The Impact of a Strong Safety Culture on Your Income Statement

Culture influences every aspect of your organization’s operations – from its policies and procedures to how motivated and trained its employees are. Management priorities and daily norms are fed by it.

Having a strong, unified culture plays a major role in achieving business goals and improving overall performance. However, having the right culture is just as important as having a strong one. A strong safety culture means that everyone (from upper management to front-line workers) engages in safety and commits to actively prioritizing it.

While most C-level executives understand the importance of safety for employee well-being, they often prioritize more obvious performance indicators like growth, efficiency, and revenue. This can lead to misaligned goals and unsafe practices. What they fail to realize is that safety has a direct and quantifiable impact on the bottom line, and culture significantly affects safety.

So, how does a safety-first culture lead to financial success?

1) Strong Safety Culture →  Fewer Incidents → Higher Profits

When safety is integrated into everything your company does, its incident rates (and associated costs) decrease. Injuries don’t just result in worker compensation costs, but also bring on indirect expenses like government fines, lost profits, and incident investigation costs. The Ontario Ministry of Labour estimates that the average cost to an employer for each workplace injury exceeds $100,000.

The good news is that a strong safety culture can be used as a tool to mitigate these costs. Organizations that invest in fostering a participation-based safety culture have injury rates that are 70% below the industry average. This leads to a safer workforce and can amount to millions of dollars in overall savings each year.

2) Strong Safety Culture → Better Talent Retention → Higher Profits

Each year, U.S. companies spend over $11 billion on employee turnover. Once hiring, onboarding, training, and lost time is accounted for, the cost per churned worker is over $15, 000. With only 11% of workers leaving for more money, culture has a major influence on employee retention. Simply put, employees are much more likely to stay with a company that they feel cares about them and recognizes their hard work.

Unfortunately, it is common for managers to only discuss safety after an incident occurs – when it’s too late. This leads to less employee engagement and low morale. A strong safety culture rewards preventative behaviour and provides employees with constant feedback. It is important to create an atmosphere that balances negative consequences with positive rewards. When employee voices are heard and a 2-way flow of communication exists, your organization can better attract and retain high-quality talent.

3) Strong Safety Culture →  Greater Growth Opportunity → Higher Profits

A good safety record is a competitive advantage for your organization. Accidents bring on bad publicity, making it harder to win new business. When an RFP is issued, your company’s safety record will make or break its bid. Lost opportunities will stunt your company’s growth and take millions off its income statement. A strong safety culture paves the way towards certifications like COR and ISO 45001, placing your organization above the competition and opening the door to new customers.

Safety touches every department, task, and person in an organization. Companies are more profitable and successful when their safety culture is strong and continuously improving. eCompliance customers see an average increase of 90% in worker participation within the first 12 months, which further strengthens their safety culture and performance.

Learn More About Safety Culture

To learn more about how you can improve your safety culture, check out our recent webinar with safety expert Bryan McWhorter and the team at Safeopedia.