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When a roughneck gets hurt or a service truck crashes, the damage sucks profits directly out of an energy company's bottom line.

While most of these companies do a good job of safely extracting oil out of the ground or pumping gas through a pipeline, safety may suffer when it comes to the work leading to that point. Many accidents and injuries in the energy sector, in fact, stem from work beyond the actual pumping and distributing of crude oil or natural gas.

But your company's financial statements don't make such a distinction--the cost of any accident slashes profits. For every $1 spent paying lost wages and medical care for injured workers, a company pays between $3 and $5 in overtime, training and other costs during their absence, according to a Liberty Mutual study.

So how can energy companies stop this earnings drain? Here are five tips:

- Look at safety as a process. Safety doesn't stop and start with only certain operations. It crosses all of them. And the best safety plans cover everything a company does: from pumping resources to storing stock; from transporting goods to job sites to putting rigs up and taking them down; and much more. So understand all of your operations, and recognize the role of vendors.

- Know your performance. Which of these tasks does your company do safely, and where is there room for improvement? What are the injuries and accidents that sparked past workers' comp, commercial auto and liability claims?

- Plan safety. Identify the best ways do all of your operations safely. Set specific targets for improving performance in key areas. And prioritize your efforts, focusing on the greatest risks.

- Communicate the safety plan. Show employees and vendors why safety is important. Highlight senior management's commitment. Review the new workflows, targets and incentives for working safely. Give employees the training, tools and motivation to improve safety.

- Monitor performance. Recognize and reward employees who work safely. At the company level, regularly track performance against your targets. Review the results with all employees. And adjust the plan as needed.

Here are three great resources for learning to work safer:

- Front-line employees. They understand the work: how it's done, why it's done that way and how it might be done more safely. Their involvement in building the safety guidelines makes it much more likely they'll follow these work rules.

- Other industries. Transportation associations are a great source of information on cutting highway accidents. Industrial distributors can show you how to store stock safety. Why reinvent the wheel--or training program?

- Your insurance carrier's loss-control consultants. They'll help identify and reduce risks to your operations.

Managing safety across an organization isn't easy. But it is vital to protect employees and the bottom line.

JAY GNADT, CSP, CRM, is a loss prevention manager with Liberty Mutual. He has more than 17 years experience in the field.

August 1, 2005

Copyright 2005© LRP Publications