The true cost to your business of breaching health and safety........

The true cost to your business of breaching health and safety........

Can You Afford Not To Comply?

Everyone remembers the notorious ‘Smiler’ rollercoaster incident in 2016. 
The case made national headlines and resulted in a record £5m fine for Merlin Attractions Operators. 
The bad news for employers is that there has been a sharp rise across the board in corporate fines for health and safety breaches - 18% in the last year!  

Why has this happened?

Well, the dramatically increased amount being paid out by UK businesses in health and safety fines  (£57.3m in 2017 up from £48.5m in 2016) follows tougher guidelines that came into play in February 2016. 
The Sentencing Council (the UK’s sentencing watchdog) increased the size of fines for serious health and safety breaches, sending a very clear message to businesses and organisations that they must give the highest priority to protecting employees from injury, illness and death. 

The 2016 guidelines are the clearest guidelines the UK courts have been given, directing them to decide on the level of management culpability for risk of, or actual, harm; and linking the annual turnover of the organisation. The new guidelines make it more likely that a director could go to prison, not only where breaches are intentional but also where there is a ‘blind-eye’ mentality shown by directors. With a simultaneous rise in prosecutions, it’s not surprising that there has been a rise in custodial sentences. The HSE is now prosecuting more frequently, with a high conviction rate: 93%. Since 2016, the HSE (which prosecutes under the 1973 Health and Safety at Work Act) has also shown a trend in targeting managers (as well as companies) for the duties of care that individual managers have to their staff. So a company could be faced with the costs of multiple legal defence teams. Even without a prosecution, a company could be left with a hefty bill simply for being investigated. The HSE charges corporate rates, roughly £129 an hour. It all adds up to a punitive financial pinch for companies who flout workplace health and safety regulations.

Apart from legal fines there are other costs of a workplace or incident (or, from a poor health and safety culture before an incident occurs) that can be directly measured by a business.

Reduced employee morale and productivity Evidence has shown that an unsafe workplace has proven to lower levels of employee morale, which has the knock-on effect of reducing productivity. In a particularly stressful work environment there is more likely to be a rise in absenteeism and a high turnover of staff. Apart from the costs involved in turnover, extra time and resources are spent on training and onboarding new employees. Loss of time and resources An accident or incident can cost a business greatly in both time and resources, even months and years after the initial incident. Some examples of lost time include:

* Legal cases – which can take years to resolve

* Further negative press coverage if a sentence is given

* Lost working days – on average; 9.1 working days are lost for injuries, 19.8 for ill health, 23.8 for stress, depression and anxiety (HSE 2016/17)

* Time spent sourcing and training cover or replacements

Damaged reputation: The huge ‘hidden cost’

The cost of damaged reputation is hard to measure, but ultimately it could drive you out of business. A hit to reputation due to an incident can lead to a loss of both existing and new customers, clients, investors and partners. While news of an incident can quickly spread amongst the industry, the rise of social media and 24/7 news means that a corporate reputation has never been more vulnerable because news can reach a wide audience; and bad news travels fast! Crisis communications costs can be hard to improve PR, but in many cases the damage can be irreparable. Existing clients and partners are unlikely to want to associate themselves with your business and potential clients will not want to do business with you. And when it comes to recruitment a poor safety record will also make it difficult to hire quality staff who expect a certain level of care from the company they work for.


How can your business mitigate against costs?

It goes without saying that your business could be saving an incredibly significant amount of money by avoiding accidents and creating a happy healthy and productive workforce. You might think that investing in health and safety measures is expensive, but in all actuality the costs of compliance are substantially lower than the costs of fines and prosecutions! As a business owner it’s important that you understand your legal responsibility and adopt strong safety leadership to filter down through the chain of command, ensuring that all leadership levels are following health and safety legislation. Creating a positive safety culture, carrying out risk assessment, implementing appropriate and reliable safety equipment are all good first steps to take to creating a safe and healthy environment for your workforce. Companies who focus on putting in place good health and safety policies and preventing accidents can reap the rewards of having a safer and more secure working environment for their employees, as well as enjoy increased staff morale, greater productivity and a stronger reputation. We pride ourselves on keeping health and safety training simple. Keeping training current and up to date is vital to ensure that the highest workplace safety standards are maintained. ETD’s training portal has been designed with both employers and employees in mind by ensuring that full records of an employee’s training and results are kept and accessible by the employing organisation. 

Courses are available via three avenues: 

• Directly from ETD Training, providers of online health and safety training based in Shropshire. 
• Via your own Health and Safety or other consultants (Get them to register as a Referrer/Distributor 01588 641915 or visit our website
• Via your own branded Online training system with your own organisation’s branding/logo and branded certificate. It’s quick, thorough and cost effective and causes minimum disruption. 

Contact us to see how we can help.