Why is health and safety so costly?
The true cost
Many companies think that by managing H&S in-house themselves, that it doesn’t cost anything! Therefore, they think that they cannot justify the cost of H&S software to help them, however, we’ve been exploring the cost of a manual, internally-managed health and safety system and our findings suggest that this couldn’t be further from the truth.
Paper printing and storage
Most of us know that we need to do more to ensure our business operations are greener and more conscientious, however, do we ever stand back to consider the financial cost of not being as green or as efficient as we could be?
A study completed by Reckon found that the cost of paper, printing and filing is around £280 per employee per year, multiply that by 50 staff, and it equates to a shocking £14,000 per year.
Health and safety is one of the most paper-heavy processes in most businesses and could contribute to as much as half of this.
Training and development
How do you currently manage training and development within your business?
Do you outsource to a costly training provider who takes care of everything but sends you a huge invoice every month? Or do you look after it all in-house? It’s cheaper in theory but the costs start to snowball when you’re taking senior staff members off their usual duties to provide training sessions and having to contend with all the admin of chasing staff completion and refreshers, sending reminders and rearranging training due to absence?
How about getting the best of both worlds and using CRAMS, with our integrated, all-inclusive e-learning solution complete with 60+ courses. There’s no extra charge and you can assign courses to employees, they are notified by email and can complete them online at a time to suit, they can even complete them more than once if needed. Bersin recently completed a study which suggested the average cost of training per employee was £1,068. Just think about how much you could cut this cost down by having this included with your CRAMS monthly fee!
Some SMEs rely heavily on outsourced support to help with their compliance. Consultancy fees, therefore, make up a large part of the cost of their health and safety system. The HSE conducted a study that found the cost of health and safety assistance was as much as £177.28 per employee in small businesses (up to 49 employees) or £93.07 per employee in a medium business (50-249 employees). This averages £133.17 per employee per year, therefore, you could expect to pay out just under £7,000 every year. What is worse is that the cost increases as size decreases, almost making good health and safety advice cost-prohibitive for smaller businesses.
Risk assessments and H&S arrangements
In the same HSE study, it suggests that a combination of risk assessments, health and safety arrangements and implementing control measures, could cost as much as £463.83 per employee per year in small businesses, with medium businesses benefiting from the better value per seat at £214.14.
Averaging the two costs still leaves an SME with an annual cost of £17,000. Although it can be hard to imagine spending £17,000 on these things, when you consider the time involved in the above, in relation to 50 employees, it’s not far from a full-time position. Especially when considering the creating, posting, chasing, processing, auditing and storing of data which is incredibly time-consuming and costly. Add on the need to purchase signage, stickers, PPE, controls such as grit, fire extinguishers, eyewash stations, first aid kits, accident books, testing equipment, servicing of assets and safety checks and you may not be as far from the figure as you previously thought.
How much does CRAMS cost?
Let’s take a business of 50 employees as an example. The HSE estimates that the annual cost of health and safety compliance using a traditional paper-based system and regular consultancy advice would add up to, on average, £85,000.
For the same business, CRAMS cloud-based software would cost £2,700 per year (£54 per employee) with a one of deployment fee of between £1,500 and £5,000 in the first year. Additional costs would be reduced as follows:
- Printing and paper-based costs are minimised, if not eradicated.
- Training costs are significantly reduced, as CRAMS covers 90% of training requirements (as per our current customers’ feedback)
- Our customers also report that with CRAMS they only require consultancy advice once per year compared with bi-monthly advice pre-CRAMS – another huge cost saving.
- Time spent creating and reviewing risk assessments is dramatically reduced due to the automated functions and simple interface for all users within CRAMS. This reduces the man-hours associated with remaining compliant, currently one of the biggest costs.
For the average business with 50 employees, you could expect to see the cost of health and safety compliance come down to around £13,500-17,000 for the first year and £12,000 per year thereafter – a staggering potential saving of around £70,000 per year.
Now that you know the facts, can you afford to continue your current approach to health and safety?
What are the costs comparatively?
|Current Annual Cost SME with 50 staff||Annual Cost SME per staff member||Annual Cost with CRAMS SME – 50 Staff||Annual Cost with CRAMS per staff member|
|Training and Development||£53,400||£1068||£5,340||£106.80|
|Risk Assessments & Health and Safety Arrangements||£17,000||£340||£2,833||£56.66|
Do you want to save over £70,000 per year?