Establishing a safety culture: Key success factor

Tips for agents and brokers to share with their contractor clients before the project begins

By Michael J. Moody, MBA, ARM

While most industries have had to implement hiring freezes and cut back on existing positions, the construction industry was among the hardest hit, shedding more than 2.2 million workers between January 2007 and January 2012.

Now that the construction industry is beginning to show signs of renewed growth, contractors are finding it difficult to locate skilled workers. There's a workforce shortage, and the dearth isn't expected to go away any time soon. According to the Construction Users Roundtable, by 2017, there could be a shortage of more than 2 million construction workers.

Those contractors who are able to bring new or experienced workers on board have an opportunity to establish a proactive safety culture, according to ACE USA. ACE points out that since construction is such a high-hazard industry, an investment in safety can provide real benefits. In its latest white paper, "Building a Proactive Safety Culture in the Construction Industry," ACE points out that "a safe work environment keeps skilled employees on the job and projects on track by reducing accidents that result from injuries." The white paper also suggests that a proactive safety program reduces the risk of litigation and regulatory action. From the macro standpoint, a strong safety record enhances a company's reputation, makes it more competitive, and ultimately helps manage its insurance cost.

Specific steps to improve safety

In order to develop this culture, ACE offers a number of steps that contractors should consider. Among the more important ones is that any successful, proactive program needs to start at the top. "Safety on the job site starts in the executive suite," they say. ACE also notes that safety must become a core value of the organization. On a larger scale, they say "the construction industry is starting to see a shift from strictly compliance-driven safety programs to those that emphasize the 'human side' of safety and stress the health and welfare of workers."

The white paper suggests that the safety culture should not be limited to only the company's employees, but should also extend to any and all subcontractors that the company intends to work with. ACE recommends that safety history and performance become a routine part of any contractor's pre-qualification process, which would also consider the subcontractor's level of experience for the specific type of project and their financial strength.

Proper training for workers is another essential step, ACE says, and it should not be limited to new hires. Training specific to each new project should be provided. The white paper acknowledges that the construction industry has a high concentration of immigrant and non-English speaking workers. "Where English may not be the commonly understood language, construction firms need to address the issue of effectively communicating safety and job expectations," ACE states. The U.S. Department of Labor cites language barriers in industries such as construction as a factor in ensuring workplace safety. "A company with a large number of Spanish-speaking employees may need to provide training in Spanish so that workers can thoroughly understand it," ACE advises.

While injuries can occur in a number of different ways, falls represent one of the major problems within the construction industry. ACE indicates that in 2011, about 35% of the fatalities in this industry sector were due to slips and falls. However, simply following the OSHA guidelines and local regulations is not enough. The white paper proposes that contractors develop a uniform set of fall management procedures for all workers and make that program part of project pre-planning. "At a minimum, the plan should address each task where a fall exposure exists; the hazard associated with the task; and the controls that will be implemented to mitigate the exposure and the safety training that will be provided to each worker. The plan should also address retrieval procedures necessary to rescue workers should a fall occur," the white paper states.

Another step contractors can take in creating a safer job site is actively combating substance abuse. Among 19 major industries, construction had the second highest rate (13.7%) of illicit drug use, behind accommodations and food service (16.9%). "Testing may identify workers with substance abuse problems before they endanger others and enable the contractor to steer them into treatment programs," ACE offers.

ACE construction experts indicate that safety must be an everyday topic. They point out that the traditional weekly "toolbox safety talks" are no longer adequate. Foremen should gather workers at the beginning of a shift to discuss the day's work, review the hazards involved, and the safety controls. They should make sure that workers have the right protective gear and that all safety concerns are addressed. They suggest that periodic safety inspections should be incorporated as well, since they are one of the most effective tools for dealing with the root causes of accidents—worn equipment, misplaced tools or equipment, or unsafe actions by workers.

Additionally, they indicate that a contractor needs to develop a mindset that accidents are not inevitable. For that reason, they say it is important to review all accident and near-miss situations to identify safety failures and prevent future incidents. In order to obtain a complete picture, ACE suggests that project executives should be included in the claims review process with insurers so they understand the financial implications associated with accidents on the projects.

It is also important that contractors use all of the resources at their disposal. This would include working with the safety and loss control specialists from their insurers and agent/brokers. ACE notes that frequently the risk engineers for the insurer and agent/broker can "bring a new set of eyes to a project and can help identify issues that may be overlooked." Additionally, the risk engineers typically have a broader level of experience, having worked with other industries or in different regions of the country. Their depth of experience can often provide useful information regarding specific risks areas that the contactor may not routinely deal with.

Conclusion

ACE notes, "When a construction company succeeds in building a strong culture of safety, it becomes a core value for every employee" and every company wants every worker to go home safe each night. In order to accomplish this goal, contractors need to establish a zero injury policy for their organizations.

As any successful contractor will tell you, a strong safety culture helps to strengthen a company's reputation, "which is one of the most valuable assets for any business, and plays an essential role in its long-term success," the ACE white paper points out. Safe organizations enjoy a number of benefits including fewer losses and lower costs; they also become more competitive bidders. Additionally, they are more attractive to clients as well as to insurers.

Safety assistance is another area where the insurer and/or the agent/broker can demonstrate a value-added service to help the insured develop and implement a proactive safety program. Investments made in the safety area can pay huge dividends in reduced pain and suffering and lower overall employee-related costs. So agents and brokers should always be looking for insurance companies that can assist their clients to improve their safety efforts and reduce their costs, particularly in the construction sector.