How Risk Assessments Save Your Business Money

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Risk assessments often seem like a drain on time, resources, and valuable manpower. However, the investment of these three elements can save your business thousands (if not potentially millions) of dollars in fines, lawyers, and sick leave.

If your business doesn’t perform regular risk assessments as part of your safety management system– carve out the time in your schedule to book one in. Risk assessments, alongside safety audits, have numerous benefits to your business.

#1. Risk Assessments reduce workplace incidents and accidents

Workplace injuries, incidents and accidents cost businesses thousands. Not just in money from worker’s compensation, but in the time an employee is off work.

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Source: Safe Work Australia

Workplace health and safety is improving year on year, however, businesses need to take proactive steps to reduce the chance an employee has an accident in the workplace. Safe Work Australia estimates the cost of workplace injuries and diseases in 2012-2013 as 61.8 billion dollars – of which businesses pay roughly five percent. This translates to $3.9 million paid for by businesses across Australia.

Risk assessments, safety audits and inspections can help your business identify areas to improve procedures, signage, or training. Using these safety management tools will help you create a safe and healthy workplace with a reduced rate of workplace injuries.

#2. Risk Assessments reduce and prevent the likelihood of fines, lawsuits, and penalties

There is nothing more daunting to a business than the prospect of legal action being taken against them. It only takes one traumatic workplace injury to damage a businesses’ bottom line – and it’s certainly not worth the risk. Every business must abide by their State’s WHS legislation – it can be a costly exercise if your business doesn’t comply with regulations.

Workplace OHS lists the cost of the fines below:

  • If charged with a category 1 — reckless conduct offense under the WHS Act 2011 (NSW), your organisation could face a maximum penalty of up to $3 million, in addition to the maximum penalty of $600k and/or five years jail for individuals such as a PCBU or an officer of the PCBU.
  • If charged with a category 2 — high risk offense under the WHS Act 2011 (NSW), your organisation could face a maximum penalty of up to $1.5 million, in addition to the maximum penalty of $300k for individuals such as the PCBU or an officer of the PCBU.
  • If charged with a category 3 — breach of duty offense under the WHS Act 2011 (NSW), your organisation could face a maximum penalty of up to $500k, in addition to the maximum penalty of up to $100k for individuals such as the PCBU or an officer of the PCBU.
  • If charged with a failure to comply with a prohibition or improvement notice under the WHS Act 2011(NSW) your organisation could face a maximum penalty of up to $500,000 in addition to the maximum penalty of up to $100,000 for individuals such as the PCBU or an officer of the PCBU.

Failure to comply with these regulations also creates the additional risk of your employees getting injured in the workplace, which also has a cost to the business.

Risk assessments help a business evaluate the process and procedure and determine if anything else should be taken into consideration. They create a valuable opportunity to improve the process, outside of a formal internal audit.

There is never a bad time to improve a procedure, particularly when your employee’s health and safety is at risk.

#3. Risk Assessments improve staff morale, which in turn improves productivity

We’ve mentioned in our previous blogs the value of happy staff. Staff who know their employers have their best interests at heart are far more likely to be better employees.

When your staff are happy and safe, they’re productive. Regular risk assessments help create streamlined systems, which also improves workplace efficiency. Whilst the system may require some legwork to get up and running, a well-running safety management system will ensure your staff members know how to identify and eliminate risks, reducing their chances of workplace accidents. Staff will also have a higher morale knowing they have been trusted with an important responsibility and will be a valuable resource for improving your safety management system.

Contact BusinessBasics today for more information on conducting risk assessments and developing a safety management system for your business.

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