The Bureau of Labor Statistics recently released its national census of fatal occupational injuries from 2019. The total number of fatal occupational injuries was 5,333, a 2% increase from 2018 and the highest number since 2007. In that report, the BLS reported the fatal work injury rate as 3.5 fatalities per 100,000 full-time equivalent workers, which has been steady for the past three years.
These are high fatality numbers, though. Look at the homicide rate in the U.S. It’s 5.8 per 100,000 (4.4 per 100,000 for firearm homicides). If you break down the homicide rate by state, 15 states, including Minnesota, Massachusetts, New York and Oregon, have a lower homicide rate than the work fatality rate. Internationally, at least 106 countries have a lower homicide rate, too—including UK, France, Denmark, South Korea and others.
We would all probably agree that considerable public and media attention is given to reducing homicide—as it should be. Yet worker fatalities are in the same ballpark, with much, much less attention.
With 100,000 contractors and suppliers worldwide in our network, we set out to determine the role of supply chain risk management technology, combined with other measures, to reduce these numbers. We were able to review tracking data from 87,000 of those companies over the last 10 years.
We discovered this technology is critical in safety improvements. We always knew it was an impact, but we didn’t realize how much of an impact technology made in two key areas: prequalification and audits. Those companies using systems and software to measure contractors, and track and monitor employees’ and contractors’ safety before they even step on site can see safety incident reductions of as much as 50% compared to averages from the Bureau of Labor Statistics.
We reviewed the main measurements regulatory bodies track, including Fatality Rate (FR), Total Recordable Incidents Rate (TRIR), Days Away, Restricted or Transferred (DART) and Lost Workday Case Rate (LWCR).
Technology and Prequalification
The first key is to apply technology to your prequalification processes. In all four statistics, companies in the U.S. reduced FR, TRIR, DART and LWCR by about 20% in each category by using prequalification best practices.
Begin by outlining the standards each employee and contractor (and their employees) needs to attain before stepping onto your worksite or working on a job. Of course, you’ll want to exceed industry and federal regulations and also achieve specific standards for your particular company. Most prequalification processes will track training and certification, compliance, safety records, financial health, capacity to complete work and location of goods and services procured.
Efficiently documenting or mapping out compliance is almost impossible without supply chain risk management technology. Manual systems, like folders, paper or spreadsheets, etc., require individually verifying a contractor or an employee every instance they worked for you. Supply chain risk management systems monitor all of the documentation for you, giving you immediate feedback on each contractor or employee for each project.
For example, if a required safety certification expired in December 2020, the system can notify you—and the contractor—that they are out of compliance when that certification expires. These services can also confirm a contractor is certified for a certain project, denoted with a colored indicator that says green is good and red is out of compliance.
Prequalification technology can also help with supply chain resilience, immediately identifying approved contract workers or suppliers, deepening your bench in case something happens with your current suppliers or contractors.
In addition, you can apply prequalification requirements on your environmental, social and governance standards or diversity and inclusion metrics.
Not only did the data show U.S. companies reduced safety incidents, but also companies recognized improvements worldwide.
- APAC (Asia Pacific) companies reduced Total Recordable Injury Frequency Rate by 17% and Lost-Time Injury Frequency Rate by 19%;
- Canadian companies decreased TRIR by 22% and LWCR by 32%;
- European Union companies’ Accident Frequency Rate and Incident Rate declined by 21% and 50%, respectively;
- Latin American companies cut Lost Time Frequency Rate by 25% to 55%, depending on the country;
- Mexican companies reduced TRIR by 24% and LWCR to 38%.
Prequalification Technology Improves Safety Over Time
Companies don’t just see one-time safety gains; they see improvement year over year as they learn where technology can help them make gains. Worldwide, companies see as much as 7% to 8% year-over-year reductions in safety incidents—tracked for 10 years (the study duration).
Supplier Audits Help Take Safety to Another Level
When you add supplier audits to your prequalification processes, you can reduce safety incidents even more. With prequalification only, companies in the U.S. reduced FR by 21% and TRIR by 26%. When they added supplier audits, FR decreased by 33% and TRIR decreased by 46%. Respectively, DART and LWCR measurements decreased from 20% to 46% and 19% to 52%.
While prequalification verifies compliance, supplier audits verify that specific processes and standards are followed. Auditing promotes your health and safety culture.
Companies start by auditing a company’s policy, procedures and training documents. Then, it’s essential to observe performance in the field by an independent party. An auditor will provide specific recommendations for improvement, and then you can coach each contractor or employee on how to achieve that improvement.
When you combine auditing with prequalification, the suppliers/contractors who work for you are not only qualified for the work they are doing but they also better understand your specific safety, compliance, and expertise requirements. You communicate your standards to contractors who want to work for your business. They create processes to achieve those standards. They can also participate in feedback to you to add more efficiency and safety to your organization.
When you have a dataset of hundreds of thousands of data points from 87,000 contractors over the past 10 years, you can imagine there are many more ways to analyze the data. We’ll continue to look at what the statistics tell us about how technology, prequalification, and auditing can improve your workplace’s safety.
With a workplace fatality rate much too close to the homicide rate in this nation, broader attention needs to be placed on workplace safety. However, additional action is needed too. The data verifies the more you implement supply chain risk management technology into your prequalification processes, the more safety gains you’ll make, including reducing the fatality rate in the industry. What we’ve learned is those who also implement auditing make a bigger leap. With both actions, you and others will likely reduce workplace safety incidents by as much as 50%.
Danny Shields is the VP of Industry Relations for Avetta, a supply chain risk management software provider. He is a Certified Safety Professional (CSP) with more than 18 years of field and management level experience across multiple industry verticals.