How to demonstrate the return on safety to C-level executives

Mallory Hendry  00:00:00

Hello everyone, and thanks for joining us today. I'm Mallory Hendry, Content Specialist Manager here at Canadian Occupational Safety and I'm pleased to introduce today's webinar, How to demonstrate the return on safety to C level executives. Today you'll be hearing from health and safety experts, Robyn Asher and Lorena Espin, Technical Standards Manager and Account Manager, respectively. At Alchemist Safe Contractor, the panelists will explain how to measure the impact of health and safety investments and then critically, how to effectively present those findings to leadership ensuring that safety remains a priority in your organization. At the end of the presentation, Robyn and Lorena will participate in a question and answer period, so be sure to type any questions that you may have into the Q and A box within the webinar software, as we will get to those later on, I'll turn things over now to our panelists to begin the presentation. So take it away, Robyn.

Robyn Asher  00:00:57

Thanks everyone for showing up. We appreciate it to listen to what we have to say. What we want to talk about, basically, is communicating the strategy, strategies that are important for health and safety in your business, looking at measuring and quantifying the impacts of the health and safety investment on your organization. Also engaging and exciting the senior leadership about the value of investing in health and safety initiatives. We know that can be a challenge, and that's what we want to try and help you with, developing a business case for health and safety, looking at investments and how they align with the overarching business goals. These are things that are important to your executives and our program that we have at Alchemist isn't just a platform, and Lorena is going to tell you just a tiny bit about that before we get into the meat of our conversation.

Lorena Espin  00:01:53

Thank you, Robin. I just want to tell everybody I'm getting over a cold, so if I have to mute myself to cough, I very much apologize for that. So at Alchemist Safe Contractor like Robyn said, we are more than just a platform. We're more than just a technology. We have a whole team of support there to back you up, including our health and safety professionals who actually assessed, assess the contractors that you hire to come on site. So we take your health and safety programs that you already have in place, that you and your team have already worked very hard on, and we don't just rip and replace we actually help you improve on what you already have. So we help identify some of the gaps that you have, and we help you enhance your health and safety programs.

Robyn Asher  00:02:44

It's kind of like unlocking a smarter way to do contractor management is really what we try to do. So as far as you know, talking about organizational challenges and leading into how we identify these in order to talk to senior level executives regarding health and safety, you want to look at sort of what are the challenges that you have. And every operation has different financial or operational challenges that are unique to you as an organization. You could have very complex processes. You could have multiple locations, and in those multiple locations you could have different uncontrolled environments where you have to have a specialized things happen within your processes in those locations, which is going to be unique to you. So those are the things you want to identify. You could be an organization that's fast growing. So you may be small now, but you're growing at an incredible rate, which is really good for you, but it also poses challenges on how you're going to manage that growth when it comes to health and safety or or even coming to contracts, and how you're going to get more contracts. How are you going to get more business, you could have an immature safety program or an immature health and safety management system that you're really trying to increase and get to a better, mature level as you grow as an organization. Those small organizations also have their own challenges. They may want to remain small. They may be even just only a couple of people or a few people. You don't want to have to be able to jump through multiple hoops just to get contracts. So you want to be able to scale, scale your process to to fit your organization. Okay, you could have the lack of resources. And I'm not just talking about financial resources, you could be talking about professional resources. Do you understand your rules, sorry, your responsibilities in health and safety? Do you understand the legalities of it? Do you have to reach out to a third party? Do you have to hire within you know? There's always different kind of resources that you could be lacking. It could even just lack. It could be just a lack of training. Where to get that training? How do you get it? What training? So those are all the different challenges that an organization will have to face in order to get all that information into one spot so that you can actually present where your gaps are, how to fill the gaps, and what you need from your leadership to fill those gaps. Well, why do you want to do this? So we all know that there's stats out there for everything but couple of different stats there are, is contractors have a higher risk of incidents by 3% now this was done by an independent analysis of varidex, where they've got this information to show that permanent workers within an organization have a lower risk and contractors have that higher risk of 3% higher. From some data that we got from the Allied association of the Workers Compensation Board of Canada showed that 993 workplace facilities were reported in 2022 there was over 300,000 accepted claims for lost time due to injury and illness. That all relates to cost. So fewer claims is going to be lower cost. Okay, so happier workers. When you have a safe workplace, you're going to increase the morale of your staff. You're going to increase retention, which is going to also save you money. Rehiring, retraining is all very expensive. You also have a brand reputation to uphold. You want that commitment out there so that clients will look at you and say, I want to hire those people, because I know if I hire that contractor, I have a lower risk, which means it saves them time and money as well. So if you present this information in a business or look at the business side of it, that's the attention grabber you're going to get from from your senior leadership team, Lorena is going to tell you a lot more about that. Now, obviously, protecting lives is one of the ones, and preventing injuries should be first and foremost what we want to do as an organization. So keeping that goal in mind, you really want to present these this information, though, to your senior leadership with the business and the data to back up your information. That's the attention grabber that you're going to have. Lorraine, I'm sure you're going to add more to that, but that's kind of Thank you, my spot in that. Anyway,

