Safety programs cost money. A big part of the safety director's job is to persuade upper management to invest the necessary resources to prevent illness and injury. To you, the benefit of protecting health and safety might seem worth paying any price. But that's not the way CEOs and CFOs see it. Corporate management demands and is entitled to expect discipline on the cost side. Let's discuss how to deliver it.

Controlling Costs

The first step in cost control is to analyze your current safety budget. How much are you paying for safety equipment like safety glasses, goggles, boots, gloves, acid suits, flame resistant clothing, hard hats, hearing protection, emergency medical equipment, etc.? What are your costs for capital equipment such as sprinkler systems, firefighting equipment, training courses, upgrades identified from insurance audits, etc.?

Once you identify all of your safety expenditures, try to determine a more efficient way to spend your budget dollar. For example, ordering medical supplies and stocking first aid cabinets yourself might be cheaper - and more effective - than relying on an outside contractor to maintain supplies for you.

Another way to exercise cost control is to include non-capital expenditure items in your safety budgeting. Items that involve little or no financial support could include working with engineers to help design a safety interlock or a machine guard, or doing field evaluations yourself rather than budgeting extra manpower expense. Coupling an extensive safety budget with such clearly beneficial low-cost actions may help your department avoid being labeled as wasteful or indulgent.

Use Standards to Your Advantage in Budgeting

Once you identify your costs and show that you're taking steps to control them, the next step is to tie the budgeted items to an applicable standard. These standards spell out almost everything required to make facilities safe. Compliance with these standards is the reason that many safety and health managers are hired.

Use the standards to your advantage. Show that everything you do is directly linked to compliance. If upper management elects not to approve certain items, remind them of the specific compliance justification for the item.

In addition to legal standards under OSHA, EPA, etc., there are voluntary standards like ANSI, NFPA, NEC, UL and National Electronics Manufacturing Association (NEMA). Also consider industry-specific standards such as those developed by the American Petroleum Institute (API), Chemical Manufacturer's Association (CMA), Synthetic Organic Chemical Manufacturer's Association (SOCMA) and the American Institute of Chemical Engineers (AIChE).

Get Management to Sign Off

I suggest that you provide a list that requires top management to sign or initial for every budgeted safety item (on the proverbial bottom line) whether to spend the money or accept the risk of not spending the money. In the Tools section of SafetyXChange, there's an illustration of such a sheet for a specific budget item: Level A suits for HAZMAT.

Conclusion

Next week I'll conclude this series with a look at how to use financial and engineering principles to build your business case for safety.

WORKING TRENDS

Retired women are more financially vulnerable than retired men

Retiring Women & the Threat of Poverty

By Glenn Demby

The fear of outliving one's assets. It's the nightmare faced by any person who retires. Women are almost twice as likely as men to face old age in poverty, according to a new study from the AARP. And, as women age, their risk of poverty increases.

Why Women Are More Vulnerable

Because women live longer than men, they're more likely to experience the loss of their spouse and live alone in old age. And elder people who live alone are more financially vulnerable than those who live with a spouse. According to the AARP, in 1998 to 2000, nearly 40% of women 65 and older were unmarried and living alone, as compared with only 16% of men.

In addition, the poverty rate for African American retired women was three times higher than for white women (42% vs. 14%). One reason for this is that the former are much less likely to be married when they retire.

Future Prospects

The good news is that the risk of poverty during retirement is likely to be less pronounced for future generations of working women. Retirement income for younger generations of women, the AARP study found, will be based more on their own earnings and less on their spouse's. This should help reduce the financial vulnerability of widowed, divorced and unmarried retirees.

In addition, because they will have a longer continuous record of working, retired women in the future are likely to have higher income from Social Security and pensions.

Source: "From Work to Retirement: Tracking Changes in Women's Poverty Status," AARP Public Policy Institute Paper #2008-03

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