In times like these — when the economy is poor, costs are rising and every one of your competitors is bidding on the job you need to stay afloat — you might be tempted to think that eliminating safety department personnel and cutting back on safety activities will help your bottom line. I and others are here to tell you that it will not.

Let’s start with the positives. Safety pays dividends even if they are not always obvious. Consider for example the following advantages your company will have when bidding on a job if your crews continue to operate with a high level of safety consciousness:

As LD Alexander — Safety Director of RMCI Inc. in Albuquerque, N.M. — can tell you, keeping costs down the safe way in the utility construction industry starts with a safe trench.

• Lower insurance costs included in estimates will give your company a project cost advantage.
  
• Prospective clients look favorably on the reduced liability potential of companies with a good experience modification rate (EMR) and OSHA record.
  
• Having an efficient, safety-conscious crew increases the likelihood that the project will not be interrupted or halted by costly accidents.

If you’re not swayed by the advantages, take a look at the disadvantages. Let’s say your company has invested money in safety personnel and activities. If you let the safety personnel go, the program may continue to work for a little while, but it will eventually begin to deteriorate and accidents will start happening. At that point, your company will be forced to start all over again, and starting over can cost you both time and money. For example, good safety directors are in high demand, so there’s a good chance that you will not be able to rehire the same personnel. In addition to getting up to speed on the special needs of your company, new safety personnel will have to rebuild from scratch the trust and good working relationships enjoyed by the previous safety staff and your field personnel and managers.

With the foregoing in mind, you have to ask yourself if a good utility construction company can really afford to be without a qualified person to take charge of safety activities. To answer that question for myself, I made a few phone calls, and here’s what I found out.

James Humphrey, Safety and Risk Director with Mastec North America in Shevlin, Minn., has a saying: “They don’t pay me for what I do. They pay me for what would happen if I was not here.” He suggests that rather than downsizing or eliminating the safety department and program in slow times, companies should reinforce the program and make improvements so that when the economy turns around they will be positioned to come back stronger.

Greg Strudwick, President of Greg Strudwick & Associates in Coppell, Texas, and NUCA-approved safety instructor, is definite about the domino effect of downsizing safety: “When companies start to downsize, well-trained crews are disrupted and safety is compromised. When safety is compromised, accidents happen, and when accidents happen, the cost of doing business goes up.” His advice is equally succinct: “If you absolutely find it necessary to streamline operations in order to deal with the problems caused by the economy, remember that safety is still of paramount importance to the success of your company.”

Keeping costs down the safe way in the utility construction industry starts with a safe trench. That’s why it’s a good idea to let your safety department take a look at the specifications. The options for meeting them are endless and even the best estimators and project managers can use some help.

When not hard at work teaching confined space entry and other safety practices, Greg Strudwick, President of Greg Strudwick & Associates in Coppell, Texas, is advocating safety on the jobsite: “When companies start to downsize, well-trained crews are disrupted and safety is compromised. When safety is compromised, accidents happen, and when accidents happen, the cost of doing business goes up.”

In that regard, LD Alexander — Safety Director of RMCI, Inc. in Albuquerque, N.M., and NUCA Safety and Risk Management Committee chairman — is quick to point out that RMCI’s management realized early on that the input of safety personnel during the estimating phase can save money without compromising safety, especially on the kinds of unusual projects RMCI often undertakes.

Alexander provided the following example:

On a job that involved placing a 54-in. pipe 22 ft under a busy street, safety personnel suggested a tunnel bore rather than open cut. By reducing the amount of digging and eliminating the need for continuous traffic control and the handling of big trench boxes, RMCI was able to do the work 35 percent cheaper. The other benefit was a safer job for all, including the public. Alexander also believes that the liability exposure was reduced considerably. That ties in with my previous point about savings not always being obvious. What could have happened could have been very expensive.

William Santa, CSP of Alex. E. Paris Contracting Co. Inc. in Atlasburg, Penn., shared with me a pre-qualification questionnaire that his company often has to complete. “Without the proper completion of this, we cannot even get our foot in the door, much less bid on some projects,” he says. “And, as you can see, most of the questions are safety-related.” The form in fact includes questions about everything from a company’s Workers Compensation Experience Modification Rate (EMR) and OSHA 300/300A data to the specific content of the its safety and health program, as well as detailed information on how and by whom it is administered.

Finally, I got the perspective of the insurance industry from Peter Stavros, CSP, CRIS and Sr. Risk Control Consultant for CNA Insurance in Quincy, Mass. He said that companies can lose their insurance coverage if they abandon their organized safety program and experienced safety leadership. In that event, the contractor will be forced to shop the market and may only be able to obtain insurance from an excess insurance carrier. If that happens, the contractor will generally have to pay a significantly higher premium for the same or lesser coverage. Stavros also pointed out that OSHA does not look favorably on contractors that do not have an active safety program and as a result may increase fines if violations are observed at jobsites.

While safety directors cannot tell you exactly how many accidents they have prevented — thereby saving not only lives, but also money — nor exactly how much money they have added to the profitability of a company, they can tell you that a safety program effectively implemented by experienced safety personnel do those things every single day; that fact is equally, if not more, important to the success of a company during hard economic times as it is in good times. In short, the time and money your company has already put into safety personnel and the safety program represents a capital investment. Don’t throw it away!

George Kennedy is NUCA Vice President of Safety.