When setting KPIs it is natural to think of financial benchmarks, such as net profit or profit margins.

While these are instrumental indicators of a business’s success, there is another KPI that is often overlooked. Regardless of industry, safety is essential and there should be at least one dedicated KPI to represent this. The specifics of this will largely be led by the particulars of the organisation but could include the number of recorded incidents or average employee overtime. 

There are multiple reasons why it is so important to have a safety KPI, including the following:

Employee Welfare

Working in an unsafe environment is very stressful, and as a result, can have serious implications for an employee's physical and mental welfare. From anxiety to increased accidents, nothing good will come out of working somewhere that does not take safety seriously. It goes without saying that everyone is entitled to work somewhere they feel their welfare is being prioritised above all else.

This in turn can have long-term negative consequences that may affect staff for the rest of their lifetime. Not only that, but it is highly likely that this will have a knock-on effect on productivity too. 

Financial Implications

While we often associate safety with well-being, there are a whole host of financial implications if it is not taken seriously.

Staff Turnover

As mentioned, employee satisfaction strongly correlates with safety. Therefore, staff turnover is likely to be significantly higher if a company has a bad track record. This will result in increased recruitment costs and lengthy hiring periods. Not only this, but training costs will also increase. 

Temporary Cover

If staff are often off work due to preventable safety incidents, many companies will be required to pay for temporary cover in order for production to not be disrupted. This, alongside covering sick pay, can result in significant financial strain.

While some companies may choose to forgo temporary cover, this can often have even more detrimental impacts, as it may result in fines from suppliers due to late order fulfilment. 

Legal Costs 

When an accident happens, if it is caused by a company’s lack of safety measures, employees may be eligible to make a claim, which can result in costly legal fees and potential pay-outs. 

Reputation

For many businesses, external investment and collaborations are instrumental for growth. However, this is far harder to secure if the organisation has a reputation for poor safety management. When deciding whom to work with, most organisations will conduct thorough research, and high accident levels will cause alarm. 

Many companies may choose to include their impressive safety statistics in their marketing strategy, showcasing it to potential employees, customers, and investors.