Lorena Espin  00:07:53

Thank you, Robin, and these are all great points. Now, of course, Robyn understands, and I understand that health and safety is very important. All of us at safe contractor understand, and of course, you understand. But how can we get your boss to see health and safety initiatives, or health and safety as a whole, the same way that we do? It can sometimes be difficult to make a compelling case to your boss and get the backing and endorsement that you need to put health and safety programs in place and then ensure that they run smoothly. You might have approached your boss about this before, and they might have said, Oh, you know, just work harder. I deal with business people all the time, and I understand that to get their support, it is important to understand how a C suite executive thinks and talk to them about the things that they care about. So in order to talk to them about health and safety in a way that they will pay attention, we need to first understand how they view health and safety. So first, they might perceive health and safety as something that comes at a very high upfront cost but won't necessarily yield a return on investment. More importantly, it won't necessarily yield an immediate return on investment, especially if you compare it to revenue generating initiatives. They might see the cost of implementing something as safety protocols, proper equipment and proper training programs in place as all things that will cost them money. It won't bring in money like other initiatives will, especially if they haven't had a recent safety incident. So they really have kind of this short term focus or view when they think about health and safety. But we can't necessarily blame them. I mean, I think we all kind of tend to have that view when we when we think of putting certain programs like this in place. For example, if I think to my real life, when I think about car and. Assurance. It's not necessarily that I want something that I want to think about. It's not necessarily something that I want to pay into every month, but in the event that something were to happen, I think I'll definitely be happy to have to have it. And that's ultimately why our clients choose to stay with us year over year, because they are happy to have that peace of mind and that extra support of industry experts who help them further vet the contractors that they hired to come on site. Another way that they might view health and safety is that they might underestimate the risks of workplace accidents and assume that whatever safety measure they already have in place is enough, so they might not see the long term benefits that come with putting a rigorous health and safety program in place and taking all the necessary steps to make sure that it's running. Because again, they might not understand the long term benefits, and they might see it as not a strategic priority, but something that they kind of just have to do and have to do. So they'll kind of just meet the bare minimum. But in reality, if we can get them to see that if they invest in health and safety initiatives and health and safety systems, it will come as a benefit. Some of the benefits include reduced legal liabilities, lower insurance premiums, improved employee retention. And I think that's certainly something that they will care about, because these are all things that will affect their bottom line. We'll talk about this in a little bit more detail later on. But finally, another way that they might view health and safety is that it's something that might be lower down on their priority list, again, if it's competing with things that will generate revenue. For example, C suite executives might prefer to allocate their resources somewhere else. Some were more alluring, like technology, product development, market expansion, all things that it's a lot easier for them to see the return on investment and the benefits that come with investing in these initiatives. So they might feel that they want to focus on areas where they will direct, that will direct their growth, that will directly impact their growth and profitability. So now that we understand how they perceive health and safety, how can we present it to them in a way that will make it more compelling, more alluring to them? How can we get them on board? We have to reframe the conversation and reposition health and safety programs such as contractor management in a way that will get your boss's attention. These three pillars that you see on your screen are things that every C suite executive thinks about. So it's important to put health and safety discussions in the context of these three pillars, to make them care first. There's the moral imperative. So maybe fewer executives will care about this, but certainly there will be some that do. Every company has a responsibility to make sure that when they hire someone to work on their site, they are providing that worker with a safe work environment, regardless of that contractor's background, education responsibilities, everybody that comes on site needs to have a safe work environment with minimal risk of injury or harm at the end of the day. It's about making sure that everybody goes home safely at the end of the day. Another pillar that they might think about a little bit more is the legal imperative. So Bill 251 stipulates that any company and all representatives that work for that company is legally required to ensure that they have documented and socialized policies and procedures related to training and safe working environments in place. We recently published a blog about this on our website around this topic. We're going to share it with you in the chat if you'd like to go and check it out. So maybe your boss or the C suite executives at your company care about the last points that we talked about a little bit less. But what are they really going to care about? They are all absolutely going to care about business continuity. So while health and safety initiatives, as we've seen, can be perceived as a set of regulatory requirements, as something that they have to do, they do also present opportunities for significant financial and operational benefits for sustainable business continuity, and if we can show your boss that, then they are definitely going to care. On the next slide, I'm going to talk about these benefits in more detail, so that you can start building your arguments and go back to your boss and make them pay attention. So there's a lot of great points a. In this slide that can help you build an argument and get you to think about things that have happened within your company, and data that you can show your boss to get them on board. Let's talk through each of these four points in a little bit more detail. So sustainable business expansion. Certainly your boss is going to care about that. Of course, every boss, every company leader, wants to grow the business and attract new opportunities, new contracts, new customers. Of course, that's what they want to focus on. But then let's say there's a workplace incident now, all of a sudden, they have to switch their focus and mitigate and kind of put out this fire, so to speak. Workplace incidents come at a huge cost, so cost something that's definitely going to attract your boss's attention. It's going to prevent the company for focusing their efforts on growth and expansion. What are the costs that are related to an accident that may have been taken place well now your company is involved in costly legal battles. This includes litigation and settlements. This also will result in increased insurance premiums, which will significantly impact a company's bottom line, and of course, we want to avoid that at all costs, if there's a failure to prove compliance with safety regulations, or if your company is unable to prove that contractors were properly vetted before they come on site, then this can lead to huge fines and penalties in both imposed by government agencies, and this certainly goes against the goal of business expansion and growth. Then there's the business continuity. So if there's an accident, your company is forced to shut down, projects. Timelines are disrupted, hours are lost. These disruptions lead to delays and inefficiencies, which result in lost business and revenue. So that's, of course, very, very costly. And then there's the excuse me.

