Budget season is here. Unfortunately, when times are tight and profit margins are narrow, managers often look for reasons to narrow expenditures. Which means you’re probably going to get questions you don’t like, such as: what do companies spend on employee safety compared to our budget? Asked, of course, with the hope of justifying a smaller budget.
Here’s a quick review to help you allocate your budget the right way.
What do companies spend on employee safety? The short answer: it depends.
For example, the average company spent $1,111 on safety training, but small companies actually spent more in 2020 than large ones–$1,678 compared to $924. This is due to a combination of large company layoffs and the fact that small companies can’t afford to replace employees so easily.
Of course, safety training is just one part of the equation. Employers swallow most safety costs, which means you also have to account for everything from personal protective equipment to legally required drug and alcohol tests. You also have to pay for safety tools like safety software that help your EHS team stay on target, as well as things like workers’ compensation insurance.
Granted, this also depends on how broadly you define safety. Employers spend roughly $1 billion per week on direct workers’ compensation costs for disabling, nonfatal workplace injuries.
Your best bet is to look at spending in your industry, particularly among your closest competitors.
Because safety spending is usually case-specific, your budget is highly personalized. That said, you can find smarter ways to allocate your budget.
Start by breaking down your budget into component parts, such as:
Once you break these down, you can itemize them into their component parts to arrive at dollar amounts. From there, you can identify any inefficiencies. For example, if you’re not buying PPE in bulk, that’s a good way to save money without sacrificing quality.
This also gives you a chance to identify wants versus needs. For example, you can identify how your EHS team uses your safety software and pay for the functionality you need, such as safety compliance tools.
What do companies spend on employee safety? Ultimately, the better question is what you spend on employee safety and how you can make better use of your available budget.
The key is to be efficient and use tools that give you multiple functionalities under one bill. Like our safety software, which offers solutions ranging from safety training to compliance management to vendor management. That way, you can make the most of the money available to you with one powerful solution.
Ready to invest in safety the smart way? Get in touch today to learn more about how our software can help.