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Four ways your workforce compliance systems are costing you money

Balancing worker safety, a Quality-focused mindset, and creating a high-performance environment against financial KPI's (e.g. net profit) is tough, and it gets tougher with every new employee you add, and every new piece of legislation. 

Safe Work Australia reports that in the six years since launching, there has been a 27% reduction in workplace fatalities, a 25% reduction in workplace injuries, and a 30% decrease in musculoskeletal claims.

This commendable achievement has been a tripartite effort from SWA, Australian employers and their employees, but the mission is not complete. Sadly, many workers are still injured or killed, and the responsible businesses are duly prosecuted.

In the average Australian business, every effort is made to ensure worker safety is top priority and they are not liable for penalties. QHSE Managers are employed, procedures are created, training is completed, and so on. However, in this pursuit of driving workplace accidents to zero, the workforce safety and compliance systems themselves are rarely analysed.

For every enterprise with an expensive, robust software system, there are five businesses relying on administrative man hours, spreadsheets and a filing cabinet. If this sounds like your business, read on. Here are four ways that your current system is costing you money, and what you can do about it.

1. The obvious costs

The systems

You may have an expensive system or your staff may use a combination of spreadsheets and filing cabinets. Either way, there are costs associated with this - software licensing, floor space, furniture costs, or printing costs.

The administrators

In businesses of fewer than 100 staff, it is normal for a Payroll, HR, or Operations officer to spend a portion of their time managing expiring training records, site inductions etc. In businesses of more than 100 staff, often there will be a QHSE Manager or department responsible for ensuring the workforce is compliant and safe. These salaries are attributable to this business area.

The penalties

Probably the most obvious cost associated with poor worker safety and compliance are any fines handed down from the regulator(s). Depending on the severity of the incident, responsible parties may be liable for SafeWork penalties.

2. Non-compliant worker allocation

If your business operations relies upon sending workers (or subcontractors) to customer sites, non-compliant worker allocations may be costing you in both tangible and non-tangible ways. Consider the following example:

A Brisbane-based worker is allocated a job at a remote mine site. The job requires one day's travel by road each way, and will take 10 days to complete. The worker sets off at 6am Monday morning, expecting to return by the following Wednesday. Upon arriving at the mine site, his credentials are inspected, and it's found that his High risk work license has expired, and the customer cannot wait for the workers' license to be renewed.

The following costs may be incurred by the allocation of non-compliant workers to high-risk, highly-regulated, or remote tasks.

  • Loss of billable hours (productivity),
  • Travel & accommodation costs that are not recoverable,
  • Reputation/brand damage,
  • Any costs incurred by not fulfilling contractual obligations with your customer,
  • Any costs incurred by worker re-assignment and associated administrative tasks.

3. Manual, repetitive tasks

Your staff have an hourly or daily rate, and only a limited capacity for productivity during their work hours. We have observed three ways in which traditional workforce compliance processes are not efficient use of employee work hours.

  1. Decentralised storage. Some records are kept in a filing cabinet, others are stored as scanned copies in an employee folder on the local intranet, and others are stored in the Payroll software. Every minute spent searching for information in multiple unintelligent systems is a cost attributable to this task.
  2. Auditing & daily management. Tracking and managing expiring qualifications, renewable inductions, insurances etc can be managed effectively in spreadsheets until there are about 20 employees, and only then if the responsible person is diligent in regularly checking the spreadsheet. There is no way around it - using spreadsheets to manually check expiry dates is a manual process.
  3. Reporting. Generating monthly/quarterly reports while using traditional workforce safety and compliance systems is always going to be a manual process, no matter how proficient your QHSE Manager is in Excel.

4. Single Point of Failure

A paper- and spreadsheet-based system is particularly vulnerable to key-person risk. Just to list a few ramifications of a traditional workforce compliance system:

  • Leave happens, and it's not always able to be planned for. While your responsible manager may be able to delegate these tasks (after some training), if they are unexpectedly unable to work for any length of time, their system may fall apart and your business may be exposed to the risk of penalties, non-compliant worker allocation, etc.
  • If the responsible manager makes an error, it is unlikely to be picked up until it becomes an issue.
  • If the responsible manager is not interested in making positive changes to their processes, it may be the case that they are not making best use of their time (which you are paying for).

5. What to do about it

If after reading this, you have identified your current workforce safety and compliance processes to be a problem, then the good news is that we are living in the golden age of business-grade software and help is only a contact form away.

Our solution (Compliance Fox) was born to centralise, simplify and automate workforce compliance management processes in businesses between 100 and 1000 employees, contractors, or volunteers. Our software is designed for managers currently using a manual (i.e. paper and spreadsheets) system.

Want to learn more? We'd love to hear from you.

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