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For cable, there are numbers in safety

Wed, 04/30/1997 - 8:00pm
Craig Kuhl

It's probably safe to say that accidents, especially job-related ones, don't just "happen."

When they do, the ripple effect is felt far beyond the victims, their families, and co-workers, reaching all the way to the company's bottom line.

For the cable industry, getting the job done safely is an attitude with growing pains. The industry has made some gains in regard to safety, but most industry experts agree it has a ways to go to reach the pain-free stage.

The biggest pain, however, could be to the bottom line, with the average cost of an on-the-job injury costing a company approximately $30,000. Yet, the costs of merely winking at on-the-job safety measures go well beyond the direct costs to the company and to victims. It's the simple iceberg theory in play: the huge indirect costs of lax safety efforts by a company and its employees lurk beneath the surface, and are much greater than the visible direct costs — seven times as high is the rule of thumb — with most safety experts insisting that the number is much greater.

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As painful as the direct costs of an accident may be to a company and to accident victims, there are greater costs. High-risk worker compensation rates for accident-prone companies, loss of employee time and the cost for a replacement's time, vehicle down-time because of accidents, and damage to a company's public image are just a few of the indirect costs associated with accidents, and even after these costs are factored in, the pain of an on-the-job accident/injury goes on with employee morale, production issues and more.

"If you continue to have a workforce that's not into safety, you've got morale and production problems, not to mention lawsuits and public image issues," says Ray Lehr, corporate director of safety for TCI. "Generally, a manager will see only the direct costs of an accident — the doctors' fees, hospital fees, or how to fix the truck that's been in an accident. They don't see the indirect costs, which are at least seven times greater."

Managers share a responsibility with top management to provide a safe working environment for their employees, yet it's the industry as a whole which must do a better job of upgrading its safety standards, according to most industry experts. When that takes place, good things happen to employees — and to the bottom line.

"As an industry, we haven't done a good job with regard to safety. Ten years ago, we couldn't have withstood close scrutiny by OSHA (Occupational Safety and Health Administration), and they're a lot smarter now, and better focused," says John Young, safety and fleet manager, construction division at Time Warner. Young suggests that everyone in the cable industry must take responsibility for upgrading their safety standards, including top management. "When management understands that we're here to help the company make a profit for shareholders by reducing accident costs, safety becomes a no-brainer. By addressing safety issues, we save a lot of money, and get the job done. It just makes good business sense."

Take it to the bottom line

Last year, according to Young, Time Warner saved $2 million in direct costs by initiating several safety programs, and cut the company's OSHA recordables by 70 percent. To earn $2 million in net profit, a company must earn $40 million in gross revenues, assuming a five percent net profit. "That's $2 million available for profit sharing instead of settling lawsuits," Young added.

Reducing the number of lawsuits isn't the only way to save money, either. After assuming a more aggressive role with its risk management, TCA Cable TV in Tyler, Texas reduced its accident claims by one-third over a year's time. It also reduced its subscriber claims by one-third, with both contributing to the bottom line, according to Linda McGuire, director of training and development for TCA. "A year ago, the costs of the risk management segment of our safety program were astronomical. So, we became more aggressive in our defensive driving classes (vehicle accidents represent the highest rate of claims and injuries) and with other safety issues. If we see an increase in moving violations, we put employees through driver's training. We've seen a significant decrease in claims as a result. And, these are hard claim costs that commit to the bottom line."

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McDevitt
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Employee bonuses and incentives also rate high on the list of changing attitudes toward safety. Buford Television, for example, offers all driver/technicians a progressive bonus beginning at 25,000 truck miles, provided they maintain their vehicles on a regular basis. With vehicle accidents the number-one cause of claims, Buford focused on the cause five years ago, when it was assigned to the costly risk pool insurance rate. Says Kay Monigold, chief administrative officer for Buford Television, "Some years ago, we were in the assigned risk pool. Because of these programs and being aggressive with safety, our accident record is very low, and our worker's compensation is not risk pool, and that affects the bottom line."

Others, such as Jones Intercable, have shown significant decreases in worker's compensation claims as well. Between 1994 and 1996, Jones saw a 46 percent decrease after initiating a number of new safety programs, including defensive driving, pole climbing, its "hot gloves" program, and others. "I think safety is finally at a point where risk management costs are so high, we need to manage them much better," said Kevin McDevitt, corporate safety manager for Jones Intercable. "But, I also think we're still in the infancy stage as an industry when it comes to safety. Just acknowledging safety as an issue is a big step."

Not big enough, according to some. Says Ralph Haimowitz, director of training for the SCTE, "Most companies don't seem to care. Some have hired safety coordinators who are doing pretty well, but most others offer just lip service. I think they're putting the wrong people in as safety coordinators, which is a waste of time. Records keeping is very important to a safety program, so it's an administrative position, not a technical position. And, office employees are at risk, too, but most companies don't think of them (as being) at risk."

Risk and cost are the operative words in safety. The higher the risk, the higher the cost, explains Dan Chilton, national service director for Liberty Mutual Insurance. "Not only do you pay more if you're not safe, but you won't be allowed to compete with other companies for lower rates. Cable, as an industry, may be able to get breaks on its insurance rates, but it needs controls in place which include two key elements: exposure and control."

Dewey Wagner, division manager for the National Cable Television Institute (NCTI), knows all about risk and cost. In 1979, he suffered a serious on-the-job accident which nearly killed him. Now, he is a leading proponent of industry safety measures. "Today, employees are pressured to complete their jobs faster because companies want to run lean, and sometimes, speed becomes more important than safety. But, safety is always economically sound, and not just the right thing to do. Also, the cable industry has lots of veterans who have been doing things one way for many years and look upon safety as a burden, but one second can change their lives forever."

With that mentality, and a clear view of the bottom line, Lehr and TCI enlisted the services of Dr. Robin Herron, professor of ergonomics at Colorado State University in Ft. Collins, Colo., to analyze and recommend ergonomically correct work environments for both in-field and office employees.

"A big part of a successful business depends on efficiency and worker satisfaction. What we found was that in-field cable employees have a very physically-demanding job and want to know what exposures they have and how to protect themselves. And, the bottom line for management is the reduction of injuries and dealing with the rising cost of accidents. It has to be a shared responsibility, and the best way to meet the responsibility is to design out safety problems in the beginning," says Herron.

Designing out rising claims costs to a company's bottom line will require a major feat of engineering. Yet, a growing number within the industry feel there's at least some progress being made in climbing the ladder to safety, one rung at a time.

 

Making the workplace safer:

  1. Take responsibility.
  2. Implement new safety programs.
  3. Utilize bonuses and incentives.
  4. Hire qualified safety coordinators.
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