Does the ROI on health and safety costs outweigh the expense?
It is important not to confuse the benefits of a Safety Management Program with the concept of Return on Investment. According to Google, “ROI (Return on Investment) measures the gain or loss generated on an investment relative to the amount of money invested.
ROI is usually expressed as a percentage and is typically used for personal financial decisions, to compare a company's profitability or to compare the efficiency of different investments”
During a most recent case study that was conducted using a sample of over 1000 employers across an array of industries within South Africa during the 2019 period suggested an average ROI of up to 380% in employers who implemented full turn key solutions utilising SafetyWallet in partnership with MAKROSAFE Holdings (Pty)Ltd and OHS Online as trusted partners.
Not only did these employers ensure compliance to the act, they also ensured that loved ones return home healthy and safe after work on a daily basis whilst being rewarded.
Facing the harsh economic climate, South African employers are continuously faced with rising running costs, increased taxes and decreased revenue as a result of poor economic growth over the last few years resulting in South Africa's Gross Domestic Product (GDP) declining to roughly $385 billion in 2019.
It is estimated that there are currently five hundred and fifty three thousand four hundred and twenty five (553 425) registered employers in South Africa which currently employ an approximate ten million two hundred and fifty one thousand employees (10 251 000). In comparison with the current population of South Africa, estimated by Stats SA to be fifty eight million seven hundred and eighty thousand (58 780 000) in June 2019 according to the released mid-year population estimates, indicates that 17.45% of the South African population currently residing in the country head to work on a daily basis. Unfortunately not all of them return home healthy and safe after work .
Given the circumstances, employers are tightening the belts and implementing cost saving strategies in the order of long term sustainability and in some cases of sme’s ….. just to keep the doors from being shut!
As a result a substantial amount of resource is no doubtedly diverted away from the most important aspects of the business, one of them probably being the safety of its employees as employers slash budgets for personal protective equipment, health and safety training, safety management partners and further in the form of maintenance schedules for machinery etc.
Contrary to popular belief, It's often perceived that Health and Safety endeavours may cost money, well yes they do! However the results could potentially far outweigh the expense resulting in an impressive ROI if managed effectively.
Upon exploring the benefits of complying to the act, the following would be noted:
- Increased compliance toward health and safety within the workplace
- Reduced medical and compensation fund costs
- Improved workplace culture and job satisfaction
- Improved productivity
- Improved competitiveness in the marketplace
- Improved quality of work
- Reduced absenteeism and employee turnover
- Reduced probability of accidents and exposure to occupational diseases.
The Safety Wallet, backed by technology and driven by intelligence, helps businesses understand how compliant they are, provides tools and support to ensure employers and employees alike can improve Health and Safety compliance within the workplace whilst offering great rewards to ensure motivation along the way.
By employers becoming a member of one of the four SafetyWallet membership reward circles namely:
- Friend Circle
- Family Circle
- Champion Circle
- Pinnacle Club
Businesses immediately qualify for the specific Reward discounts as per the specific membership circle joined.
The picture below, Illustrates one of the membership plans SafetyWallet has to offer to highlight your possible Return on Investment:
In an annual report issued by the Department of Labour , one hundred and forty four thousand eight hundred and eighty eight (144 888) employees were injured/contracted occupational diseases during the course of work in the year of 2018. Sadly three hundred and forty eight (348) of these were fatal. Put into perspective 1.41% of our total workforce in South Africa during the year of 2018 did not return home after work, Safely.
It is reported that employers contributed an approximate R7.3 billion towards the compensation fund for the 2017/2018 financial year. The main objective of the compensation fund is to provide compensation for disability, illness and death resulting from occupational injuries and diseases at a given period. The beneficiaries of the compensation fund include employers ,employees , widows, widowers and children of employees. In total during the 2017/2018 financial year, the compensation fund contributed R3.6 billion in benefits as a direct result of disability, illness and death resulting from occupational injuries and diseases in the workplace.
Whilst the Compensation for Occupational Injuries and Diseases Act (130/1993) aims to provide for compensation in the case of disablement caused by occupational injuries and diseases, sustained or contracted by employees in the course of their employment, or death resulting from such injuries and diseases; and to provide for matters connected therewith , the Occupational Health and Safety Act (85/1993) aims to provide for the health and safety of persons at work and for the health and safety of persons in connection with the use of plant and machinery; the protection of persons other than persons at work against hazards to health and safety arising out of or in connection with the activities of persons at work.The act further provides for the protection of people other than people at work from hazards arising out of or in connection with the activities from people at work.
Prescriptive legislation relating to the OHS Act 85/1993 and regulations provide the framework and basis for a Health and Safety Management Program and clearly defines associated responsibilities within the relationship between the employer and employee. The Act furthermore governs the health and safety for the diverse industry of South Africa
Compliance toward the act (OHS Act 85/1993) does not entirely mitigate the possibility of injury / death whilst at work and it is important for employers to take note of their responsibilities in terms of the act;
THE OHS ACT SECTION 8 – General duties of employers to their employees
- Every employer shall provide and maintain, as far as is reasonably practicable, a working environment that is safe and without risk to the health of its employees.
- Without derogating from the generality of an employer’s duties under subsection, the matters to which those duties refer include in particular:
(a) the provision and maintenance of systems of work, plant and machinery that, as far as is reasonably practicable, are safe and without risks to health;
(b) taking such steps as may be reasonably practicable to eliminate or mitigate any hazard or potential hazard to the safety or health of employees, before resorting to personal protective equipment;
It is argued that a risk assessment not only satisfies section 8.2 (b) of the act, but also has a significant impact in the foreseeability of the resulting likelihood of incidents within the workplace. Not only does an extensive risk assessment, highlighting hazards and risks, foresee the likelihood and consequence of resulting incidents in the workplace but it also provides a practical approach to control these hazards and risks thus not only ensuring compliance to the act and regulations but also substantially mitigating the potential for incidents as well as minimising the effect of injury / illness should they undoubtedly occur.
The SafetyWallet membership programme , in partnership with MAKROSAFE Holdings (Pty) Ltd and OHS Online (Pty) Ltd, encourages and rewards employers for being compliant to the Occupational Health and Safety Act, all other relevant Legislation, Regulations, Standards and Metropolitan / Municipal Bi-Laws relating to Occupational Health and Safety within the workplace. SafetyWallet encourages and rewards employers for being committed to Health and Safety by supporting and providing the organisation with a total Health and Safety Solution, whether it be internally or through the SafetyWallet Partners programme
Upon completion of a Health and Safety Compliance audit, SafetyWallet compliance level rewards will be activated. This is based on the current compliance status, as determined by the outcome of the Health and Safety Audit.
A detailed report with the Executive summary of the compliance audit will highlight what the next steps should be in order to increase Health and Safety Compliance within the workplace. By increasing the workplace’s compliance, the risk is lowered and more lucrative rewards are assured.
Visit www.safetywallet.co.za today , Get Rewarded. Get Compliant. Get SafetyWallet.