In Ben Franklin’s words, “A penny saved is a penny earned.” Whether a business saves money in the field or behind a desk, wisely cutting costs positively impacts the bottom line. When safety professionals contribute to these cost-saving measures, they are contributing to the company’s financial success.
The Thinking Shift
Safety professionals are often focused on how to justify a cost. You may spend more time proving why something is worth paying for rather than finding ways to cut costs. Since the pandemic, the cost of doing business has increased. Now, it’s time to shift your thinking and start focusing on spending less and saving more.
5 Tips to Figure Out How to Save 2%
Alec Kinslow, a director of environmental, health, and safety for medium-sized manufacturing construction companies, has figured out a plan on how you can cut costs and communicate your ideas to business leaders.
Here are five tips on how to save 2%:
1. Know Your Costs
2. Know What You Own
3. Control Costs
4. Research New Options
5. Invest Resources Wisely
Know Your Costs
Understanding costs is the first step to establishing a more cost-effective budget. How much do you spend on equipment? How much are you spending on training, donuts, and refreshments? What about safety meetings? How much are you spending on these meetings? Be detailed in your answer. The more precise you are, the more control you have over costs.
Depending on how your company tracks purchasing, costs will break down by department or job site. Figure out the total spending on items by working with your team or company’s purchaser. Break down how much you spend on a monthly and annual basis. This will help you determine small and large expenditures and where you may be able to save.
Remember, most spending should be planned; however, there are a few exceptions. Examples of exceptions could be material cost increases, shipping cost increases, and supply chain issues.
Know What You Own
The second most important piece to saving 2% is figuring out what you own. What accounts impact your company’s budget? What is being removed from your company’s ledger? Ask your supervisor or manager to clarify which line items are your responsibility. Most supervisors positively respond to this because they see you are taking the initiative in saving the company money.
Once you figure out what you own, you can go back to figuring out your costs and identify spending trends on each account assigned to you.
Now that you have the numbers and trends, you can figure out if you are spending money on unnecessary purchases. Are you outsourcing tasks that can otherwise be done in-house? Think about switching up the way you do business, but make sure you aren’t sacrificing quality for a cheaper option.
Price should not steer your purchasing. As the old saying goes, you get what you pay for. Controlling costs is all about balance. Sometimes spending more to buy less is better than going with the cheapest option.
Research New Options
The adage, “we’ve always done it this way,” is outdated thinking. The old way may not be the best anymore. Be courageous, and open your mind to new and better options. One idea, one change, can save your company money.
Today’s world has grown with the expansion of new technologies and software. Why not explore it? The construction industry is known for adopting technology late. However, it’s time to change this. It’s important not to be afraid to try something new. If something new doesn’t work, admit it, and be flexible to try another option.
Invest Resources Wisely
Invest resources into safety, not just compliance. Doing so will help reduce the company’s worker compensation premium. Work with your insurance company and get a projected modification rate.
Show your managers and supervisors historical data on where you’ve invested money that led to savings in the past. For example, show them training meetings held and inspections conducted that can help justify spending more money to save money. Make sure your purchasing ideas are best for everyone by analyzing your cost.
Being on the Curve to Financial Savings
Knowing your costs and what you own will help you control those costs, explore new options, and invest in reputable resources. With a detailed plan to reduce costs, you can sell these ideas to management and work together to save 2% or more on the bottom line. Be on the curve, not behind the curve, and take the initiative by cutting costs for your company.
Kinslow, A. J., Saving 2% on Your Bottom Line Professional Safety
Slowey, K., Boosting the bottom line: How construction companies can cut costs and ensure they ‘survive’ Construction Dive
Pandemic Workplace Safety Updates:
What Purcell Enterprises wants you to know
I attended an auditor refresher course May 2022 and in 2023 it looks like we will go back to regular health and safety auditing and visit employer worksites to conduct documentation, interviews and observations in Alberta. BC requires in-person observations so in-person health and safety audits are a requirement there and will continue to be so in 2023. Saskatchewan, like Alberta, will go to in-person auditing in 2023 as the pandemic becomes endemic.
The audit documentation and observations now require the number and type of documentation/persons/situations observed to better quantify things. For example, you must verify your observations by stating that 80% of the employees were wearing PPE—8/10 had positive observations as 20% were not wearing safety glasses. Even if the documentation is 100% you must state how you verified this score: 17/17 inspections had management BBS observations so full marks were awarded. This requirement does not apply to interview questions because quantification of interview results can point to a particular employee’s response—so confidentiality of interview results must be maintained.
Both federal regulations (Canada Labour Code Part II) and OH&S regulations in Alberta must be considered now—it used to be the federal legislation defaulted to the provincial legislation but you must know whether federal or provincial legislation applies to your Company (interprovincial trucking, banks, radio stations, railways, pipelines are often federally regulated). Interestingly, depending on the nature of your work—interprovincial moving company/bottle depot—the company may fall under both regulations.
For HSC meeting members and cochairs—in-house training in HSC/HSR roles and responsibilities can take place. Use the legislation as a guideline to know what topics must be covered in your in-house training so it meets legislative requirements or continues to train your members/co-chairs through your Certifying Partner. Now—HSC members, as well as co-chairs, must be trained.
For complex sites—the head office location need not be sampled in maintenance years although senior management still needs to be interviewed. An interpretation is forthcoming soon.
Remember when in-person auditing occurs—COVID protocols still apply—social distancing, hand sanitization and the use of masks and the use of questions to determine if persons have been exposed to Covid still apply but in 2023 may be more optional depending on the type of variants present.