Posted By Bruce Wayne
Hi all,

I am currently negotiating with a prospective employer and wish to propose an annual budget figure for health and safety provision, also a budget figure for personal development / maintenance of core knowledge.

Does anyone know of a percentage of company turnover or figure per employee. This is just to give me a starting point.

It is an engineering company with approx 300 staff.

Thanks in advance

Bruce

Posted By David Bannister
Hi Caped Crusader, I think that setting a budget prior to knowing the issues is a wrong move. Set too low may result in significant areas of risk remaining uncontrolled due to insufficient resources (try telling a judge that!) whilst an unrealistically high budget is likely to affect your credibility in future budget negotiations.

Perhaps the way to tackle this is to set a timeframe for your initial analyses and seek agreement that the budget will be up for meaningful negotiation then. The employer may have some feel for what has previously been spent and also some idea as to whether that spend has been worthwhile.

If however this is essential, as a shot in the dark why not seek initial parity with the quality budget?

I also think that using an average spend as a proportion of turnover will not really be applicable to your own company except as a complete fluke. Each industry sector has its own specific hazards whilst each company in that sector will be organised in different ways and have differing processes, personnel, environment etc. A further complication is that training budgets are dealt with in a variety of ways (owned by HR, production, sales, training, H&S, operations etc departments) so some H&S budgets will include some training whilst others may include none.

You appear to be starting with an organisation that is prepared to allocate proper resources to being a safe and healthy employer. Good luck Bruce.

David.

Posted By Ian G Hutchings
Hi Bruce

In my experience there needs to be some sort of evaluation/audit completed to identify any proposed improvements. These need to be categorised based on risk and then proposals made as to the benefits of each aspect on potential for either return on investment or prevention of injury, ill health and/or reputation/bottom line impact.

This gives you the balance. In truth the budget for standard requirements such as training and fixed maintenance (fire etc.) should be built into the company operational expenditure. Any further capital expenditure then has to be proposed as a business case to whoever has the spending authority.

Beware not to go in with big spending plans; this will almost certainly upset people.

Good luck

Ian

Posted By Bruce Wayne
Thank you for the above responses. I am aware of cost analysis techniques, however it was really just a question on general figures that others may use as unfortunately, as with most companies, financial departments and accountants want costs and percentages to analyse against profit margins. I was asked to give an estimated figure as a percentage of turnover to the cost of a safety budget.

I don't personally think it is relevant against the moral cost and the financial, or otherwise cost of a serious incident, however it may not be a good idea to appear to contrary when applying for a job when the MD started out as an accountant!

Thanks

Bruce.

Posted By Ian G Hutchings
Hi Bruce

I haven't come across any way of calculating a % of turn over or profit for a H&S budget. Others could perhaps give an idea of spend for a similar company but there are probably too many different factors at play.

At least the company are asking the question which is one positive. You could use this as an opportunity to show your knowledge by giving them a few options.

There are obviously the must have operational costs for basic training, plant qualifications, fire equipment and maintenance etc. The difficult part is the capital expenditure that they may not yet realise is required.

I would try and turn this round and say by doing a detailed risk analysis you may be able to save money in some areas and balance this by increased spend to reduce the more significant risk. Asking questions such as "we spent X last year on training our people, what value did this deliver in increased profit and/or reduced risk". Training is often tick box but people don't always measure the benefits. Apart from legal justification there could be areas where you could re-evaluate what they are spending and offer more sensible and valuable options.


Ian