If we think of the economy like the tide, we know that for every flow there is an ebb. Although we can’t predict the size or timing of each ebb and flow, we are better prepared to weather financial ups and downs when we anticipate both and plan accordingly.
When the economy tightens, we might live without some personal luxuries. Maybe we give up dining out, have staycations instead of vacations, and rent movies instead of going to the theater. We might shop for lower-cost services that still provide the necessities to get our must-dos done right. In business, some companies might even go through hiring freezes or discontinue low-selling products or services. Pulling back on expenditures makes sense (and dollars and cents) when the economy ebbs. Except, that is, when it comes to safety.
Workplace safety is one area where it is never a good idea to cut corners. Particularly in heavy-duty industries, investing in the right safety protocol and technology is a must for two reasons: First and foremost, when you purchase safety solutions tailored to fit the needs of your fleet and workforce, you save lives. Second, when you equip your fleet and employees with safety technology and training, you save money.
We’re talking a lot of money.
The return on investment (ROI) for safety technology is high. When you add up the direct, indirect, and intangible costs that are incurred when a collision avoidance safety system is not in place it’s easy to see why it costs less to invest in long term safety technology.
Consider this: When you determine the real cost of an accident, the obvious factors are the direct and indirect losses. Property damage, workers’ compensation, medical costs, legal fees, and impending lawsuits all fall under direct costs. Indirect costs include equipment and worker downtime, insurance increases, and a change in management’s focus. But one area is often overlooked, and the costs associated here sometimes have the highest price tag.
Intangible costs are those directly linked to the reputation of your company. When you don’t have systems in place to keep your workforce safe, and preventable accidents occur, the attitudes and opinions of employees, customers, and the public toward your company can take a serious nosedive. If people don’t want to work for you or do business with you because you cut corners in safety, that cost can be severe and hard to recover from.
Still wondering if loosening the purse strings on safety in a tight economy is worth it? Here’s a real-world ROI example: Say you average three workplace accidents per year at a cost of $10,000 per accident. When you multiply that by the number of years your vehicles are in service—say eight—you have direct costs of $240,000. Put safety technology in place, like the collision mitigation solutions, and you get an 85% reduction in accidents, just like that. That brings us to a reduced direct cost of $204,000. You also get a catastrophic accident cost avoidance savings of $2-4Million (when you calculate at least one catastrophic accident over 10,000,000 hours of vehicle service).
When you add those numbers together, accidents can add a minimum of $2,204,000 to your liabilities. Subtract the investment (say, $100,000) in fleet safety technology, and you get an ROI of $2,104,000. That’s some serious return.
With this example in mind, ask yourself if it really makes sense to cut back on or avoid acquiring safety solutions that mitigate preventable accidents. The cost savings are obvious when you take the leap and invest in safety. And the smiles on employees’ and their families’ faces when they reunite each night after work are priceless.