Jim Sierra serves as vice president of financial affairs for the Texas Oil and Gas Association, the state’s largest petroleum industry trade group. So it’s no surprise the going rate of about $45 per barrel of Texas crude has his attention. But that’s not what’s keeping him up at night.
Jim knows prices will rebound and Texas’ fiscal party will rage on. Victims of workplace accidents, however, aren’t always as resilient as the market. Some never come back.
“The industry is in a bit of a slump,” said Sierra. “We’re hearing about companies laying off workers in certain parts of the state. I always remind people that the market is cyclical, and there’s no need to panic about pricing. What I’m most concerned about is that as employers look to trim ‘fat’ from their budgets, they’re taking the deepest cuts from workplace safety programs.”
That’s an unfortunate trend in any industry, particularly one that has long been under the microscope for its safety record. The fatality rate among oil and gas workers is seven times higher than other industries. High-profile, serious accidents have delivered some of the industry’s biggest lumps since oil and gas began its meteoric resurgence around 2000.
To be fair, the oil and gas industry is getting better at protecting new and long-time workers. Fatality rates decreased 36.3 percent despite an industry boom from 2003 to 2013, according to a report issued by the Centers for Disease Control and Prevention.
Still, Sierra knows there’s a lot of work to be done.
“There’s never a good time to get complacent about safety,” said Sierra, “and that’s especially true now. We’ve made so many strides. I would hate to see us lose focus on what’s important.”
And what’s important to Sierra is the people who keep Texas’ oil and gas industry humming 24/7. He knows that every roughneck, tool pusher and rig operator is someone’s spouse, child or friend. Workplace accidents carry a human cost that you cannot quantify.
“I’ve talked to far too many employers who have had to tell a spouse or parent their loved one was involved in a catastrophic accident,” said Sierra. “Each of them will tell you that’s a call you never forget. Above all, our goal should be to make sure every employee goes home safely at the end of the day.”
Sierra’s devotion to workplace safety might seem counterintuitive. Executives like him are trained to scrutinize the bottom line. They labor over complex financial statements, approving initiatives that make sound business sense and discarding those that don’t. Safety, with its monetary and time commitments, is too often a casualty of the budget process.
If you’re a safety professional trying to convince the C-Suite that training, personal protective equipment and other tenants of a solid safety program deserve a place in the budget, you have a range of tools at your disposal. EMS/ISO 14000, the balanced organizational scorecard, Six Sigma and the Baldrige Performance Model can help you strengthen the links between EHS performance and business value.
Or, you could toss the complicated jargon out the window and lean instead on Sierra’s simple insider’s tip.
“You have to get management to see safety as a profit center,” said Sierra. “Once they understand that if they prevent accidents, they can reduce workers’ compensation costs and improve productivity, they are more likely to buy in.”
If you follow Sierra’s advice, you’ll find that selling safety might is the easiest business case you’ll ever make. Here are some hard numbers to bolster your position.
Safety by the numbers
218% – Well-trained employees are more productive – and profitable. Companies that invest in training reap a 218 percent increase in profit per employee compared with companies that don’t. Wellness and safety represents one of six cornerstones of a solid training curriculum…MORE
$355,000 – In the four years following a Cal/OSHA inspection, companies save an estimated $355,000 in injury claims and compensation paid for lost work. Inspected companies save an average of 26 percent on workers’ compensation costs…MORE
52% – The average worksite in OSHA’s Voluntary Protection Programs has a Days Away Restricted or Transferred case rate of 52% below the average for its industry…MORE
$37,000 – Each prevented lost-time injury or illness saves employers $37,000…MORE
$1.4M – Every prevented fatality saves $1.4 million…MORE
600% – Companies can reap up to a 600 percent return on their investment in safety in terms of reduced operating costs and increased productivity…MORE