We rarely take indirect costs into consideration in gathering data and statistics.
Examples of indirect non-compliance costs are;
- Work stops on-site – e.g. Incorrect documents – do we ever question how much this costs?
- Lack of proper planning and collaboration at outset means the site and work carried out is chaotic and inefficient.
- Changes in specification to a project – this moves the goalposts for compliance – costs?
- Labour shortages – new recruits need to be trained and schooled in H&S.
- Site investigations – accidents or incidents- interruptions and cost.
But let’s be clear on one point.
Businesses have to make a profit or at the very least break even. Construction companies build things. That is ultimately what we judge them on.
Running a profitable and compliant business is not mutually exclusive. They depend on one another. This does not mean running profitable and compliant businesses is easy.
Compliance is a challenge no matter what size your company is.
It is particularly challenging for mid-size companies. They might not have the budgets to employ a full time Health And Safety manager.A quick scan of UK salaries for such a person ranged from an average of 35k to 55k plus.
In smaller businesses, it’s difficult to take time out to take stock of your compliance systems and procedures.Many business owners spend their working weeks and months working IN the business with no time to work ON the business. This can cause the following;
- Complacency – ‘It won’t happen to me’ ‘ we do not need it for this- project-task-action’.
- Lack of planning & time constraints – up-and-coming projects – tenders.
- Poor risk management & planning.
- Lack of training & awareness – ‘hired hands on site – here today gone tomorrow’.
- SME affordability? H&S employee costs?
- Crisis by the hour – the phone won’t stop ringing – I’m drowning in emails – I have no TIME.
- Poor management process & record keeping – everything is paper based – no digital system for document location and retrieval.
- Lack of engagement with experts if needed – they engage too late – ‘ I started a fire now you put it out’.
- Last minute.com- ‘Can you do… X… by tomorrow as we are on site?’
- Head down in the muck and bullets – fire fighting – overwhelm.
- This can cause being penny-wise pound foolish and increase the risk of non-compliance.
One way of dealing with this is to seek outside help from trusted experts.
They will endeavour to understand your business, how it operates, the work you undertake, the clients you work with currently.
They will identify where you have compliance weaknesses or gaps. They will TELL you if you are non-compliant.
They are duty bound to tell you the truth.
By the same token, they will advise you, tell you what you need right now to operate successfully.
They should understand where your business is right now and perhaps where you want it to be in the future.
They can afford the time to take a helicopter view of where you are and give a third party view.
6.5 million is a heavy cost for non-compliance.
Complying with regulations and being able to evidence it is crucial to a successful and profitable business with a sustainable future.
Staying in the game is the goal, not winning it. Non-compliance puts you out of it.
If you have any compliance queries or just want to ask a question – please contact us.