Lorena Espin  00:17:17

I apologize. Thank you for your patience. So yeah, if there's an accident, it's going to be very costly, and it's going to adversely affect business continuity. There are direct costs that are associated with accidents. There's going to be medical expenses. There's going to be lost wages, damage to equipment or to property that's very expensive to fix or replace. And then, of course, there's the all the indirect costs that come with a workplace incident. There's going to be reduced morale and productivity among your team. People will be discouraged. They'll be less, less enthusiastic to come into work. There will be increased absenteeism. And all of this, of course, will delete will lead to decreased efficiency and output that obviously, will be something that your boss will care if this is something that happens. So we want to prevent these things at all costs, the third point, brand and reputation. So if your company is able to position itself as a company that cares about health and safety, then it will be seen as a company that's responsible, ethical and trustworthy. But on the other hand, if it doesn't, if there is an accident that occurs, and all it takes is one incident, then people's trust in that company will erode. They don't trust that company to be committed to safety and employees well being. Why do we care? What people care? Well, who are these people? They're the top talent that now it will be very difficult for the company to attract. It will be difficult to win new business and gain investor confidence. Companies with a history of accidents are going to face scrutiny from the public, but also from regulators, insurers and potential clients, all of which will affect the company's bottom line. A negative reputation will also affect the ability to attract and retain customers. So of course, public opinion is very, very important, because who is the public customers, and all of this will decrease sales and market share, and it will take years to recover, if the company is able to recover at all. And again, it just takes one incident, and we all think it won't happen to us until it does, overall, the potential losses from accidents far exceed the initial investment that that it takes to put a health and safety program in place. So we've already seen all of these costs. They're on the slide. But they include, there's obviously the monetary costs, which include, insure. Increased insurance premiums, loss in revenue, affected price, stock price. But then there's also all of the immeasurable costs. Workplace accidents can damage a company's reputation, which leads to negative media coverage and public backlash. We know how much the media loves to touch to be attracted to a negative story. Injuries and fear of accidents can also lead to, again, a decrease in morals. So people will be absent, we'll see some increased absenteeism, but also presenteeism. There are also people that will work while injured, which again, just feeds into this vicious cycle, not to mention the most severe consequence of a workplace accident is loss of life or serious injuries, which, of course, will have devastating effects on individuals, families and communities, and we can't put a price on that. So this is a visual representation that summarizes all of the points that we talked about and all of the kind of effects that come from the cause of putting a health and safety program in place or not putting a health and safety program in place. This entire presentation will be sent within the week to you, so it will be available for you to go through.

Mallory Hendry  00:21:30

Great. Thank you so much. We are now going on to the question and answer portion of the webinar, so we have a few in here. Robin, why don't you take this one for us? Can you explain how your platform helps contractors identify potential gaps in their health and safety programs, and how addressing those gaps can enhance overall safety?

