OSHA Fines Increase – Profitability Impact?

So much for the idea that nothing much happens in the marketplace during August. OSHA fines substantially increased on August 1st with severe citation penalties increasing from $70k to 125k and fines for mere posting violations increasing from $7k to $12.5k per violation.

Though fatalities have been decreasing over the last twenty years, National Safety Council estimates indicate the approximate cost of workplace injuries and fatalities at $140b annually in the US. Check out this NSC infographic.

Critics argue that the correlation between the size and frequency of fines and operating behavior is less clear than the impact of better operating processes on profitability. Paul O’Neill, the former CEO of Alcoa proved beyond a doubt that safer workplaces over time equate to lower operating costs, better margins and better profitability.  

We’ve learned during more than 140 workshops and interviews with our clients and industry experts over the last 18 months that existing OSHA and other compliance processes are broken; in some instances, badly broken. Companies that link safety as a performance improvement opportunity with improving profitability have lasered in on three problems that need to be solved quickly:

1. Legacy LMS (Learning Management System) platforms that make it hard to create, distribute and access content at the right time on any device no longer meet the need
2. Compliance processes that have devolved to “checking the box” instead of improving the underlying behavior and improving the business as a result
3. Escalating compliance costs that make it difficult to invest resources where needed

Actual and incidental costs are substantial to all involved. One longer term and potentially enterprise ending impact is the negative impact on competitive viability. Companies with poor safety ratings and a high incidence of claims may pay 3-400% more in workman’s compensation premiums, effectively resulting in an inability to compete in the marketplace.

Solving these problems enables measurable behavioral changes. Using this approach gets the change to stick. If you’re interested in solving the three problems above, request a demo.