As reported on several news and blog sites in the past several days, OSHA has recently released its preliminary list of top safety violations for 2009.  As stated in the full release on PRNewsWire, which came from the National Safety Council,

The number of top 10 violations has increased almost 30 percent over the same time period in 2008.

“We appreciate our colleagues at OSHA presenting their new violation data to such a receptive audience,” said National Safety Council President and CEO Janet Froetscher. “The sheer number of violations gives us new resolve in raising awareness about the importance of having sound safety procedures.”

So what's up with the 2009 spike in OSHA safety violations? Have layoffs, emotional states, and other fallout from the financial crisis stressed workers to the point of making bad safety decisions? Or have the OSHA inspectors just been especially diligent this year?

So what’s up with this spike in violations? And will this correlate to an actual increase in workers comp claims in 2009, something we suggested might happen when the global financial meltdown occurred? We’re not saying we told you so…we’re wondering along with you what’s going on. Have layoffs, emotional states, and other fallout from the financial crisis stressed workers to the point of making bad safety decisions? Or have the OSHA inspectors just been especially diligent this year? Regardless of the cause, as Ms. Froestscher points out, clearly there’s a need to mitigate this trend.

So, this is a good time to remind you of the WorkCompEdge Safety Training Center, which allows each of a company’s employees to take web-based video courses on desired subjects, answer a quiz at the end of each course, and, if he or she earns a passing grade, receive a certificate of completion for that subject. With over 40 videos on a diverse set of safety topics, including defensive driving, disaster planning, hazard communication, noise and hearing protection, recordkeeping, and more, it’s sure to have something for everyone – and addresses much of the top 10 list of violations. Here’s the list, along with the related video(s):

1. Scaffolding – 9,093 violations
Scaffold accidents most often result from the planking or support giving way, or from the employee slipping or being struck by a falling object.

See the WorkCompEdge Safety Training Center video Scaffolds in Construction

2. Fall Protection – 6,771 violations
Any time a worker is at a height of four feet or more, the worker is at risk and needs to be protected. Fall protection must be provided at four feet in general industry, five feet in maritime, and six feet in construction.

See the WorkCompEdge Safety Training Center video Fall Protection in Construction

3. Hazard Communication – 6,378 violations
Chemical manufacturers and importers are required to evaluate the hazards of the chemicals they produce or import and prepare labels and safety data sheets to convey the hazard information to their downstream customers.

See the WorkCompEdge Safety Training Center video Hazard Communication. Note that there’s a separate Hazard Communication for Healthcare Workers video.

4. Respiratory Protection – 3,803 violations
Respirators protect workers against insufficient oxygen environments, harmful dusts, fogs, smokes, mists, gases, vapors, and sprays. These hazards may cause cancer, lung impairment, other diseases, or death.

See the WorkCompEdge Safety Training Center video Respiratory Protection

5. Lockout-Tag out – 3,321 violations
“Lockout-Tag out” refers to specific practices and procedures to safeguard employees from the unexpected start up of machinery and equipment, or the release of hazardous energy during service or maintenance activities.

See the WorkCompEdge Safety Training Center video Lockout-Tagout – Authorized Employee

6. Electrical (Wiring) – 3,079 violations
Working with electricity can be dangerous. Engineers, electricians, and other professionals work with electricity directly, including working on overhead lines, cable harnesses, and circuit assemblies. Others, such as office workers and sales people, work with electricity indirectly and may also be exposed to electrical hazards.

This violation is in part addressed in the WorkCompEdge Safety Training Center videos Electrical Safety – Unqualified Worker and Arc Flash Safety

7. Ladders – 3,072 violations
Occupational fatalities caused by falls remain a serious public health problem. The U.S. Department of Labor (DOL) lists falls as one of the leading causes of traumatic occupational death, accounting for 8% of all occupational fatalities from trauma.

See the WorkCompEdge Safety Training Center videos Slips, Trips, and Falls and Fall Protection in Construction

8. Powered Industrial Trucks – 2,993 violations
Each year, tens of thousands of injuries related to powered industrial trucks (PIT), or forklifts, occur in U.S. workplaces. Many employees are injured when lift trucks are inadvertently driven off loading docks, lifts fall between docks and an unsecured trailer, they are struck by a lift truck, or when they fall while on elevated pallets and tines.

