A prominent HSE manager recently said to me before an upcoming meeting, “Just a warning: morale is pretty low around here.” That low morale was a result of the dominoes that were tipped in late 2014, as oil prices began its rapid decline. Energy companies all react differently to crashing oil prices but, most of the time, those reactions have the same unwelcomed outcomes – layoffs and spending cuts.
During times like this, one of the most important questions decision makers need to ponder is this: What is that fine line where budget cuts cause more damage than they prevent, particularly when it comes to the safety of employees? Safety is, and will continue to be, a top priority for major global corporations, despite cutbacks. Through experience in tough times, many corporations have learned that the cost of medical care, insurance, and lost time is far greater than the cost of outfitting employees with proper safety equipment.
So how can companies take the necessary measures to reduce expenses, and still maintain a proper safety protocol? There is no single answer; however, cost savings can be achieved through a combination of actions.
Cost Saving Action #1:
Behavioral Training - First and foremost, reduce cost by preventing injuries. Safety gloves are a last line of defense for hand injuries; behavior is, and always will be, the first and most important factor. Implement behavior training as part of your safety program. Use Start Cards to ensure proper PPE and safety precautions are followed before conducting a particular task, or develop an incentive program to reward safe behavior and actions. Offer First-Aid training to employees to assist their fellow workers in case of injury. Create a formula for measuring safety performance and recognize those who excel. These are effective tools that create a culture of awareness and safety, and help prevent injuries before they happen.
Want to reduce direct and indirect costs of injuries? Read our blog on hand safety tips.
Cost Saving Action #2:
Conduct a Cost Analysis - Next, conduct a cost analysis of your hand safety program. A common reaction to budget cuts is to look for “cheaper PPE.” But what does cheaper really mean? If you pay $15 for a pair of gloves, and your employee needs four pairs per month, that’s a cost of $60 per month to keep that employee’s hands safe. However, if you purchase a higher-quality glove that costs $25 per pair, and your employee needs only two pairs per month because the glove is designed to last longer, then the cost is only $50.00. That’s a savings of $10.00 per month, per employee. More often than not, doing a detailed and accurate cost analysis will demonstrate that higher quality products may actually save money in the long run, and you won’t run with risk of sacrificing safety. In Europe, when doing your cost analysis it’s also important to factor in waste disposal fees, which can easily increase cost when using lower-quality disposable gloves rather than higher-quality gloves that don’t need to be replaced as often.
Cost Saving Action #3:
Select the Right Glove for the Task - When conducting your cost analysis, it’s important to make sure you’re selecting the right glove for the task and don’t “over glove”, which is something we see quite often in the field. This is typically the result of overzealous salespeople convincing safety professionals that a more expensive glove is needed for a particular task when, in fact, it’s not. Conduct a task-hazard-glove assessment, and if you have workers using heavy duty gloves when they could just as easily use medium duty without sacrificing safety, there are savings to be realized.
Cost Saving Action #4:
Maintain Your Gloves - Contrary to what you might think by looking at impact safety gloves, most can be maintained and will last longer simply by washing them. In most environments, proper washing and drying can double the life of your hand safety equipment. The fact is, most gloves become saturated with grease and oil before they ever wear out. To properly care for your gloves, it’s important to follow specific washing instructions so you don’t risk ruining the construction of the glove. Ringers Research & Development department has put together proper washing and care instructions for our gloves, which you can find here.
Cost Saving Action #5:
Examine Inventory Controls - Finally, examine inventory controls for your PPE. In a meeting in Casper, WY, the base manager picked up seven pairs of gloves on his way through his facility to meet with me. Workers often treat gloves like ear plugs – taking them off, leaving them around, and getting a new pair before they are actually needed. There are a few ways to eliminate this problem. Implement a system where they won’t receive a new pair unless they turn in an old pair. This breeds responsibility in the employees to take care of their PPE and, in turn, saves the company money. Another effective way to save is to ask your local distributor to put vending machines on site. An executive for one of the nations’ top PPE distributors shared with me that his vending machines routinely save a company between 20-30%. That’s a staggering amount of savings for an approach that adds no expense to the company’s bottom line.
So does a company really need to sacrifice safety to survive budget cuts? Absolutely not! Five simple actions will go a long way to managing expenses and achieving budget in this new climate. Developing better training, doing a cost analysis, selecting the right glove for the task, and introducing inventory control measures will easily allow management to meet demands and develop much better practices for the future.
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