Task 19: Cost Benefit Analysis of Safety aspects

 Task 19: Cost Benefit Analysis of Safety aspects

Work, health and safety is extremely crucial to adopt, and the funding relating to this should not be necessarily skimmed as the cost benefit of safe engineering could essentially decide the performance of an entire organization in the long run. Therefore, the aspect of amending safety measures in the workplace to provide a safe environment is what the team at Navitas Professional Services strives for. 

Cost Benefit Analysis is a methodology for valuing costs and benefits that enables broad comparisons to be made and imposes an accounting framework that prescribes classes of benefits and costs to consider, means to measure them, and approaches for aggregating them. It's basically the monetary or safety valuation of the risk of performing a task vs. benefit of performing the task. The advantages and disadvantages of following this analysis are provided in the following two paragraphs.

One of the advantages of performing a cost benefit analysis is the ability to recover costs from health care and workers compensations costs as illnesses, injuries and fatalities decline. Companies that invest consistently in safety realize positive bottom line results, reduced absenteeism, lower turnover rates, higher productivity, increased employee morale and a positive brand image. The direct benefits of performing the analysis include: costs savings, saving of time, expenditure on medical care, reduction in the costs of accidents, reducing insurance premiums, reducing litigation costs, reducing sick costs, improving production, productivity rates, lowering accident rates, and reducing material damage.

The initial costs of implementing safety measures and hiring safety consultants might be insurmountable for start-ups and small companies; which can initially be seen as a disadvantage (although this cost can still be recovered over some period of time). Implementing the right safety measure is important; and sometimes the consultants might not get it right, which could cost the company financially and public relations could be strained. 

The main advantage of performing a cost benefit analysis is the ability to gain clarity in unpredictable situations. The act of defining and listing these costs is a valuable exercise, forcing you to identify and evaluate each upcoming expenditure. Organisations will be able to gain benefits such as increased overall productivity and quality of the products over a normal financial life cycle; and therefore, implementing Cost Benefit Analysis in every organisation is beneficial in the long run, and hence recommended. 

Ramandeep Singh