The Business Case for Safety
In our industry there are several measures of success used to evaluate a project upon completion. Some of these measures include:
- Meeting the customer’s objective
- Turning over a quality product
- Completing the project within the approved schedule and budget
- And many more…
Undoubtedly, the single most important measure of success, from both the customer and contractor, is completing the job without someone getting hurt. Why is it always about HSE? The goal, first and foremost, is to get each employee back home to their family each night. However, for all organizations alike, there are many added layers from a business perspective that make HSE excellence imperative to their success.
Customer Perception
When stepping into a new situation, we use our own perspective to immediately form first impressions. It’s human nature. What is the first thing that you take note of when you step into a plant? General plant condition? Cleanliness? Operations interest in your activities? Although you can’t tell from the surface whether or not the plant meets all of its operational goals, EPA requirements, or OSHA targets, you will leave with your first impression. These are not soon forgotten.
Now consider a customer stepping onto a construction site for the first time, what are they taking note of? Barricades well maintained? Everyone wearing gloves to handle material? Working scaffolds clear from tools and debris? Accessible locations for water and trash? All these things define how we manage and operate our projects. If we are getting the basics right, confidence is instilled that the less visible components are also being handled appropriately. All team members may be doing exactly what they need to be doing but for a customer who may only spend 5-10 minutes on-site, they will form their first impression from what’s on the surface (i.e. general housekeeping and PPE usage). Good housekeeping is integral to a safe job-site. It shows a level of respect to the customer that we care about the opportunity to work together with them at their facility.
Business Model & Why It Matters
For example, as an EPC Contractor serving the Gulf Coast region, there is a finite number of industrial facilities which have the project types that we execute, many of which owned by the same company. We currently provide services to a large number of these customers and our business model is dependent on repeat business. Projects with repeat customers are generally more profitable because you are familiar with their requirements which allow you to work more efficiently. This, in turn, allows contractors to optimize their bid which also results in greater cost savings for the customer. It’s a win-win. If the perception exists that a contractor cannot work safely, repeat customers will turn into previous customers.
Most customers have a distribution network that automatically emails out incident reports from a project site to various levels of management. In cases where a contractor has continued events or incidents on-site, a customer’s upper management team receiving these notifications of HSE incidents will form their perception that contractor, likely without even meeting their team. Unfortunately, these perceptions are almost impossible to revert and will negatively affect the ability to work at their facilities.
Business Development teams work extremely hard to build relationships with new customers. Since building confidence and trust can take 1-2 years before quality projects start rolling through the door, it is increasingly difficult to replace valued customers. Part of the pre-qualification process for new customers is a review of HSE statistics, hence the importance to work safely to keep numbers such as EMR and TRIR down. It is important to continue to consistently demonstrate to customers that creating an atmosphere that fosters safe work is simply how business in this industry is done.
