Safety Pays for Small and Medium Sized Manufacturing Businesses

Guest blog post by Patrick Showalter, Director, Office of Small Business Assistance, OSHA

Many small- and medium-sized manufacturers could benefit from understanding how workplace safety and health significantly impact their bottom line. The Office of Small Business Assistance within the Occupational Safety and Health Administration (OSHA) in the Department of Labor offers a no-cost service, which MEP Centers could pursue with their manufacturing clients.

The human cost of preventable workplace injuries, illnesses, and deaths is incalculable. However, according to the 2012 Liberty Mutual Workplace Safety Index, the direct cost of the most disabling workplace injuries and illnesses in 2010 amounted to $51.1 billion in workers compensation costs, almost one billion dollars per week. Unsafe and unhealthful workplace practices impact businesses financially in many different areas including workers’ compensation claims and premiums, loss or downtime of employees, loss of inventory and equipment, and safety violation fines.

Using a confidential and free onsite consultation service largely funded by OSHA , small- and medium-sized employers can find out about potential hazards at their worksites, improve their occupational safety and health management systems, reduce their injury and illness rates and improve their bottom lines. The On-site Consultation Program is delivered by state agencies or universities using highly skilled, well-trained professionals. On-site consultation projects are located in all 50 states, the District of Columbia and several U.S. territories. On-site consultation services are separate from enforcement and do not result in penalties or citations.

The On-site Consultation Success Stories webpage features many companies that have dramatically reduced workplace injury and illness rates with assistance from consultants representing the program (see the full story). These companies have also discovered that safety pays, as illustrated by the following excerpts from some typical Success Stories:

• Quality Associates Inc., a consumer product packaging company employing 146 workers in Brown Summit, N.C., contacted the North Carolina Department of Labor (NCDOL) On-site Consultation Program for assistance in reducing injuries and illnesses at their worksite. During the initial consultation visit in 2008, the consultant identified a variety of safety hazards and provided guidance on critical elements of an effective safety and health management system. The company corrected each of the identified hazards and established daily safety audits. They also replaced outdated equipment, completed hazard evaluations on all equipment and job activities, and began holding daily company-wide conference calls where safety issues are addressed.
  • As a result, Quality Associates was able to reduce workplace injury and illness rates by 80 percent from 2008 through 2012, and experienced a 22 percent reduction in their Workers Compensation Premium over the same time frame. The company was accepted into OSHA's Safety and Health Achievement Recognition Program (SHARP) in February 2010, and renewed this status in August 2012. Safety manager Nadine Case noted, "Thanks to the N.C. Department of Labor Consultative Services Program, we are sending our employees home every day the same way they reported to work... INJURY FREE."

• In 2011, King Plastics Corporation (North Port, Fla.) contacted the On-site Consultation Program in Florida (SafetyFlorida) in an effort to reduce the company’s injury and illness rates. The company corrected all identified hazards identified by the consultants and King Plastics developed a top quality safety and health program.
  • These efforts, coupled with measures taken to identify and prevent future hazards helped King Plastics to reduce their Total Recordable Case rate (TRC) from 6.36 in 2011 to zero in 2013. The average TRC for the industry was 4.9 in 2011 according to BLS published data on workplace injuries and illnesses. The number of workplace injuries also fell from seven in 2011 to zero in 2013. The dollar value of workers compensation claims decreased from $119,000 in 2011 to zero in 2013.

• ALMACO is a family-run enterprise located in Nevada, Iowa. The company manufactures agricultural research equipment used in the development of improved hybrids and varieties throughout the world. Prior to working with the Iowa Bureau of Consultation and Education (Iowa Consultation), ALMACO’s injury and illness rate was over 3 times the national average for companies in their industry.
  • By 2010, approximately 10 years after initiating a relationship with Iowa Consultation, ALMACO had lowered its incident rate to less than half the industry average. In addition to the positive impact these improvements have made in the lives of ALMACO workers, the company also has experienced financial benefits that have resulted in increased revenues and profits. Since 2005, ALMACO has experienced a 37 percent reduction in its workers compensation insurance modification rate, and a 79 percent reduction in its employee turnover rate. In 2010, workers compensation premiums dropped from approximately $262,000 in 2009 to $218,000. (see the full story)

Companies that have worked with the On-site Consultation Program benefit from the experience in numerous ways. For many small employers, an additional benefit to receiving assistance is acceptance into OSHA’s Safety and Health Achievement Recognition Program (SHARP). SHARP recognizes small employers who operate an exemplary safety and health management system. Acceptance into SHARP by OSHA is an achievement that singles out a business amongst its peers as a model for worksite safety and health. Upon receiving SHARP recognition, a worksite is exempt from programmed inspections during the period that its SHARP certification is valid.

The concept that safety pays is important; however, as emphasized by Christian Clem, President of Operations at ALMACO, "It's not about dollars and cents; it's about people's lives. It's about showing up for work in the morning and going home at the end of the day in the exact same status.”

For more information visit OSHA’s On-site Consultation Program webpage.