Is the Australian OHS Obsession costing it a Safe Future

Ok its a pretty challenging title, but here are some points to make you think.  The following actual example may sound trite but as you read the article – it symbolises the problem facing Australia.

A few months ago one of our staff visited a site, where because of the  nature of the environment special safety boots had to be issued by the client.  The size required was faxed through a week earlier; however on the day the only boots they had were half a size too small.  After a bit of a walk the consultant got a blister, so small that even a toddler would have been embarrassed by it.  The consultant asked for a band-aid to cover the blister – well…..  The resultant fracas of near panic by the clients OHS staff and management, (this is large corporation)  that made the Syrian Conflict look like kids playing Cowboys and Indians in the park next door.

Ok so there was a problem in their internal logistics about ensuring they had the right size available.  But was it worth the estimated 50 hours of management and safety staff time in investigating the incident- time that could have been spent on focusing on the business?  By the way given that the company was losing its competitiveness and hence its future – that management focus was needed.

No one argues with the principal that everyone should work in a safe environment.  But have we gone too far?  Have we created a monster that threatens to destroy our economy, and hence job security and our standard of living and as we will contend postive safety outcomes as well.

Is the Safety Obsession costing us our Standard of Living?

Saul Eslake in his paper The Lost Decade,  points to the reasons why Australia’s productivity has stagnated.

Essentially he argues that over the period, productivity has not been a national focus, of Government, Academia or Business.  Instead – the national focus has been on reducing risk whether to people, property or from corporate behaviour.

To illustrate this consider these three points:

    1. Focus of Government (State and Federal) has been on safety, compliance and standards legislative agenda over a productivity reform agenda for the last decade.
    2. OHS professional job growth mid way through the decade was a whopping 59% compared to other professions at 11%. (source: Safeguarding Australia p3).  And according to a survey OHS salaries are 90% higher than the average salary. Remember every additional OHS or Compliance person employed is an additional resource that adds to the cost base with out adding to productivity improvement.
    3. Finally Australian Business has fallen behind in competitiveness.  For example according to the Eslake report, in many areas Australia is falling well short of the OECD best practise.  The graph below shows just one measure of this fall in competitiveness.   Instead Australian firms are more likely to tinker at the edges with existing products or services.Investment in new products

    Does the Safety Obsession effect New Product Investment  Decisions?

    The Safety Obsession is not just a direct employment cost to business, ie OHS and Compliance staff, but it has too other effects.

    It takes up management time (not saying it shouldn’t) but it also has to invariably inculcate a behaviour of risk aversion.  A risk aversion behaviour that flows into investment risk decision making, such as new products or new markets expansion.

    Keeping it simple, if the agenda item on the management meeting is safety – ie we need to reduce risk and all the subsequent conversation is about risk reduction.  Then it logically follows that if the next agenda item is deciding on risking investment into a new product, the mindset of the mangement team is already set to risk avoidance from the previous safety topic.

    And if new markets and new products are avoided ultimately the businesses competitiveness and sustainability suffers.

    You can not blame business for being OHS obsessive – when regulatory requirements and penalties are so harsh and combined with the constant threat of civil litigation.  So you can understand the management obsession with OHS.

    One highly focused manufacturing company I know decided in order to keep the focus on being globally competitive they would move their production off shore.  This meant management could focus on being innovative in a global market, rather than obsessed with safety and compliance.  That is a sad loss but reflective of the implications when safety becomes an obsession at the expense of everything else.

    Is the Safety Obsession Counter Intuitive to Safety Outcomes?

    Consider these four points:

