Why Ignoring Compliance in Occupational Health Management Can Cost You More Than Just Money

Although occupational health management (OHM) is a critical component of workplace safety, many businesses, especially SMEs have a difficult time keeping abreast with the laws and regulations that govern it. This does not come without repercussions though. In 2020 for instance, the National Safety Council estimated that companies paid upwards of 150 billion in employee compensation for workplace related injuries alone. However, ignoring compliance in OHM can have more than just financial implications. 

While most people initially prioritise compliance for the potential savings from financial losses (which is fair given the importance of finances in running a business), it is necessary to recognize that the non-monetary benefits of compliance may be even more salient. To illustrate just how important compliance is, the UN reports that 7,500 people die daily from non-compliance with occupational safety and health standards.

In this blog post, we’ll delve into the significance of adhering to occupational health management standards, highlighting the potential hazards associated with non-compliance. We’ll also discuss strategies for achieving and maintaining these standards, and provide practical tips for implementing policies and procedures that work.

By the end of this blog, you’ll have a deeper appreciation for the crucial role that compliance plays in occupational health management, and gain actionable insights for cultivating a safe and compliant workplace.

The Risks Of Non-Compliance in OHM

The potential consequences of non-compliance can be severe. That’s why it’s essential for businesses to understand the risks associated with it.

Below are some of the negative outcomes that may arise from ignoring OHM standards:

Legal Action

This is one of the most significant risks that businesses face when they are non-compliant. Regulatory agencies like OSHA and HSE have the power to levy fines and penalties for non-compliance and, in severe cases, even force a business to shut down. 

Apart from regulatory action, businesses can also be sued by employees who have sustained injuries due to non-compliance. Such lawsuits can lead to significant financial losses, including legal fees, compensatory damages, and punitive damages. Punitive damages are intended to punish the business for its negligence, and can be substantial, depending on the severity of the violation and the resulting injury. In extreme cases of willful disregard or gross negligence, business owners can even face criminal charges and imprisonment.

It is important to note that in the UK, cases that are taken forward by the HSE have an overwhelmingly high success rate; up to 94%. In some of these cases, those at the top —the executive management— are held liable, as it is their responsibility to ensure the safety of the people under their employ. As a business owner therefore, you should be at the forefront of championing safety practices in your business.

Reputational Damage

Non-adherence to safety regulation can have a detrimental impact on a company’s reputation. Businesses that fail to comply with can be perceived as irresponsible, resulting in a loss of goodwill from both employees and clients. Additionally, this negative publicity can spread quickly through social media and other channels, leading to a tarnished reputation that the business may struggle to recover from.

Unnecessary endangerment of lives

According to the ILO, every 15 seconds, a worker dies from a work-related accident or disease, which equates to over 2.8 million worldwide deaths per year.

When businesses prioritise profit over safety, they put their employees at risk of injuries that may have life-altering consequences. In the event of death, families are irreparably affected by the loss and might seek heavy compensation. Over the past few years the costs of payouts have been increasing, with the highest ever costing £5 million. According to the EHS Today, as of February 2016, new sentencing guidelines could see companies pay over £10 million in costs for the most serious health and safety violations, and more than £20 million for corporate manslaughter convictions.

How Can You Stay Compliant to OHM Standards?

Many of the risks we’ve discussed can be avoided if employers and their workers can take issues of health and safety in the workplace with the gravitas it requires.

To stay compliant, our team of experts here at Meddbase suggests that you:

1. Conduct a thorough analysis of the workplace to identify potential hazards and assess the risk associated with each one. This will help determine the necessary precautions to be taken.
2. Develop and implement an occupational health and safety policy. This policy should outline the company’s commitment to providing a safe and healthy work environment and include clear procedures for identifying, reporting, and addressing hazards.
3. Provide comprehensive training to all employees on the hazards relevant to their roles.
4. Regularly inspect and maintain equipment to ensure it is safe to use and in good working condition.
5. Keep accurate records of any incidents or accidents that occur in the workplace and maintain documentation of compliance efforts. Use occupational health software.
6. Conduct regular safety audits to identify potential hazards and address any issues that arise.
7. Provide appropriate PPE to employees and ensure they are properly trained on its use.
8. Encourage employees to report any hazards or safety concerns they identify in the workplace.
9. Regularly monitor compliance with occupational health and safety policies and procedures to ensure they are being followed.
10. Continuously improve occupational health and safety practices by incorporating feedback from employees, conducting regular reviews of policies and procedures, and staying up-to-date on industry best practices and regulatory requirements.

The Cost of Fines Is Higher Than of Compliance

Investing and adhering to an occupational health management system may seem like a financial burden for businesses, but in reality, the cost of non-compliance can far outweigh the cost of maintaining a safe and healthy work environment.

According to a study conducted in the UK in 2016, SMEs that invested in health and safety avoided fines £75,000 higher than the cost of complying with regulatory standards.

The potential costs of fines, penalties, and legal fees resulting from non-compliance can be devastating to a business’s finances, not to mention cause a decline in productivity and negatively impact its image. On the other hand, investing in OHMS not only ensures that you avoid financial losses, it also improves output from employees, boosts morale and can even open up avenues for new investments.