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Workplace safety can help boost profits

Workplace safety can help boost profits

LAS VEGAS — Making the connection between workplace safety and profitability can reinforce and spur greater attention to improving safety practices and reducing workers compensation costs in the construction industry.

There is often a reluctance to discuss safety and profits in the same conversation, but the financial benefits can help engage C-level executives in efforts to avoid fatalities and correct hazardous conditions, said Charlie Bacon, chairman and CEO of mechanical and maintenance specialty contractor Limbach Facility Services L.L.C. in Pittsburgh.

“There is a huge financial return by implementing safe work practices,” he told attendees at the International Risk Management Institute Inc.'s Construction Risk Conference in Las Vegas last week.

“It is cost effective,” agreed Thomas Gilbane, chairman and CEO of developer and contractor Gilbane Inc. in Providence, Rhode Island. “You can make money through safety, and if that's why people do it, that's fine.”

Limbach is experiencing a “terrible” safety year, which Mr. Bacon attributed to restructuring decisions made in 2011 to deal with the impact of the recession on the construction business.

“Things were tight,” he said. “We let some people go and really had to do more with less. And I believe it impacted that aspect of our company as to how things were going with safety.”

In response, the company formed a safety leadership team co-chaired by Mr. Bacon and the chief operating officer to engage senior leadership, but with more “boots than suits” such as key foremen, maintenance staff and technicians. The team participates in a weekly conference call to discuss safety topics and actions. In addition, the human resources director's job description has been revamped to focus on education and leadership training for those employees on the front lines of preventing workplace injuries, he said.

Contractors should be sure to let their agents or brokers know of any enhancements to their safety programs, such as integrating stretching programs or physical range of motion testing, prior to renewal and ask them to share the information with their insurance carriers, said Sonja Guenther, vice president and workers compensation specialist IMA Financial Group Inc. in Denver. Another particularly “powerful” piece of information to share is the number of hours of safety training completed, as well as any positive changes in incident rates, she said.

Companies should also be up to speed on the status of Occupational Safety and Health Administration citations, Ms. Guenther said. “I can tell you your insurance carrier or underwriter will be looking at the (OSHA) website to see if you have any outstanding violations prior to going through your policy renewal,” she said.

But OSHA issued a memorandum in 2012 that called incentive programs that discourage employees from reporting their injuries problematic and reminded employers that they cannot discriminate against employees who exercise their rights to report injuries.

“OSHA does not take very kindly to employers that are using incentive programs as a safety benefit,” Ms. Guenther said.

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