    1. Dumbing Down Jobs:  We frequently visit organisations that have the most highly documented methods for how to do everything, even to how to put on safety glasses.   The more prescribed the work task,  the more robotic the work task, hence the more boring.  And isn’t it the case that the more bored we are, the more likely we are to have accidents?
    2. Encouraging Unsafe Behaviours:  For example this was explained to us by an old time truckie.  I use to pick up my load, then drive out of town, stop and check my load.  But now because of the fatigue laws, we all put the foot down to the legal limit and don’t stop until we get to five hours.  Because that is when the fatigue laws say we must take our first break.  The point being that before the fatigue laws were introduced the driver use to stop not long after collecting the load to check it’s properly restrained.  Now becuase of the prescriptive fatigue laws stopping so early directly impacts on his legal drive time effectiveness.  We agree with the fatigue laws but the highly prescribed nature had the unintended consequence of reducing load safety.
    3. Cutting Corners:  The low investment in new product development and productivity improvements, inevitably leads to lower competitiveness.  Lower competitiveness leads to job or company insecurity, leading to taking short cuts to reduce costs.  Short cuts that can lead to safety incidents.
    4. Safety is Everyone’s Responsibility but Mine.  Recently we were called in to review the Logistics Risk of a Corporation posed by its major service supplier.  The review found a safety risk in the Logistics Chain from the supplier.  This risk existed despite the Supplier having a large staff of OHS specialists who created a superbly documented OHS system, training and inductions, BUT as far as line managers and operators were concerned – anything to do with OHS was the OHS people’s issue.  Quite simply the operational staff didn’t have a safety culture.  And that is fundamentally the problem – safety is everyone’s responsibility – but as soon as you employ OHS staff people perceive OHS as being out-sourced to them.  OHS should be a core responsibility of both managers and operators, they should “own” safety.

    The Alternative Approach to the Safety Obsession

    The alternative approach to improving safety outcomes is to move the focus to productivity.

    Productivity is in simple terms how effectively does an organisation use its resources to make something (or supply a service)  the market is prepared to buy.

    If the business focuses on productivity, then it needs to find new and better ways to create, make and deliver things the market wants.

    • New ideas, Innovation and Markets.  If the company is focused at all levels on creating new ways – it engages people and by implication makes people more secure and happy.  Which as the example below shows improves safety outcomes.

     In the mid 90’s I took over as GM of a manufacturing company.  At that time it averaged only 3 days between loss time injuries.  When I left 18 months later, it had gone for over 200 days with out an LTI.  I didn’t employ a single OHS person, what I did was two things:

    Created a Future:  Took the company in to new products and markets – this created some excitement and interest. Communicated:  I walked the factory floor every day and listened/ spoke to nearly everyone of the 150 employees over the period of a week.  I stressed the point to everyone you are employed for your head not just your hands.

    In hind sight I think it made people feel that they were part of something and that they were valued in the journey.  Which translated into improved Safety results.  Btw I made some big mistakes too, it wasn’t all roses.

    • Focus on Better Engineering.  The OHS obsession focuses on engineering out the risk in a process without real consideration to productivity (remember lower productivity people are less secure – hence less engaged and so more accident prone).  A productivity focus would look at how to make it better – ie lower cost, better safety.  The immediate reaction of the Safety Obsessionists is that its all about reducing cost not safety.  Ok, that is fair point but the counter would be, safety is a cost simply reducing the direct cost at the expense of safety ultimately increase costs through LTI, payouts, legal fees and insurances.

    Did you know that 67% of all training in Australia Logistics sector is OHS/compliance related training – not productivity improvement training.

    Safety Focus Needs to Be Balanced

    The point that should be taken away from this is that Safety (OHS) needs to be balanced with providing a secure future.  Safety in the workplace is critical – but the workplace needs to be competitive in order to exist.  It needs to be balanced.

    For example we could just about completely eliminate the road toll if the maximum speed was say 10 kmph.  But that would come at an extraordinary loss to the  community and to national competitiveness.  So the authorities attempt to balance speed versus safety.

    It may be time to think about the extraordinary reductions in speed (national productivity / competitiveness) that has been imposed by OHS obsession over the last decade, have we gone too far or not far enough?  Have we created a culture of fear in business management that makes it risk averse to taking risks in new markets, products or process innovation?

    So back to the question Is the Australian OHS Obsession costing us a Safe Future?

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    Mike Wood

    Mike is qualified in both Civil and Mechanical Engineering, with Post Graduate qualifications in Logistics and Business Administration and is a qualified RABQSA/Exemplar auditor. The initial phase of his career involved public roads and transportation authorities in technical and management roles with both VicRoads and the Victorian Ministry of Transport and designed Melbourne’s time public transport system Mike then moved into private industry and over several years, held General Manager positions with major logistics service providers with turnovers in excess of $500 million. As his expertise and knowledge grew he moved into consulting and became Principal Consultant with Dawson Consulting, one of the largest Supply Chain and Logistics consulting companies in Australia Mike is now Managing Director of LATUS Business Solutions, which is a highly regarded Business Improvement practice, operating in 3 major area; • Supply Chain & Logistics design; • Compliance implementation & management; • Risk analysis& Safety management • Leading training provider (RTO) in the area of Lean Logistics & Business He has been a Director of transport and logistics industry associations in Queensland and Victoria.

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