The quickest way to get your proposal shot down by a mining executive is focusing on soft costs.
So, when making the business case for safety, the ROI can’t be fluffy. Mining companies spend $100,000 to change a tire. Costs are high, margins are slim.
This new safety program reduces administrative time? That’s a soft cost. But, if we’re able to produce more gold or reduce the cost of production, that’s a hard cost.
When looking for a return on safety in the mining industry, here are some areas where you can see very real and very tangible savings.
Your safety record is part of your brand and your reputation. And bad reputations are expensive.
Let’s say you’re looking to dig in a new community. If you want the local government and community on your side, you better have a great safety record. Otherwise, people won’t want you there.
Now it’s time to secure your funding. You’re not going to get funding with a bad safety reputation. Or if you do, your interest rate will be higher because you’re a risky borrower.
The Cost of a Shut-Down
Continuing with the previous example, let’s say you’re trying to build the site and the community does not want you there because you have a bad name.
There’s a roadblock and your trucks can’t move. It can cost north of a million dollars a day for a medium site to stop working.
This causes a cascade of problems. Missed days lead to the team feeling rushed to make up for lost time. That’s when incidents and injuries occur.
High Turnover and Strained Recruiting
It’s a vicious circle.
You experience more workplace incidents, which means talk about safety problems will spread within your company and beyond. You lose employees who are worried about their safety. At the same time, you have a hard time recruiting, because top-level talent would rather work for a company that takes their safety seriously (in their eyes).
Now you’re paying more to recruit less-experienced employees, who are more likely to experience a workplace incident. And the cycle starts over from there.
The Real Impact of Safety on the Bottom Line
We’ve mainly focused on the negative impact of a bad safety culture, and the unexpected ways it can cause you to hemorrhage money. However, every one of those scenarios has a reverse outcome if you have a High Participation Safety Culture.
If you have a strong safety record, that’s the reputation that precedes you into an area you want to work in. The local community and government feel better about you.
At the same time, your safety reputation in the industry means you attract top-level talent, while you retain your current employees. On the simplest level, people want to work for you. They know you take their safety seriously.
We can show you other ways to find a tangible ROI on your safety budget. To learn more, click here to speak with one of our experts.