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Safely Reducing Safety Costs - 3 Dangers of Slashing your Safety Budget (Part 1)

Posted by Matt Segal on Aug 28, 2019 10:20:56 AM

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Institutions are changing how they allocate budget. For many safety programs, that means one thing:

It’s time to sink or swim.

Upper management is increasingly requesting that you demonstrate not only how much value you add to your research program, but also what steps you’re taking to stay efficient.

So what’s changed here? University leaders are realizing that they can no longer simply hike tuition to cover rising costs, and they’re looking for new places for revenue generation. Unfortunately, they often turn their eyes to their research safety programs.

The good news is that if you play your cards right, you can turn that critical eye right on its head, obtaining more resources for you and your team. In our work with numerous universities, we’ve observed a few patterns that can help us understand this problem, as well as its potential solutions, and we want to share our knowledge with you.

In this article, we’ll set the stage by focusing on the risks of reducing a safety program’s budget (how not to do it). In our next piece, we’ll detail a few areas of focus you can cut back on that won’t introduce more risks.

Research safety: cost-center or cost-saver?

There’s a saying in the safety world: “If you think safety is expensive, try an accident.

It’s no secret that research safety programs can be a major cost center for most universities. As we all know, it’s not simply a matter of purchasing PPE and conducting inspections (unless you are just looking to “check the box” on safety).

While accidents themselves can be costly, dealing with the ensuing investigation, fines, and corrective actions all have significant costs as well. If you’ve ever experienced an accident and the ensuing follow up, you know what we’re talking about.

A few statistics to consider:

  • A single injury costs organizations on average $32,000 (National Safety Council Injury Facts 2014)
  • A serious OSHA violation can carry a penalty of up to $13,260 (OSHA)
  • Indirect costs such as investigations and administrative time related to an injury or illness can range from 1 to 4.5x direct costs (Stanford University)

 

Not only that, but the ensuing investigation may draw unwanted scrutiny and expose other flaws in your safety program. Over half (54%) of institutions say they do not have the ability to withstand a major reputational risk event, according to research by United Educators.

Then, of course, there’s the human side to all of this that too often gets overlooked. When it’s your job to protect the people at your institution, you understandably get upset, sad, worried, and angry when something happens. That emotional turmoil and stress doesn’t come for free. Often, it impacts your job performance, or incentivizes you to find a new job at an organization that values its safety program a little more highly.

When you add it all up, it’s clear that investing in safety makes good financial and reputational sense.

3 dangers of slashing your safety budget

Obviously, reducing funds from a critical area like safety is a tricky thing to get right.

On the one hand, you need to trim the fat from areas that add no value. On the other hand, you don't want to slash costs so much that you sacrifice safety and introduce a new risk in lack of coverage.

In some situations, the approach to cost-cutting is to downsize personnel, reduce professional enrichment, and hold off on purchasing new equipment. The irony is that this approach can actually end up increasing your risks and costing your institution more money in the long run.

1) Gambling with safety

The most obvious danger of reducing safety spending is the potential for people to get hurt.

Consider, for example, the now-infamous UCLA lab fire. Research assistant Sheri Sangji was transferring a syringe of tert-butyllithium when the chemical ignited. She was not wearing a lab coat and her clothing caught fire, resulting in severe burns that led to her death 18 days later.

Had Sheri had been wearing a fire-resistant lab coat, her burns might have been less severe. However, requisition forms from the UCLA Department of Chemistry and Biochemistry show that fire-resistant lab coats were only ordered after the accident, at a cost of $45.05 each.

The ensuing court case cost UCLA nearly $4.5 million in legal fees alone — enough to buy 86,000 lab coats. If you keep waiting to improve things until someone else has an incident, it’s only a matter of time before your institution is the one that causes everyone else to start scrambling.

2) Short term gains cause long term pains

Even without a major accident, cost-cutting can do more harm than good. Replacing equipment less often or cutting back on professional development can help you save money in the short-term, but it can cost you in the long run.

When staff and students are forced to conduct research in outdated labs without adequate training and equipment that’s falling apart, research suffers. And since research is what brings money into your institution, this sets off a vicious cycle of cost-cutting that’s hard to recover from.

You might not notice a difference right away, but chipping away at your safety budget can seriously erode your entire research program’s foundation. It also shows your research community that you see safety as a cost, not an investment. If you do not take safety seriously, you cannot expect your researchers to either.

3) Fast, cheap, or good – you can only pick two

If you want a good safety program and you want it for less money, then you should expect to spend more time on safety tasks. Why? Because with fewer resources to get the work done, it ends up taking your safety team and researchers longer to complete tasks like data entry, audits, and reporting.

Think of it this way: you wouldn’t ask your groundskeeper to mow the university lawns with a push mower — it might save a few dollars up front, but it would be an enormous waste of resources over time (and likely increase the risk of a worker’s comp claim being filed for a related injury).

Similarly, when your safety team and researchers are asked to complete safety tasks with inefficient tools that frustrate them, their productivity suffers. What ends up happening is that the increased labor costs far outweigh any potential savings you might see from giving them the cheaper tools for the job.

Now, sometimes, doing something more slowly is an acceptable (and even desirable) solution. Not everything has to be done at a lighting pace, and acting like it does will quickly exhaust resources that could be put to good use elsewhere. However, for many safety-related activities, the exposure of risk is directly related to the amount of time it takes to complete the related task. This could be as simple as accessing critical safety data or closing out an inspection finding with a high risk lab.

We all know what can happen when risks are left unattended for too long.

Your takeaway

  • Safety costs aren’t just limited to the line items on your budget — you should also consider the potential cost of a lack of safety such as accidents, internal or external audits, investigations, fines, and reputational damage.
  • When you add up these costs and risks, investing in safety makes good financial sense.
  • The standard approaches to cost-cutting (like downsizing personnel, reducing training offerings, or holding off on purchasing new equipment) can actually increase risks to your people, finances, and reputation.
  • Research safety should be a “cost saver” with the proper investment. “Cheaper” safety usually takes more time, which can increase your labor costs, offset any potential savings you might see, and increase risk.

In our next article, we’ll look at some of the opportunities to save money without compromising on safety. Until then, feel free to reach out to our team with questions.

Topics: Why Safety Matters, Training, Inspections, Why Good Software Matters

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