AN organisation exists to perform its functions, and management effort is devoted to achieving the goals of the organisation. In the course, an organisation will be exposed to circumstances which can threaten the performance of the organisation. And one such instance is through loss-producing events like industrial accidents.
Many companies profess they have safety in place within their organisations. Only the top tier companies are taking aggressive actions to control safety. Many others also say they are concerned with safety, and that is about all they do. When an accident happens, nobody wants to be accountable.
In Malaysia, the management attitude towards safety and health can be categorised to some extent. There is the legislative attitude, which says âcomply with the law, but no moreâ. Then there is the humanitarian approach that treats people as the most valuable asset of an organisation. Finally, there is the financial approach, which takes the view that all accidents are losses to an organisation.
The approach based on legislative or humanitarian aspects has no guarantee that safety and health programmes will fully meet the needs of an organisation. The economic approach is realistic as it considers an accident as a financial loss to an organisation. The approach aims to persuade managers that money can be saved and profits increased if accidents are reduced.
It is a fact that employees are hired so that their labour may contribute to the profit of an organisation. The contribution can only be made when the employee is on the job. No production is made by the employee who is absent on accident injuries.
Employees absent as a result of injuries continue to qualify for a variety of benefits â annual leave, long service awards, bonuses etc. This is because these benefits are based on an assumption of services and
not absence. Industrial injuries waste time, be they the disabling or first aid type. Every accident which lays an employee off work is a direct interference with production.
From the production point of view, those least able to support disabling injuries of their operators are the small and medium enterprises, which are numerous in any industrial community. The gap in production has to be bridged by overtime at penalty rates.
Many people have the perception that because the company pays out money in medical expenses, this is the sole cost of the accident to the company. Moreover, the medical expenses and operator wages could be recovered from Socso.
The cost of the accident is perceived to be negligible and has little impact to the company. The fact is that these are direct costs. It represents only a small proportion of the total cost of accidents. There are the hidden costs, which are numerous that the company has to bear.
It is useful at this stage to consider how accidents affect profits. One does not have to be an accountant to see that nothing has a more direct effect on profits than the losses associated with accidents.
If the daily production from a machine generating product valued at RM10,000 is available one day and not the next because of an accident, it is quite obvious that the daily income of the company has been reduced by RM10,000.
In the recently announced budget by the government, industries lamented that there was no allocation for occupational safety and health matters. Though industries are allowed to operate as normal, most of them are unable to attain the level of economic activity like before the pandemic.
In addition, they now have to fork out additional expenses to abate the pandemic to prevent their workers from contracting it. The government should revisit the budget to provide some incentives or subsidies to industries to enable them to maintain their continued commitments to safety and health.
Conscientious, cost-minded managers would not take safety lightly. They would treat safety as an investment, with significant returns both humane and economic.
The challenge is to have health and safety issues integrated into the business process.
Wong Soo Kan
Petaling Jaya
