Cost Cutting by Employers

NIOSH Chairman Tan Sri Lee Lam Thye today advised employers and top managements of companies not to use the present state of our economy as an excuse to cut back or reduce OSH expenses as such cost-cutting measure will not be in the interest of the safety and health of their employees.

NIOSH is aware that the present sluggishness and economic uncertainty experienced by Malaysia has had a significant impact on our industries as a whole.

Many companies have had to tighten their budgets. This measure is unavoidable. However, in the process, a number of questions come to mind:

a) Should a company cut back on the safety and health budget in the workplace during this economic slowdown?

b) Is this a logical or viable step to take?

If you stop to think for a moment, compromising safety and health at the workplace is tantamount to incurring additional costs to a company. Why do I say that? Can a company afford to:

1. have an unwanted accident which might disrupt production?

2. be distracted with having to investigate the accident whereas it should be occupied with other scheduled productive duties

3. and in the worst case scenario, be issued with a stop-work order where productivity will be affected.

These are few examples of what accidents can do to the bottomline and productivity of a company.

Certain executives at the management level might have the notion that cutting back on OSH expenses is an acceptable way because they see it merely as a cost cutting measure. However, this should not be the case. Have you ever come across a saying which goes “if you think safety is expensive, try an accident.”

So how do we address OSH issues in these difficult times?

The answer lies in the development of a “good OSH management system.” This responsibility lies with the management team, which must accord serious attention to the aspect of how to manage OSH appropriately. The very objective of good OSH management is to provide the required investment in terms of commitment – financial, human resources and equipment in systematic OSH strategies – in order to secure the highest rate of return on investment such as zero accident without jeopardising the company’s overall profit performance.

A good OSH management system leads to:

1. minimizing unnecessary spending of financial, manpower and other resources to unproductive safety measures by prioritizing OSH activities.

2. ensuring that OSH committee in the workplace is a focus for both management and workers to work together for the improvement of OSH.

3. to change the approach to safety and health at the workplace from being reactive to a more proactive approach or in other words prevent the accident rather than cope with it.

Good OSH management is therefore an integral part of a good overall company management system.