See the WorkCompEdge Safety Training Center videos Forklift Operator Safety and Introduction to Rough Terrain Forklift Safety

9. Electrical (general) – 2,556 violations
See #6.

10. Machine Guarding – 2,364 violations
Any machine part, function, or process that may cause injury must be safeguarded. When the operation of a machine or accidental contact injures the operator or others in the vicinity, the hazards must be eliminated or controlled.

See the WorkCompEdge Safety Training Center video Machine Guarding

Registration for the Safety Training Center is located in the Download and Online Tools section of the “Four” Safety module of WorkCompEdge. There are several other tools there that may also help improve your company’s safety culture and record, including a safety commitment statement, a safety culture survey, a safety measurement tool, and more.

Let us know what you think about the increase in violations this year, and other ideas for addressing this issue.

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Editor’s note: I recently joined the Small Business Online Community sponsored by Bank of America. Among several interesting articles there, I was thrilled to find a safety guy talking about the workers comp mod. Robert F. Tilley, Jr. is the CEO of SafeTek USA, a company that provides knowledge, supplies, products and services to North American organizations ranging from small residential builders to the US Navy. SafeTek’s vision – “to help create safe and healthful workplaces, where quality is higher, mistakes are fewer, and costs are lower” – is quite similar to the mission of WorkCompEdge, and Robert’s article certainly has some points that should sound familiar to our regular readers. But he also brings the perspective of a safety professional and the business owners his company serves – along with some interesting statistics. The following article may give your company’s management, or your clients, some new food for thought.

If you are not motivated to have an effective safety program by either OSHA, the threat of fines or care for your employees, one thing that will motivate you is the actual cost of a workplace injury to your business.

At a recent speaking engagement for business owners addressing how to implement effective safety programs, I had a question from a member of the audience-we’ll call him Bob. Bob asked why he should invest in safety. He told me he has insurance if an employee gets injured, he has a safety manual, OSHA has never bothered him and the only employee injuries so far have been minor. Why should he do more if what he’s doing now is working?

“Well Bob,” I said. “How much will it cost your business if an employee falls from a roof, and how much have those ‘minor injuries’ cost you so far?” Needless to say, Bob, and everyone else in the audience that day, were quite surprised as we revealed the actual costs of workplace injuries to their businesses. Unfortunately, the only thing most employers are aware of is that they have to spend money to have an effective safety program, and that’s where the train stops. Successful companies, however, maintain very effective safety programs and pay the expenses involved even when business is slow and times are tough.

Most employers maintain some semblance of a safety program at their company, either because they care about their employees or because they’re required to by OSHA. OSHA violations can range anywhere from just a warning, to $70,000 per incident with recent proposed legislation asking to raise fines even further into the range of EPA violations. I would like to think that all employers care about their employees, but often profits come first. What does that mean? It means one thing is certain-all employers care about their company because of the profits derived from it. A for-profit business is created to make a profit 99.9 percent of the time. You carry insurance to protect yourself and your business, you plan ahead to avoid unforeseen costs and cut expenses where they are not needed to ensure you are as competitive as possible while maintaining a good profit margin.

Unfortunately, however, the cost of effective safety measures are all too often deemed an “unnecessary” expense. When business is slow, what is the first expense to get to get cut? You already know: the safety program. Normally the responsibility gets transferred to the HR manager, and training and other expenses are cut, which could really lead to disaster, especially for the new employee you just hired. If you are not motivated to have an effective safety program by either OSHA, the threat of fines or care for your employees, one thing that will motivate you is the actual cost of a workplace injury to your business. So how much does it cost?

Statistics and Costs

Every year in the United States there are over 6,000 workplace fatalities. The greatest majority of these fatalities are men ages twenty-five to forty-four, of which there are approximately 30 million in the United States. That means, using this example, just over 1 in every 6,000 men aged twenty-five to forty-four dies at work each year.