Robyn Asher  00:21:55

Sure. So good question. So our our program isn't just a software even though it's supported by software to make it simpler for obviously, the contractors and the clients alike, our program is a bit different, where we actually have teams of support staff and a team of health and safety professionals that actually review All of the information that's provided through a dynamic questionnaire that's based on the contractor themselves. So it's it's not it's like Lorena said earlier, it's not a rip and replace program. We actually take what you already have, we look at it, we review it, we analyze it, and then we give feedback on what is missing of the important parts of your program, based on your province, based on the number of employees you have, based on the work activities that you do, and the legislation that backs that information up. So the health and safety team is actually have eyes on documents, eyes on answers to questions, and they look at what we could call, what we call a profile, so the profile then determines what questionnaire that the that the contractor will get, and based on that, is how we can close the gaps, or help companies close the gaps in their health and safety programs.

Mallory Hendry  00:23:21

Fantastic. Thank you. Robyn and Lorena, why don't you take this one? Someone is asking, Why are contractors three times more likely to have an accident at their location, the questioner's location, than permanent employees?

Lorena Espin  00:23:40

Sure. Well, of course, we know that there are inherent risks that come with doing contractor work. So things like construction projects tend to carry some risks, because there's machinery involved, there can be confined spaces. There's working at heights. So there's lots of different examples of why contractor work will carry risks, just it's just inherent in the nature of the work. Also, it could be very dynamic work or very dynamic conditions. Again, if we take the example of construction, well, sometimes or often they'll be outdoors. There's the weather, which we obviously can't control. But then there's factors that will change that we are in control of. So for example, this contractor was slotted to be at this site, but now all of a sudden, we've changed, and actually we need them at this other site. And then also regulations change. So there's a lot of different things that will tend to change, which makes the work a little bit more risky. Perhaps a contractor hasn't had a chance to be introduced to the equipment that they're working with because that has changed, or maybe because the work sites changed, they haven't had a proper induction before coming on site. And then when they do come on site, we want. Them to get to work right away. So the whole process is very rushed, and because we want to, again, save time and money, we just put them to work right away, and they haven't been they haven't had an induction, they haven't been properly oriented or shown around, and then that's more likely to cause an accident. Also, we have inadequate safety measures in place, for example, again, like we talked about, the lack of induction, but also lack of training. So maybe the construction worker hasn't received an adequate, adequate training for how to use the equipment or what they're expected to do, which can lead to workplace accidents. Maybe they don't have the proper equipment, specifically protective equipment, so PPE. And then another factor is also just contractors, sometimes there will be human error because of fatigue. They work long hours, which we know that fatigue will lead to, will lead to mistakes, which can lead to an accident, and when we're fatigued, we're not always aware of our our circumstances or our surroundings. So that can be a very hazardous on a job site where there are a lot of hazards and a lot of specific procedures to follow. And then I think lastly, there could be an inadequate supervision. So we all have jobs to do. A contractors coming on site, we might not necessarily have time to watch what they're doing or make sure that they're following proper safety procedures or protocols. So yeah, I think it's just there's a lot of different components and factors that go into why a contractor might be more at risk than than an employee, an employee of the company, I think at the end of the day, they're just more exposed to a lot more.

Mallory Hendry  00:26:52

That makes sense. A lot of moving pieces there. For sure. We have another question that just popped in, how are the data aspects of brand and reputation monetized for a cost benefit analysis? Did you want to tackle that one?

Lorena Espin  00:27:11

That's a good question. I guess you could look at business cases where someone a company was affected by reputation. It's just the public can be very scrutinous and very unforgiving. So if a company has to shut down, I think that's pretty, pretty big data, but I guess I see like it is an immeasurable thing, data and when it comes to brand and reputation, but it does come with some cost. And then I would invite you to look at a case where something did happen, on an incident, and then maybe look at the numbers. You know, since that incident, what happened? Did we were we still able to retain as many employees or as many contractors? Were we still able to retain customers? Did the stock price plummet and all of these things I think are very, very likely to happen if, if there's damage to reputation,

Robyn Asher  00:28:05

or if you're tracking NPS scores or anything like that, you can

Lorena Espin  00:28:09

see or net promoter score, yeah, absolutely

Mallory Hendry  00:28:13

Okay. That's great. That makes sense. Another one has popped up here for small oops, maybe we're not going to tackle that one right now. Okay, when it comes to the ROI for a health and safety program, are there actual numbers or studies that can be referenced that might show specific financial savings? So for example, for every dollar invested, you save X amount on the back end.

