Good Health & Safety. The true financial cost of non compliance!

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Good Health & Safety. The true financial cost of non compliance!

For some reason when you mention compliance in a workplace setting, one generally thinks of mandatory health & safety compliance. Compliance however is much more than a health and safety matter because a lack of compliance with any system and procedure will (without exception) have a significant negative impact on any organisation. The true financial cost of non compliance can be staggering and yet is one that is rarely quantified in any great detail.

Whilst a workplace fatality is a terrible and very tangible occurrence, most companies can’t seem to relate to, or quantify how much an impact, such an occurrence will have on their workplace. In fact it is very often dismissed as something that shouldn’t be discussed. Maybe this is a superstitious type factor adopted by organisations but if the true cost of such an incident were to be discussed and understood, then health and safety would take a far greater role in organisations today.

Even when we look at work-related illness and injury, there is typically an overemphasis on tangible costs such as an increase in insurance premium and any outgoing legal costs. In fact most times that such a topic is raised around a boardroom table, it tends to be as a result of historical incidents rather than on any proactive study that could drive a greater emphasis on compliance and training. This is probably because the largest financial outlay tends to be covered by insurance and as such doesn’t get much airtime around the boardroom table.

The reality however is that the intangible are far more costly to an organisation and these are the ones that are rarely quantified in a proactive fashion. Most companies (particularly the larger companies) believe that the benefits associated with implementing compliance, far outweighs the costs. Intangible benefits of compliance with a strong financial impact include:

  • increased productivity and reduced lost time because employees are healthier, happier and more motivated,
  • reduced rework associated with “right first time” errors or non conformances,
  • reduction in the chances of a loss of reputation (internally or externally) when compliance has been compromised,
  • reduced waste,
  • reduced legal fees,
  • reduced unforeseen costs such as fines or any matters associated with invalidation of insurance or non insured activities,
  • reduced management time taken assessing and managing incidents,
  • improved ability to recruit and retain the very best of talent,
  • reduced likelihood of conviction both corporately and of directors personally.

Fundamentally our belief is that the financial department, the quality assurance department and the health & safety department must collaborate to truly influence best practice that makes most commercial sense.

We would even recommend that a full business case is completed to show, not just the the cost or reaching compliance but also the true cost of non compliance.

We also recommend that the role of the health and safety person be reassessed to ensure that this valuable resource doesn’t spend the vast bulk of their time training the same thing over and over again, rather than focusing on more higher value add activities.

The reality for business is, that the real costs lie, not in compliance, but in non-compliance. The difficulty arises when corporates try to achieve a standard level of compliance across multiple departments or multiple sites. It becomes even more difficult when hiring new employees or when new policies are introduced.

We are finding that the health and safety resource is spending more and more time training and less time on achieving the more strategic and important issues. The resources just simply aren’t there. That’s where a company like dulann can help.

About Dulann.

Dulann is a provider of technology-enabled learning solutions for many of the world’s leading organisations. Services include Product & Process Simulations, Contractor Inductions & Employee Onboarding, Mandatory & Commercial Training, Contractor Management & Learning Management Systems.

Why not start your journey by visiting now.


Damian is a Senior Consultant, Interim Manager and Talent Adviser with specialist experience in the Construction & Technology sectors. Please feel free to contact him directly on 0879218616 for a confidential conversation.

You can also follow Damian on Twitter for an alternative view on life.