Even with these staggering numbers, this does not include deaths related to occupational illness. Another 50,000 workers die every year in the United States from occupational illnesses due to exposure to a workplace hazard. These occupational illnesses include asbestosis caused by exposure to asbestos, silicosis which can be acquired from concrete cutting operations (and any work involving exposure to crystalline silica dust if not using proper respiratory protection) black lung disease for miners, or brown lung disease for textile workers, etc. (Just an FYI, though not usually fatal, poison ivy is an OSHA reportable illness.)

In addition to deaths, there are over 6 million U.S. workers that suffer non-fatal workplace injuries with an estimated cost to U.S. businesses of around $128 billion annually. A person’s life or health is obviously priceless, but incidents and injuries carry a tangible cost to business, one quarter of each dollar of pre-tax corporate profits, to be exact.

The actual cost of a workplace accident or illness to your organization depends on a few different things. Costs depend on how many employees you have, how many incidents you have, the type of work you do and the value of your materials, products or services. For companies that may be experiencing a tough time financially, any losses are serious. Even for a large employer, losing an employee on a job who is skilled in their trade, for even a few days, can have a much larger impact on profits than the actual direct costs might suggest. With smaller businesses this would be magnified because they often have very little buffer when it comes to accidental losses. A serious incident could not just make it difficult to get by, but put them out of business. In fact, according to a recent study, 60 percent of companies experiencing a serious disruption that lasted more than nine days went out of business.

“But Wait, What about My Insurance? Isn’t My Business Covered?”

Insurance only covers what is detailed in the policy, and it usually only pays for serious injuries or damage. Workers’ compensation does cover all employee injuries, but you will end up paying for the cost of that injury and more-we’ll get into that later. Some of the costs that are not covered by insurance include lost time, sick pay, damage or loss of product and materials, lost time and failure to keep schedule, extra wages for overtime and temporary labor, investigation time and expenses, OSHA fines, loss of contracts, legal costs and loss of company reputation, to name a few.

The uninsured costs differ between businesses, the type of work being done, insurance and type injury. No matter how you look at it, though, the uninsured costs are many times greater than the insured costs. If your business is a ship, costs are like an iceberg. Most of the costs are hidden beneath the surface and are not immediately visible, but you feel it when you run into them. Studies have shown that the insurance premium to uninsured cost ratios for the construction industry generally range from 1:9 to 1:41. That means that for every $1 paid in insurance premiums, the company has to pay an additional $9 to $41 themselves for losses arising from incidents. Another way to look at it-uninsurable expenses often run up to as much as 4 times more than the actual costs covered by insurance.

Workers’ Compensation Insurance

It may surprise even the financially savvy how much you can save on your insurance by being safe. A poor claims record will affect the amount a company pays in insurance premiums. Depending on the number of incidents a company may have, insurance premiums can increase, and coverage may even be cancelled. Insurance companies set a base rate for a particular industry, and the number of incidents you have directly affects how much you pay as your base rate. This is called an experience modifier. Your workers’ compensation insurance premium is determined by this easy formula:

Payroll x Workers’ Compensation Rate x Experience Modifier

Workers’ compensation rates reflect the average claim cost per $100 of payroll. Workers’ compensation rates can take a huge chunk out of your profits if you are not safe. The average worker’s compensation rate for construction is 7 to 8 percent of your payroll, but can be lower for executives, around 2 percent, or 25 percent for more high risk activities. According to the U.S. Census Bureau, construction claims comprise around 21 percent of the total claims for all industries. This is quite a large number considering that only 5.7 percent of the U.S. workforce is in the construction industry.

An experience modifier of 1.0 means your company’s workers’ compensation claims experience is no better or worse than your industry. If you have a lower experience modifier, you pay less.

For example, if your business had a 1.47 experience modifier because of increased incidents and injuries and paid $85,958 in premiums, but reorganized, got serious about safety, and got down to a .82 experience modifier, your business would only be paying $47,950. That is almost a $40,000 savings. That $40,000 with a 9 percent profit margin equates to approximately $445,000 in new business each year!

There are other savings to be had. Many businesses find that by improving workplace safety and health standards, their investments are repaid by improved productivity and efficiency, less employee absence, good company reputation, less turnover and improved quality of work. Tackling the causes of incidents and injuries is not unnecessary overhead, but an investment in your business. An investment in an effective health and safety program is as valuable as any other for your company. The American Society of Safety Engineers found in a recent study that for every dollar spent on a quality safety and health program, businesses saved $8. That’s a healthy return on investment.

