In April and May of 2018, we’ve seen countries across the world reach 3 and 4-year highs on oil prices.
How did we get here?
We’re seeing an increase in demand from China, India, Japan and South Korea, while supply is being limited by Saudi Arabia and Russia. These economic forces, combined with geopolitical events like President Trump withdrawing from the Iran Nuclear deal, have put upward pressure on prices.
To the average person, this simply means it will cost more to fill their car. But for companies in the oil and energy sector, this presents an amazing opportunity for growth, which requires an investment to improve their safety culture.
The ROI of Safety
Over the last five years, safety has become a much bigger part of the procurement process. As a result, companies with less than stellar safety records soon find themselves losing bids and missing out on potentially massive opportunities.
Safety has officially become a competitive advantage. An elite safety rating ensures the doors to elite contracts don’t suddenly slam shut.
It’s Time to Act
For safety leaders who may have been waiting for the opportune moment, this is a perfect time to have important and actionable conversations with your CEO about safety. Now is the time to make the case for how crucial safety is to the growth of the organization, as energy prices rise, and more investment goes into the industry.
Or, it’s time for CEOs to empower safety leaders. This doesn’t simply mean allocating more budget to safety. A CEO needs to make a public commitment towards safety and make the leader the “face” of this new pledge. Safety leaders need more than money. They need a seat at the decision-making table; right next to marketing, sales, and operations.
This is also the perfect time to talk to your front-line employees. Old habits and safety shortcuts on job sites may be difficult behaviors to break. The best way to get buy-in from the front-lines is to be fully transparent about the economics of safety.
It’s important for employees to know if they make safety a part of their every-day-mindset, the company’s safety record will improve. And a better record means more work and more growth for the company, which translates into job security for the front-line.
What Happens if You Wait
If you’re not losing money to a sub-par safety record right now, you will very soon.
Building a better safety culture takes time; in some cases, months or years. This means if you invest in safety today, you’re going to be in better shape 12 months from now. You will be in a better position if energy prices drop again, and you find yourself having to run a leaner and more efficient operation.
As oil prices go up, energy companies begin investing in people, processes, and systems. When this is the case, make sure that one of your key investments is safety. Because if you don’t, you might find yourself missing the perfect opportunity to protect both your employees and your financial future.