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Budgeting for Workplace Health and Safety

Productivity Vs. Safety

 

Managing health and safety is an important part of good business management, yet often seen as a ‘cost’ to a business.  Although some initiatives require little or no capital expenditure, effective management of WHS does require money to be spent.  In this article Jo Kitney explains the importance of making good business decisions on budgeting for health and safety.

 

 Budgeting for Health and Safety

Health and safety legislation is very clear in the requirement to manage hazards and risks and meet obligations. Whilst taking action for health and safety is essential, it’s naive to think employers will spend money on anything that is not justified.  Every business manages its health and safety differently – some invest in management, some integrate WHS into quality, environment or wider business management, some go beyond compliance and promote health and wellness, whilst some do very little and then react when accidents happen.

Any money spent in a business is an investment and WHS must be treated the same. That’s not to say that money shouldn’t be spent, just that the purpose must be understood and budget allocated accordingly. This is particularly relevant in Australia’s competitive economic climate.

In its simplest form, budgeting means deciding what outcomes are needed, the actions that will be taken and allocating money for this.  This ideally happens in an organisation’s business planning and budget cycle and includes costs such as personnel, personal protective equipment, training courses, fire and emergency equipment, servicing of equipment etc.  Contingency may also be allocated to deal with issues that may arise.

Goals, Targets and Plans

Senior management’s approval of goals and targets is fundamental to ensuring good decision making, allocation of resources and return on investment.  Goals and targets are the ‘must –do’s’ and outcomes needed to ensure WHS obligations and business needs are met.  They should address risk areas and provide the base for the WHS Action Plan, which in turn delivers on the goals and targets.  From experience, a lack of resources (and the right type of resources) is a common reason for WHS needs not being met.

Resourcing for Health and Safety

The decision on whether a budget will be provided for WHS may not be clear cut, this may be objective (or ‘above the line’) as well as values based (‘below the line’).  Both of these matter, particularly when faced with the challenge of balancing business needs, budgets and personal views and attitudes towards health and safety.

Resourcing to meet obligations

A fundamental step in determining a budget for WHS is to understand legal duties and duty holders.  Some sections of WHS legislation are common across organisations, such as consultation and communication, and others relevant to a particular business or work activity.  A WHS audit or review is a good starting point in determining requirements and the actions and budget needed to meet this.

Beyond Compliance

Going beyond compliance can help move WHS from a ‘have to do’ into the way the business thinks and behaves. This may mean gaining accreditation for health and safety, positively promoting wellness at work or linking WHS to other parts of the organisation such as people management and planned maintenance.  Although this requires some investment, if managed well there can be a good return for the organisation.

Business Cases

There are times when a business case is needed to determine best use of money and get management approval. Businesses need to make a profit to survive and business cases are a common way to present information on the costs and gains of taking action. Benefits should be wider than just meeting obligations and whilst a risk assessment provides a good foundation, the business case must include business-oriented information that resonates with managers and decision makers.

Putting a good business case together involves working with others and should be looked at from as many angles as possible. This will inform costs and benefits and add credibility to the information provided. It is fair to say that those who do their homework, identify aims, costs and gains and speak the language of business are more likely to attract resources for WHS initiatives.

Values, Beliefs and Attitudes

Meeting WHS obligations is a moral as well as legal obligation; however values and beliefs of decision makers can be the difference between WHS being funded – or not.  There can be differences between individuals and between or within organisations, with decisions influenced by how decision makers think and feel.

Funding WHS will often mean looking ‘below the line’ at the value base, particularly when requests for funding and business cases are rejected or left unanswered. It can be difficult, but there are times when decisions have to be challenged, to ensure those making decisions are aware of the implications for the organisation as well as themselves.

Priorities may change, but values should be constant.  Elevating WHS to a value and not just a priority can ensure it is part of the company’s conscience and an intrinsic part of management behaviour and thinking.

External Sources of Funding

When looking for budget for WHS it’s worth looking for external sources of funding, such as government grants. These may be specifically for WHS or for building business capability, either way by making use of external funding it can gain attention and support from within the business. Internet search can identify these types of funding.

Jo Kitney is the Managing Director of Kitney Occupational Health and Safety, providing health and safety expertise across a range of industries.   You can contact Jo at www.kitney.com or call us on 1300 773801.

 

 

 

About the Author

Safety Concepts is an online resource providing up to date insights and covering issues in the field of Workplace Safety.

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