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How to Plan Your Safety Programming and Budget for 2021: Post-COVID Trends and Safety ROI

Workers' Compensation Claims and Cost, Risk Management |
Written by Kevin Lombardo

As we near the home stretch of 2020, safety leaders and employers are looking ahead to next year and starting the process of planning safety initiatives and corresponding budgets for 2021. Making budget decisions is never easy, and many enterprises are still adapting to life and business in the age of COVID-19. Though employers may be searching for possible reductions if revenue has been impacted, the conditions around the coronavirus pandemic have hardly made workplace safety less important—in fact, in a world where the nature of work is changing and workers face new stressors every day, employee safety should be top of mind during the planning process. Injury risks are as prevalent as ever, and neglecting to create a proactive workplace safety plan is sure to result in staggering costs down the road.

 

Why Invest in Safety in 2021?

Workplace safety is a continuous effort, and forethought in the form of investment in safety programming is rewarded with dramatically lower costs. Musculoskeletal disorders and repetitive strain injuries are costly, and the average cost per medically consulted workplace injury reached $41,000 in 2018 (according to National Safety Council data). That means that even a single injury can be financially debilitating for an employer of small to moderate size, not to mention the indirect costs from factors like missed work days, which totaled 103 million in 2018.

In today’s world, the broadening definition of “workplace” also implies challenges and additional safety risks. According to research by Willis Towers Watson, only 11% of American employees worked remotely on a consistent basis last year, but that number has climbed to 60% of all workers across the country. Until the COVID-19 pandemic has subsided to the degree that business can return to “normal,” safety managers will need to address risk factors in employees’ homes as well as on-site. Even well into 2021, researchers are predicting that as much as 34% of the workforce will continue to do their jobs from home or remotely. Without the consistent safety reinforcement and reliable environment that can come with working on-site, employees are more likely to suffer ergonomic injuries that could diminish productivity and lead to high workers’ compensation costs.

These evolving conditions and new challenges are prompting safety professionals across the country to increase their focus on employee safety and health. Some 39% organizations stated in a recent survey that increasing resources to programs and initiatives centered on employee safety was a top-three priority, an increase from 27% the previous year.

Creating a proactive safety plan and investment strategy is one way that employers can promote safety and wellness among workers and curb the unanticipated costs of injuries. In fact, investment in safety is proven to reduce long-term costs and deliver a high return-on-investment—the U.S. Department of Labor estimates that organizations save between $4 and $6 for every $1 invested in safety programs. DORN’s programs are designed to achieve or exceed that level of ROI—in many cases, our ergonomics, training, coaching, and pain relief therapy programs deliver up 600%, 800% or even greater ROI annually. Budgeting is about smart investments that pay off with increased productivity, better morale, and reduced costs in the long term, and DORN’s safety solutions .

What are the most important things to address while planning your 2021 safety budget?

 

1. Align your safety goals with those of the organization

Never has it been more important for organizations and enterprises to clearly define their goals over the short term. The coronavirus pandemic and resulting economic slowdown has changed the outlook for businesses across virtually every industry, especially those whose staffing and ability to work at full capacity was dramatically affected by illness risks and new public health guidelines. Many manufacturing facilities now must ensure that workers are properly spaced during shifts to maintain social distancing, which has limited employee headcounts and in many cases changed business’ ability to keep up with demand.

When you’re planning your safety budget for 2021, consider these variables:

  • Staffing levels: can your facilities keep employees on in current numbers, and if so, will adjustments need to be made in order to maintain production? These adjustments come with costs and will affect whether your organization is prepared to achieve its goals.
  • Revenue/income forecast: These figures will determine how much flexibility is available in your budgeting process.
  • New investments: Is your organization hoping to open new revenue streams or implement new technology? Develop initiatives that support organizational and departmental goals.
  • Safety benchmarks: Determine your goals for incident rates, turnover, workers’ compensation expenses, and minimizing lost productivity.
2. Identify direct and indirect safety costs

Making a sound budget that will foster a strong safety culture is impossible without knowing the costs your organization faces when it comes to employee safety and wellness. Direct cost factors are relatively easy to quantify and include:

  • Personal protective equipment
  • Training and education
  • Workers’ compensation payments and premiums
  • Compensation/salary for safety professionals
  • Safety programming

Indirect costs can be more unpredictable, and therefore more difficult to integrate into a budget that accurately anticipates your organization’s safety needs. However, accounting for indirect costs is critical in creating a successful budget, as they can dwarf direct costs by 200-400%. Factors that spur indirect costs include:

  • Lost productivity from absenteeism, fatigue or chronic pain among workers
  • Presenteeism and poor morale
  • High turnover associated with safety incidents
3. Check on changing safety regulations and fine structures

Now more than ever, safety officials are reevaluating established best practices and introducing new guidelines to help prevent the spread of illness. Make sure your organization fully understands the costs of adjusting to new regulations, as well as the potential OSHA fines (which are not tax deductible).

4. Plan for new trends in post-COVID safety and the future of work

The nature of work is changing before our eyes. More employees are working from home or other off-site locations than ever before, and employers should be proactive about ensuring the safety and wellness of employees who don’t regularly come on-site. With social distancing now a part of everyday business, organizations must look at both traditional and alternative strategies to address their safety objectives. This means adopting more technology-driven solutions without sacrificing on-site solutions. For instance, COVID-19 preparedness audits are critical in establishing and preserving an overall safe environment in terms of disease management. Following a well-defined preparedness plan will help ensure that you have time and resources to implement or enhance other safety initiatives. In addition, consider virtual self-care training, software-based safety programs, remote education, and ergonomic evaluation for home-based and office workers. Workplaces are increasingly looking to new technology to analyze workplace hazards and environmental conditions. Though adopting these technologies early may seem costly, falling behind is sure to prove even more debilitating for employers. For example, many organizations are looking to artificial intelligence systems to identify hazards and respond to illness risks. Will your business be ready for the future?

5. Prioritize budget choices by functionality and safety risk

Identify the processes, departments, and safety initiatives that are most critical for safe operation of your facilities. Making hasty budget cuts is an easy way to increase injury rates if you have not accounted for how those cuts will impact the material safety of your employees. Defer expenses related to low-risk areas and concentrate on investing in and protecting the most safety-critical parts of your operations.

6. Partnerships

It’s possible that your safety resources will be stretched thin in the coming months as EHS managers and safety professionals devote more time and energy to preventing the spread of illness and dealing with new challenges such as declining air quality from forest fires and the predicted worse-than-average storm season.

Think hard about partnering with an injury prevention service provider who specializes not just in COVID-19 management and wellness concerns but also the routine injuries (MSDs, RSIs) that can force substantial costs on your business. Make sure that your workplace safety partner offers a wide range of solutions and can demonstrate a history of proven results in reducing injury rates and improving business metrics. With a partner taking a data-driven safety approach and ready to be flexible as circumstances change, you’ll be prepared for whatever challenges the coming year might present.

Conclusion

There’s no concrete roadmap that defines how every employer should respond to today’s changing world. However, creating a workplace safety plan and budget for 2021 that focuses on proactive solutions and smart investments in proven safety programs will equip your organization to proceed confidently into the future with a workforce protected by a strong safety culture and forward-thinking safety managers. Focus the future around Empowering employees to be owners and stewards of safety through Education and Engagement, and you’ll see results in the form of lower injury rates, reduced organizational costs, and a stronger workplace safety culture.

Contact our team for a free consultation and COVID Audit.

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About the Author

Kevin Lombardo

CEO & President at DORN Companies
Kevin is Senior Executive and widely recognized thought leader in workers’ compensation and Total Worker Wellness with a focus on workplace injury prevention and on-site innovative therapy solutions.
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About the Author
Kevin Lombardo

Kevin Lombardo

CEO & President at DORN Companies
Kevin is Senior Executive and widely recognized thought leader in workers’ compensation and Total Worker Wellness with a focus on workplace injury prevention and on-site innovative therapy solutions.
Contact Kevin