Robyn Asher  00:28:44

I think that would be based on what your challenges are, what you're trying to do as an organization. I haven't seen anything that's specific off the top my head. I don't know Lorena, if you've have but you can think about, think about an organization, and think about the complexities of different organizations, and I, I, I would think it would depend on, on what you're trying to do, what your initiatives are and and what your company challenges are. Would really, I think, determine that in my mind, Lorena, I don't know if you can, if you want to,

Lorena Espin  00:29:22

I think also for if we look at the safe contractor program specifically so we help vet contractors and qualify them before they go on site. And I think a good KPI is the amount of hours that it takes to do something like that. It takes about an average of, like, eight hours, and then another average of four hours to re qualify a contractor at their time of requalification. Because we all know that documents and qualifications expire. So if we take all of that, if you have, let's say, even 100 contractors to manage, then that's that takes. A full person's salary at like $85,000 a year, an entire human being that that's all that they're doing, and that's assuming that they're doing it correctly. And this is just kind of the initial process. So I'm not even talking about assigning trainings to, like individual employees and then making sure they have that I'm talking about the company qualification at a company level that takes an entire person's salary and that person, what could they be doing? That's a health and safety professional? What would they prefer to be doing? They probably be preferring working on other projects. So I think that's a pretty good indicator of return on investment. If you think about how it takes one whole person just to kind of do the qualification process at a company level, you can see that you have those hours and that time back, and this is just in terms of hours.

Mallory Hendry  00:30:54

Great point. Someone's asking about small or medium sized businesses compared to larger companies. Do you find there's more pushback because the SMBs tend to have less time and resources to invest in these measures and equipment, and if so, how do you sort of approach that? Is there any difference to to what you would say to them versus their larger counterparts?

Lorena Espin  00:31:21

That's interesting. I do notice a difference. I think it's more small and medium sized that will have more of a challenge, because the bigger companies might not necessarily know what's being put in place, specifically, like a safe contractor, contractor management program. I yeah, I think it would just be looking at what you have specifically. I think it's a case by case thing with small and medium sized companies asking your boss kind of open ended questions, what would you prefer to be working on? What is success with the company look like? Wouldn't you prefer, kind of, again, appealing to what they would prefer to be doing, rather than, yeah, worrying about all the all the risks that would come with health and safety, with not putting a health and safety program in place.

Mallory Hendry  00:32:14

Okay. Yeah, those are great points. Someone else is wondering, does your system work with CSA, 45001 OHS management?

Robyn Asher  00:32:26

Yes, in a, in the in the in the position that that, if you have, obviously, if you have your 45,001 our system is, it would. It would be very, very simple and in a way, to go through our program. The difference between our program stand because we also have a standard within our program. So we do set a standard based on legislation, and our program assessments are based on that standard. The standard is, is is taken from legislation. It, it does mirror some of the 45,001 but it's a bit different in the sense that, because we have a dynamic process for contractors, it's based on a contract organization, and the legislation around that organization, as opposed to a international set standard. So it's if you have, we do accept the fact that if someone has 45,001 that the process will be very, very simple for them. And in the document, in the way they have to provide the documents, etc. But again, that's a slightly different is our standard is a dynamic standard based on the contractor as an organization. Again, we don't want to replace what contractors already have in place. We just want to help them mature as an organization in health and safety, we want to help them close their gaps, and we want to vet them so that the clients they're working with feel that they have hired contractors that at least meet legislative requirements for for the work that They're going to be doing.

Mallory Hendry  00:34:21

That's great. That makes sense. Thank you. Someone else here is wondering if you could help them understand the legislative requirements or differences in those requirements between contractor, company, pre qualification versus individual qualification?

Robyn Asher  00:34:40

I'm assuming Individual Qualification, they mean by training, quality qualified training as an individual I if I'm wrong, I hope that someone corrects me. But if you're talking about individual qualification, we also do that as well. So Individual Qualification as a part as is. Employees having the correct training for the work they're doing. We also do that for clients as well. So we will collect all of the training information that a client requires from individual from individual employees, and that that also can be housed in our system for clients to see that individual employee is qualified to go on site and do the work that they're supposed to be doing. I'm hoping that that answers that question.

Mallory Hendry  00:35:33

That's great. Thank you so much. All right, well, that's going to do it for today. Thank you so much to our speakers for sharing your insight and expertise with us, and of course, to everyone in the audience who joined us today, keep an eye out for more upcoming webinars and enjoy the rest of your day. Thank you. Bye.