CUTTING COSTS WITHOUT CUTTING SAFETY

FAYETTEVILLE, Ark. — As industries and government agencies struggle to remain competitive by reducing operating expenses, safety managers face difficult implementation decisions. University of Arkansas researcher Terry Collins developed an approach to measure the financial return on investment in various safety measures.

Collins, assistant professor of industrial engineering, worked with graduate student Susan Jervis, system safety engineer for the U.S. Army Military Command, to develop and evaluate the process. Their results appear in the current issue of Professional Safety.

The approach uses an analytical hierarchy process based on the U.S. Occupational Safety and Health Administration’s Voluntary Protection Program (VPP). A survey form guides managers through a comparison process designed to produce a matrix of quantitative data for six of the seven VPP elements. Included elements are: management leadership and employee involvement, worksite analysis, hazard prevention and control, safety and health training, review of documentation and concurrence of bargaining agents.

"Safety managers face difficult decisions regarding the best way to implement and maintain an effective safety program with limited resources," Collins said. "Some that participate in VPP fear they may lose their coveted Star status because of forced cutbacks."

Collins and Jervis designed a system that evaluates each VPP element in a multi-step process. This analysis produces two rankings, one based on the relative resources expended to implement the program and on based on the relative benefit from that process. The two rankings comprise a benefit-to-cost ratio.

The survey form is designed to ensure that comparisons are consistent throughout the analysis. Comparisons are divided into nine categories and analysts rank each element on a verbal scale that uses the terms equal, slight, moderate, significant and extreme. At the end of the survey, the descriptive terms are converted to numerical values and entered into the matrix an a final relative ranking is produced.

The researchers tested their approach on the only military organization currently recognized as a VPP site. Because the success of the analysis depends on the expertise of the analyst, the safety director was selected to respond. They found that hazard prevention and control provided the greatest benefit for this organization.

"We were surprised at this result. Because it requires the least amount of resources to be expended, we expected the management leadership and employee involvement component to provide the highest benefit-to-cost," said Collins. "The analysis showed that this component had a lot of 'hidden’ costs that made it second in relative benefit to cost, but it remains a crucial element of the safety program."

The hazards prevention and control component includes many typical elements of a safety program, such as access to qualified safety and health professionals and availability of onsite or local medical facilities. Results indicate that cuts in these staff positions could make it difficult for the organization to maintain its VPP status.

Although this experiment was applied to a military organization, the researchers stress the broad applicability of their approach to both private industry and government organizations. The fundamental principles can be easily adapted to any safety program, according to Collins and Jervis.

"This analytical tool can be valuable to safety professionals trying to target limited resources for maximum impact," explained Collins. "It has broad application and provides a simple method for determining which elements of a safety program provide the greatest benefit for a specific situation."