An investment into an effective safety and health program for your business is just that, an investment. Not only is it unethical to risk an employee’s health or safety to save money and cut costs, but in reality, it does just the opposite. It creates unnecessary risks, costs and headaches. A safe company with limited incidents and injuries will not only have an increased profit margin, but will be more appealing to potential clients and good employees. Successful businesses plan for the future, for growth and for potential risks. Safety should play a key role in your strategy and is the reason long-term successful businesses invest so much into their safety and health programs, because as I am sure some of you know, gambling isn’t a good long term, or short term investment. Play it safe with safety. You may skimp by for a while, but the house always wins.

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In our local area, a radio commercial for a life insurance company seems to run about ten times a day. In a dramatic voice, the announcer explains that we all need life insurance for the “unforeseen.” It is exactly the “unforeseen” that causes so many of the severe and tragic workers compensation losses that our actuarial firm sees in the the analytical consulting projects we do. 

You CANNOT “punt” on planning and training for foreseeable emergencies and catastrophes – because this is what is going to save you or mitigate damage when the significant unexpected event occurs.

While I sat in traffic recently and heard this commercial for what must have been the 1,000th time, I quickly ran through some of the “unforeseen” things that I’ve personally experienced in my lifetime. Have you ever done this? It is amazing how many things we all must confront in the normal course of life. Here are a few of the highlights for the ones that worked out well for me:

• Having at least 6 trips to the emergency room for injured kids (broken bones, car wrecks, head injuries – oh! the joys of parenting).

• Being the passenger in a high speed car crash. (The car was totaled – I was lucky to survive with recoverable injuries!)

• Having the doctor tell my wife and me that our unborn child had a 0% chance of being born. (The doctor was wrong – the kid is awesome.)

• Living through a house fire. (The house didn’t fare too well, but family did.)

• Confronting a home intruder. (I used my most intimidating primal scream!)

• And my personal favorite, which goes back a while – being chased by the neighborhood German shepherd when I was 8 years old!

Thoughts of these could-have-been disasters brings me to the question: How do you prepare for the worst possible scenario, the unexpected, and the catastrophe that could threaten your business? Some employers believe you can’t prepare and therefore don’t bother. However, I recently got another perspective on this when I had the opportunity to hear Rudy Giuliani speak.

Rudy is a great speaker. Watching him live is very inspiring. He is an effective story teller and, as you might guess, has some pretty amazing and powerful stories to relate. Rudy asked the question, “How do you prepare for the unknown?” Obviously, there was no way the city of New York could have prepared for the 9/11 catastrophe. While I am sure the volumes of studies done on the response find areas for improvement, the city of New York can be proud of how it dealt with this unimaginable scenario.

Rudy shared his theory on this: “Prepare for everything known and you will be prepared for the unknown.” He goes on to describe how the city had action plans for specific disaster scenarios. Each plan was divided into components and each component was then well researched, planed, and rehearsed. One example might be setting up a triage near a large industrial accident. Despite the extensive preparation that the city had undergone for various disaster scenarios, there was no plan for the collapse of the World Trade Center twin towers.

When Rudy arrived on the scene, he began to direct all the city’s departments to pull components of other emergency plans together to create, on the fly, a custom response to the emergency at hand. Because they had planned for everything they could imagine and had their plans compartmentalized into specific function areas, they were able to respond to the unimaginable. While I cannot do this story justice as Rudy so passionately does, I can relate this to the importance of disaster planning for an employer. You CANNOT “punt” on planning and training for foreseeable emergencies and catastrophes – because this is what is going to save you or mitigate damage when the significant unexpected event occurs.

In more recent news, the US Airways captain who successfully protected the lives of his passengers and crew after losing both engines on his Airbus 320 after takeoff probably never trained specifically for so masterfully using the busy Hudson River as an alternative runway. But, if you read his resume you will notice that Captain Chesley B. “Sully” Sullenberger III had, in addition to his training as a pilot, extensive experiences related to safety and risk management. He had practiced, without doubt, thousands of emergency situations over his 40 years of flying. He had studied safety and participated in accident investigations. His training and experience also included glider flying – a handy skill when your Airbus becomes a 160,000 lb glider over one of the most densely populated cities in the country. So what was the payoff for the untold hours of training and emergency drills for theoretical situations that never actually happened? A miracle!

