WHAT WORKS FOR ENGAGEMENT – UNDERSTANDING THE FINANCIAL RELEVANCE OF SAFETY & THE OPPORTUNITY FOR TRUE ENGAGEMENT
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When trying to justify the business benefits of safety in order to get management buy in, if you can’t talk in financial terms the engagement is lost. All businesses are in operations to make money – even charities. As a safety professional in a corporate environment you must know your numbers and how you can quantify the costs and benefits of your work. Health, Safety, Environmental, Quality, Administrative functions in business must understand and manage budgets and business cases. When true dollars are applied action towards creating a safer workplace is created from new costs allocated to harm sources. This session will explore the positive impact on organisational safety of cost focusing and establishment of true costing of harm, discussing key elements of this harm accounting model: Creating a financial relevance for HSEQ functions in business Fine tuning and remedying existing risk management strategies Making HSEQ relevant by assisting HSEQ personnel to speak in financial terms Future requirements for Safety Reporting – Financial Reporting Options for Safety Professionals (as per SWA Monitoring & Measuring Safety March 2017).
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WHAT WORKS FOR ENGAGEMENT – UNDERSTANDING THE FINANCIAL RELEVANCE OF SAFETY & THE OPPORTUNITY FOR TRUE ENGAGEMENT
- 1. What Works For Engagement? Understanding the Financial Relevance of Safety JL HAMILTON 7 September 2018
- 2. Non-Financial Risks Language Safety Financial Reporting The Numbers Don’t Lie ROI (Proving Value in Prevention) The Costs of Damage Risk Dollarisation® Create Action Futuristic Thinking
- 3. Where everything else is numbers… Where all the rest of the decisions are made… Non-Financial Risks
- 4. Non-Financial Risk is those items of risk that are not normally managed in monetary or financially reported: Operational Risk Compliance Risk Conduct Risk IT Risk Cyber Risk Third- Party Risk Non-Financial Risks
- 5. The cost incurred by repercussions (effects) of direct environmental impacts (for example, from the emission of pollutants) such as the degradation of land or human-made structures and health effects. In environmental accounting, it is part of the costs borne by economic agents. The word “damage” is chosen and used to speak to the commercial/ business/ operational parties of a business whom regularly speak in these terms for stock and accounts of widgets worldwide. Damage Costs
- 6. Why Do People Go Into Business? WHY?
- 7. Goals
- 8. NO MATTER WHICH LANGUAGE Dolarização do risco Dolarización del riesgo リスクのドル化 Risk Dollarization Dollarisation des risques Risico-Dollarisering 风险 货币 Money Talks
- 11. Perceptions..
- 13. Improved Economic Outcomes New Language Clear, Transparent & Accurate Marked, Measured & Manage Lets Commercially focused people understand Non-Financial Risk Risk Dollarisation® has positive impacts & results for all entities including workers and companies. Financial Approach to Safety
- 14. Damage Costs… IMPORTANT NUMBERS Suitable Duties Medical Counsellors Investigators Public Liability Legal Physio External provider Common Law Claims Surveillance Doctors Insurance
- 15. Value… Reduce Costs and Identify Value Gather the Hearts, Minds & Pockets
- 16. Engagement…
- 17. Why Does it Matter… Refer to SWA “Measuring and Reporting on Workplace Health and Safety” - March 2017
- 18. Proven Returns… Refer to ISSA https://www.issa.int/en/details?uuid=f8ded415-513e-4326-9ecf-00231eb2a279
- 19. SWA Recommend… WHS INDICATORS INTERNAL REPORTS EXTERNAL REPORTS Boards WHS Investors Community Financial indicators of WHS performance # workers’ compensation claims ^ $ workers’ compensation costs ^ $ fines and regulatory penalties $ legal fees ^ ^ $ lost revenues ^ ^ $ reputational repair costs ^ $ contingent liabilities ^ $ WHS incentives paid ^ ^ ^
- 20. The numbers don’t lie… Sprains & Strains, Muscular Skeletal % & Back Specifically Industry QLD Claims Cost (17/18FY) NSW Claims Cost (14- 15FY) SA Claims Cost (14-15FY) NZ Claims Cost (16/17FY) Back Injury Sprains & Strains M/Skeletal SSM% Mining - Coal $61,371 $26,400 $18,008 $2,236 19% 49% 25% 74% Electricity - Supply $40,529 $13,800 $18,008 $2,236 19% 31% 28% 59% Construction - Roads & Infrastructure $57,130 $14,700 $18,680 $2,236 15% 49% 25% 71% Transport, Postal & Warehousing – Rail $26,085 $13,600 $25,081 $2,236 19% 41% 27% 68% Public Admin & Safety - Sec & Govt $16,619 $13,000 $18,008 $2,236 19% 51% 25% 76% Education & Training – Primary & Sec $15,904 $10,800 $18,008 $2,236 19% 36% 19% 56% Health Care & Soc Ass - Aged Care $11,581 $8,000 $18,329 $2,236 19% 51% 29% 81%
- 21. Create Action
Editor's Notes
- Once I switched that perception The dark side They thought we put money Cold hard facts many peple think like this That’s why we say risk…. Pwc Rob Ashley board meeting – how do you get them to listen to you?? Directors piped up skull and cross bones scarf But I simply said I have them by the hip pocket I talk in dollars this was back in 2011 when it had to start My job was on seek about 3 times whilst i worked there!!
- Once I switched that perception The dark side They thought we put money Cold hard facts many peple think like this That’s why we say risk…. Pwc Rob Ashley board meeting – how do you get them to listen to you?? Directors piped up skull and cross bones scarf But I simply said I have them by the hip pocket I talk in dollars this was back in 2011 when it had to start My job was on seek about 3 times whilst i worked there!!