When it comes to workers' compensation costs, a penny saved is definitely a penny earned. That's a lesson that even the biggest construction and engineering firms take to heart as a strong safety program can make a real difference when it comes time to pay the insurance premiums.
"Philosophically, we approach all of our environmental, safety and health initiatives and programs with the mindset that it's value added," says Kevin Berg, manager of environmental, safety and health for Bechtel Corp., the largest U.S. construction and engineering firm. "At the end of the day, we're saying that safety is a value."
A focus on safety has paid off for other builders as well.
Florida-based builder The Haskell Co. last year instituted a "Designing for Safety" program that makes a focus on safety an inherent part of a building from training through planning, construction and occupancy. The company says that its focus on safety helped it to cut on-the-job accidents by 30 percent in 2004.
At Turner Corp., the company has expanded its safety and loss control group to include a full-time safety manager at projects with a construction value of $25 million or more. The Dallas-based company also provides a medical trailer for some large job sites and conducts audits of safety practices. Turner's safety group also publishes scorecards to help business units monitor and compare their safety records.
Bechtel, which has 40,000 employees, focuses on prevention rather than trying to mitigate problems after the fact. "We recognize that mitigation ... (is) just adding costs ... to our business and to our bottom line," Berg says. "Whereas the elimination of hazards, if we can go that route, that is value added. In the long run it actually adds to the bottom line."
The safety-first approach has helped San Francisco-based Bechtel keep its global lost workday case rate to 0.13 in 2004, and its global recordable incident rate to 0.78. By comparison, the U.S. average for the construction industry in 2003 was 3.6 for lost workdays and 6.8 for recordable incidents, according to the Bureau of Labor Statistics.
That focus on safety has given Bechtel an edge, Berg says.
"Our insurance, by comparison to the industry, is extremely favorable. The modifier that they use to determine how much you're going to pay for workers' comp insurance, for us is just slightly above half of what it would be for the average contractor, or average performer," Berg says. That gives Bechtel an edge when it comes time to bid for new business, he says.
"That lowered rate makes us more competitive, and oftentimes is one of the key factors that helps us to secure work." Berg says.
April 15, 2005
Copyright 2005© LRP Publications