start looking at their costs.

What impressed me was the comment that said safety was to be excluded from this cost cutting drive. Regretfully even this position was reviewed under continuing pressure to cut, cut, cut.

Why don’t we learn. It is never the person who made or promoted obsessive cost reduction who is sacrificed to this false ethic.

Safety is not a cost, but an asset

A business case should be made as to why safety budgets should be cut. A full SWOT analysis should be presented. The question of cost should not be a part of the SWOT analysis at this point. Of course it may have to be later. The initial focus should be on value.

When organisations get into cutting mode they often become like a herd of lemmings, so blindly focused on EBIT and supposed savings that they don’t see the cliff until it is too late and they hurtle headlong over the safety asset edge.

Now let me come back to the forklift. Where is the driver accounted? Why do we see programs to support safety behaviour and practices as things to cut? Because they are a cost?

Sadly this is a quicksand that many fall into. The scientific evidence is highly paradoxical. As with quicksand, by the time you realise you are in it, it may be too late to get back up the asset cliff.

Your safety programs are the most valuable intervention that you have, in the most valuable asset, people. Teaching SAP or Excel could add productivity, but it could not compete with a 700% return on safety training, equipment and culture investment.

Safety is an investment at a level of corporate culture that is unparalelled.  See the reviews of the Gulf of Mexico and Pike River (New Zealand) disasters to know that to be true.

• This blog is an extract of a Second on Safety circular of December 2012. David G Broadbent is a safety psychologist and founder of

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