Safety and Risk Management—Reduce Costs and Increase Revenue

FLOOR ED

Safety and Risk Management—Reduce Costs and Increase Revenue

Stacy Eickhoff Stacy Eickhoff is senior vice president for Risk Strategies Company. She has worked in the insurance industry over 25 years with a focus on property and casualty within the floor covering and construction industries. Ms. Eickhoff holds licenses in over 40 states. Risk Strategies Company is the endorsed provider for the World Floor Covering Association. 2020was an unprecedented year, and as we near the middle of 2021, who would have thought we would still be battling the impacts of COVID19. Social Distancing, Face Masks, Hand Sanitizer and 6 Feet have become safety buzzwords for everyone from housewives to CEOs. Willingly or not, almost everyone has had to adapt to a culture of personal safety. In the short term, businesses had to invest in safety measures to comply with a myriad of ever-changing regulations to keep employees and customers safe just to stay in business.

The focus on safety the last year is the perfect opportunity to maintain and drive a culture of increased risk management and safety.

A robust safety plan and culture can save business owners thousands of dollars and help to increase revenue. An effective safety/risk management program sets a consistent standard of performance for your employees and includes all aspects of your business, from dress code to customer engagement.

When talking about safety, most tend to focus solely on employee safety and workers’ compensation and how employee injuries affect your premiums and rates. However, a work-related injury can affect more than just the individual worker and your premiums.

A single workplace injury can include the potential for increased costs due to:

● Lost productivity ● Increased injury risk for other employees ● Disruption in the workplace ● Potential loss to equipment ● Harm to company reputation

A severe injury can bring potential fines and penalties. According to the Federal OSHA website, during the period of October 2019 and September 2020, the following Floor Covering NAICS codes experienced the following OSHA actions:

NAICS Code

Citations Inspections 442210 Floor Covering Stores 6 2

238330 Flooring Contractors

52 26 238340 Tile and Terrazzo Contractors 45 14 Penalties $32,000 $96,306 $95,149

https://www.osha.gov/pls/imis/citedstandard.naics

A robust safety plan and culture can save business owners thousands of dollars and help to increase revenue. An effective safety/risk management program sets a consistent standard of performance for your employees and includes all aspects of your business, from dress code to customer engagement.

While the total number of inspections and citations may seem low, it is worth noting that the period surveyed includes the first 6 months of the COVID-19 shutdown.

Under the Occupational Safety and Health Act of 1970, employers are responsible for providing safe and healthful workplaces for their employees. OSHA’s role is to help ensure these conditions for America’s working men and women by setting and enforcing standards and providing training, education, and assistance. This includes not only your retail store but also the job site.

An effective Safety/Risk Management Program includes at a minimum the following:

Responsibility — Who in the organization has authority and responsibility for implementation.

Compliance/Accountability — This component includes both recognition and discipline for performance

Communication — Effective communication is key; are employees aware of the methods used to communicate with you about health, safety, and customer service issues.

Hazard Assessment — Are there procedures for identifying and evaluating workplace hazards? Assessments should be done periodically at your location and daily for every job site.

Accident/Exposure Investigation — These should be done by Supervisors and/or Managers with a focus on understanding what and why the accident or loss occurred and what can be done to prevent future accidents

Hazard Correction — Once identified, any hazard must be addressed in a timely manner. Proper training on equipment and utilization of all safeguards is a must.

Training and Instruction — Training is one of the most important elements of a risk management program. Training should be relevant and both organizationally and job-specific. Training should be conducted at hire, whenever new tasks are assigned, and new equipment and procedures are implemented.

Recordkeeping — This includes documentation of training, facility & worksite inspections, and any job condition that may result in a potential loss or injury and what was done to correct or prevent it. If it is not recorded, it didn’t happen. Safety and Health training must include the Date, Time, Employee Name receiving the training, and who provided the training. Worksite inspection documentation should include the name of the person inspecting, hazards encountered, and corrective action taken, if any.

Having a safe, clean, and well-maintained showroom or installation site prevents not only workplace injuries but general liability and property losses. Over my 25+ years in the industry, I have seen everything, including theft of materials and tools, customer slip and falls, property damage to your customer’s property, and even fatalities. Most, if not all, could have been prevented with a good safety/risk management plan. These situations can impact a business’s profitability by increasing insurance premiums, labor costs and damaging brand reputation.

The insurance marketplace has been hardening over the last two years with increases in premiums, reduced capacity, and increased underwriter scrutiny. Unfortunately, this trend is predicted to remain through 2022. Having a clean loss history and the ability to articulate clearly your risk management and safety protocols will better position your business to obtain premium credits where available and keep both your insurance costs and business overhead down.

Maintaining your showrooms, equipment and having high worksite standards combined with withholding your employees accountable for safety and performance will work to reduce losses and drive a consistent, positive customer experience which will ultimately lead to increased revenue.

A negative customer experience can impact your business far more than a positive one.

Setting up a safety/risk management program and training your employees to follow it will not only reduce overhead but can drive revenue. Consistent protocols and procedures not only drive safely but a positive customer experience.

A Salesforce study found that 80% of customers consider the experience a company provides to be just as important as its products or services. (Salesforce) The book Marketing Metrics reports that the probability of selling to an existing customer is 60 to 70%.

“According to Nielsen, 92% of consumers believe recommendations from friends and family over all forms of advertising.” (Glover, 2021)

In summary, a robust Risk Management program will help you prevent injuries to your employees and reduce business overhead by preventing both physical and intangible losses resulting from poor performance and brand reputation. A happy and healthy workforce promotes morale and creates a positive customer experience, leading to increased revenues.

Our team at Risk Strategies are experts in the field of insurance and risk management. We are here to help. ❚ Having a safe, clean, and wellmaintained showroom or installation site prevents not only workplace injuries but general liability and property losses. Over my 25+ years in the industry, I have seen everything, including theft of materials and tools, customer slip and falls, property damage to your customer’s property, and even fatalities.