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I recently attended a safety conference sponsored by Occupational Health & Safety Magazine in the Washington, D.C., area. One of the more powerful presentations was conducted by Bob Krzywicki, North America Operations Leader with DuPont Safety Resources.

Safety is about more than programs, and measuring your safety culture is the first step in improving it. To view a WorkCompEdge video clip regarding safety culture, click this link

Most of the safety-oriented presentations I’ve attended over the years have focused on a traditional safety engineering approach, such as “find a hazard and remove the hazard.” Mr. Krzywicki, however, had a different approach. He challenged the audience to think about safety performance as a corporate culture issue. He said, “Safety excellence is a cultural transformation that requires felt leadership.” Felt leadership, as implemented at DuPont, establishes safety as a core business value, starts at the top of the organization, and is felt at every level of the organization through employee involvement and accountability. Read more about DuPont’s felt leadership in this article.

In addition, Mr. Kryzwicki said a safety leadership culture can be measured and improved.

He outlined three components of safety culture used at DuPont: leadership, structure, and processes and actions.

Each component includes four elements which he calls the “12 Gifts.”

Leadership elements include:

• Management Commitment
• Policies & Principles
• Goals, Objectives, & Plans
• Procedures & Performance Standards

Structure elements include:

• Line Management Accountability& Responsibility
• Safety Personnel
• Integrated Organization
• Structure Motivation & Awareness

Process and Actions elements include:

• Effective Communication
• Training & Development
• Incident Investigation
• Audits & Observations

Kryzwicki asked the audience to take a leap of faith and measure their safety culture and leadership performance with perception surveys of managers, supervisors, professionals, and hourly workers. DuPont studies show the better the safety culture score, the lower the number and severity of injuries.

Those of you who are very familiar at all with the content of WorkCompEdge will know that I delighted to hear of DuPont’s experience and certainly think it’s worth emulating. Although WorkCompEdge doesn’t express safety culture in quite the same components and elements structure that DuPont uses, we definitely subscribe to the same message: safety is about more than programs, and measuring your safety culture is the first step in improving it. WorkCompEdge members can start that process today using the survey included in the module Build True Safety Culture – It’s More Than the Incentive of the Month.

I am confident in DuPont’s findings and encourage employers to perform similar assessments of their own safety culture and performance now, before you attempt to polish any rough edges in the culture you may suspect exists. Although it may take some intestinal fortitude to digest the perceptions you uncover, particularly among certain segments of your employees, you need to establish a baseline of your current safety culture at all levels of your organization. Benchmarking is a critical first step to determining where you are so you can decide where you need to go.

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For some reason, the image of Buzz Lightyear, pointing his finger skyward and shouting, “to infinity – and beyond!” comes to mind. For employers, this news is a call “to safety – and beyond!”

As we bring development of WorkCompEdge to a close and prepare to launch this new service, I am reassured by this recent news that our focus with WorkCompEdge is on target. WorkCompEdge provides resources to help you build a safety program – but that part of the puzzle is being accomplished effectively by most organizations. It is the safety culture, supervisor training, wellness push, designation and training of an injury coordinator, a medical clinic relationship, and finally a return-to-work program that is focused and purposeful that really matter. Most employers “get” safety – it is all these other areas where there is significant opportunity for improvement.

Severities are going to be dramatically impacted when companies start putting the implementation plans suggested here into action. We chose to focus less on safety and more on these other issues that do not receive the needed attention and I feel it was a good decision. The opportunity is in reducing severity and we know how to help you accomplish that!

As we like to say on the actuarial side of our business – “a correct analysis of the data leads to the right decision.” My analysis shows safety works in preventing accidents, but if you do have an injury there are at least a dozen things you have to get right. If you can master these other areas you will enjoy happy employees and massively reduced work comp costs!

In the months and years ahead I look forward to sharing WorkCompEdge success stories with you!

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