CRA President's Message: Plans pay off

Avoiding accidents is good for the bottom line.
Tim Ranson,  CRA president
November 11, 2016
By Tim Ranson, CRA president
An interesting thing about injuries (it is incorrect to call them “accidents”) is that they never happen when it’s convenient and we seldom recognize the true cost to our businesses. This is particularly relevant in our rental world, as we tend to run our businesses with minimal staffing and often operate with very tight margins.

As you know, general accounting principles do not allow a budget line for injury, time lost or loss of productivity due to injury. This would equate to the archaic practice of identifying how many employees will be injured or killed to meet our financial goals. Fortunately, in North America, we value the lives of our coworkers and employees far more than we did pre-1950’s.

But incidents and injuries do occur.  Within our businesses, we anticipate each day will run smoothly. If all employees are on top of their games, we succeed. However, one momentary error in judgment, one shortcut taken could easily change the direction of you and your business for a day, a week or forever.

Consider this scenario. You are at work with your usual five employees and there are a couple of customers in the showroom. Suddenly you are interrupted on the phone by a panic call from the back yard: “Boss, Larry’s bleeding badly, he needs help!” What do you do now? Who deals with the customers? Do you run to the yard with the first aid kit? Do you have a plan? Then there is the trip to the hospital with you, the injured worker and a first-aid attendant leaving three grief-stricken employees to run the business, simultaneously worrying about the injured coworker. These are often panic-stricken moments, but if you’re prepared and have coached your staff on this type of emergency, they each know their role and go into support mode immediately.

But let’s return to the first question: what are the financial costs? In a simplified example where the injury is not life-threatening or disabling for the long term, the costs include the disruption of the day, your managers time, your workers’ loss of productivity, reduced capacity during the worker’s recovery, overtime and employees’ mental health time. Obviously, the more serious the event, the higher these auxiliary costs may be. Your province’s worker’s compensation board can give you an example based upon your industry group. The point is, an injury with no time lost but several impacts on the business could very easily set you back anywhere from $4,000 to $10,000.

In a far more serious injury where the worker is off work for days, weeks or longer, the true costs to the business over time can be expressed in tens of thousands. Notably, these losses come directly from your profit line. A few years ago, to demonstrate this point to our managers and line staff, I ran an example of the number of rental contracts we would need to transact to create the margin of profit to cover a $10,000 motor vehicle or injury loss. The surprise was clear – our staff did not realize what the impact of this type of loss was on the business. It was one component of awareness necessary to encourage each team member to do the steps necessary for a safe outcome, every time. The formula is pretty straightforward and you can plug the numbers in for your business to bring this to life. Simply divide $10,000 by your average rental profit per contract. In an efficiently run business, we might be talking about 15 to 25 contracts opened, delivered, successfully closed and the account paid before we see the revenues required to recoup the losses.   

Across Canada, compensation boards have partnered with various safety organizations to foster a safer workplace with incentives for employers who participate in a safety partnership program. There are also financial incentives in the form of rebates to the employer on their workplace insurance payments. These programs, along with positive employee engagement and an investment in training and leadership by us can provide significant benefits to your organization. If you are not engaged in a partnership program to improve your businesses approach to safety, you should consider it. Safety does pay. 


Tim Ranson is Environment, Health and Safety manager at Finning (Canada) / The Cat Rental Store in Edmonton, Alta. He has worked in the rental industry for more than 20 years. Tim sat on the ARA Trade Show Committee and the ARA Risk Management Committee and helped start its Professional Driver Improvement Program. He was also a speaker/panelist over the past three years at the ARA Rental Show learning sessions.


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