Good afternoon. Welcome to PCI's webinar series. Today's webinar is Safety Culture Development, How to Win Over Management. This webinar is in partnership with Optimum Safety Management. My name is Nicole Clow, Marketing Coordinator at PCI, and I will be your moderator for this session. Before I turn the controls over to your presenter for today, I have a few introductory items to note. All attendee lines are muted. The GoToWebinar toolbox has an area for you to raise your hand. If you raise your hand, you will receive a private chat message from me. If you have a question, please type it into the questions pane, and I will be keeping track of your questions and will read them to the presenter during the Q&A period. Also, a pop-up survey will appear after the webinar ends. Earlier today, we sent a reminder email to all registered attendees that included a handout of today's presentation. That handout for this webinar can also be found in the handout section of your webinar pane. If you cannot download the handout, please email pcimarketing at marketing at pci.org. Today's presentation will be recorded and uploaded to the PCI eLearning Center. PCI is a registered provider of AIA CES, but today's presentation does not contain content that has been endorsed by AIA. Today's presentation is non-CEU. Our presenter for today is Steve Yates. As CEO and founder of Optimum Safety Management, Steve leads a full team of safety professionals and supports staff working to secure the safety and health of hundreds of thousands of workers across North America. As a certified leadership coach, Steve is passionate about developing leaders within his clients' organizations who will value and empower others to realize Optimum's vision, workers everywhere valued and safe. I will now hand the controls over so we can begin our presentation. Nicole, thank you. I greatly appreciate the introduction and for getting us started here today. We are super excited about our relationship with PCI and the membership, as well as the staff. Really thankful for your support of the industry, as well as that of the rest of the staff there at PCI. So thanks for allowing us to present on behalf of PCI today, as well as Optimum. And pretty excited about the topic that we're bringing today. You know, I started my career as a safety professional in the precast industry, and I have had a variety of experiences while serving, dedicated right in the industry, but also now as a consultant for the last 17 years across a variety of industries. And I'd like to bring a little bit of that experience today and share that with the folks. And hopefully it's helpful to give you a new vocabulary, maybe to speak with some of your management team representatives or those that you're trying to gain buy-in as we talk about this important topic of safety culture development. We obviously need to gain the support of management, and I think it's an important topic. I found it to be one that I've been engaged in studying for the last 25 years of my career now. So as we get started, we'll ask a quick question of everybody. Have you ever heard any of these types of statements before? And the question is, when people ask you things like, you know, or make statements like, you can't produce safely and efficiently, or safety is a necessary evil, what's the benefit to spending all the money? Now we need to ask ourselves a question, and that is, what really are people saying behind that? We always see the kind of the surface level statement or question they might ask or say, and the question is, what's going on beneath that? What are the motives or the underlying questions? So some of the things to consider are, who do people report to when they make a statement like that? Are they the business owner, or do they report to the business owner? Do they report to the president, or to an operations person? Really what we need to be asking ourselves is, what world do they live in? What type of language are they speaking? What are really the motivators in the people that they're reporting to? And then, who are those folks reporting to? What language are they speaking? Is it production? How many square feet of concrete warehouse panel are they getting out that day? How many architectural panels, or how many double Ts have they manufactured that day? What are the profits of the business that they're reporting to? Here's a new one that's in the environment today for publicly traded companies. I know we do have a few of these within the precast, within the industry, within PCI's membership. ESG says the environmental, social, or governance requirements that the SEC, or Security and Exchange Commission, might be placing on that business as a publicly traded company. If we begin to understand the languages that they're speaking, we can really then begin to be an effective communicator. We know from interpersonal communications, or human communication, that we need to be able to speak the same language to really be effective, or we need to use an interpreter. I have a real live example of this for myself and my family, going back about probably 10 years now, maybe even a little bit longer than that, come to think of it. We did a missions trip where we went as a family with a larger group to Moscow. When we landed in Russia, we quickly understood that we needed an interpreter for everything, because there were no English subtitles running on the screen of our eyeballs, helping us to understand the translation of the language that was either being spoken or written, that we were now having to engage with. So the question is, when we think about this as safety professionals, or maybe human resource professionals, now we have probably some business owners, or executive management on the webinar today. The question is, as safety professionals, when we're trying to communicate with our management teams, we speak in a particular language. And a lot of times, as a safety professional, we're speaking in the language of code, or regulation, EPA, RECRA. So a lot of the operations team that we're speaking with, it sounds like a lot of blah, blah, blah. And I say that tongue-in-cheek, because we need these codes, we need to understand them, we get that. But it's almost like an engineer, a structural engineer, speaking in structural engineering language. I don't have that background. I can understand a little bit of it, but to me, a lot of times, listening to engineers speak, of which I'm one, I'm a mechanical engineer, but when I hear engineers speak their language, it's almost like eating dry granola. You know, it's like that, getting a dry mouthful of oats, it's like tough to digest, right? We need a little bit of milk, and honey, and a little bit of sugar on that, to make it go down well. We need to be able to communicate in languages that people can understand. You know, a lot of times we'll speak in language of reduction in injury, illness, fatality rates. There's a record-keeping requirement. There's a ethics or morality discussion that we might get into. Sometimes they work, but oftentimes not, right? These motivators are not something that are universal, or that we can say it, and everybody begins to understand it, and agree with it. We get a lot of head nodding. Are all of these viewpoints important? Well, absolutely they're important. If we don't pay attention to the compliance, and the code requirements, and so on, we're going to end up in a lot of problems with our federal regulators. However, we need to remember that when we're communicating internally with management, trying to get buy-in, in order to do that effectively, we need a translator. Well, I want to share one with you that I think is useful to us in a business context. Remember that safety is important, reduction of injury, all that, but every organization that we're working for is a business, and Peter Drucker tells us that the guiding principle of business economics is not the maximization of profit, it's the avoidance of loss. What is he talking about there? Well, you can open a business today, and you can start to make money, you can start to make profit. The issue is that the bigger that business becomes, the more risk it has, and risk management is extremely important, because if we don't avoid loss, we will lose every penny that we make. So, as safety professionals, and those that are trying to build culture, and get buy-in, it's really important that we learn to communicate differently, so that we get a better result. Because we know, a lot of people attribute this to Einstein, he didn't say this by the way, doing the same thing over and over again, and expecting a different result, is the definition of insanity, right? And we all know, I often joke, I've got a thickened section of bone in the front of my forehead, from banging my head against the wall, trying to communicate with business owners, the same way all the time. I had to learn how to take advantage of the translator, because we don't want to become irrelevant, with such an important message, to try and communicate to the business unit we're working with. Now, I want to share with you something that, you know, some of you may be aware of, and some may not. Your brain is wired, so that when you get into fight or flight, that frontal lobe is flooded with endorphins. All of your creative thinking, which is about 95 percent of your brain capacity, is lost, and the five percent, the frontal lobes, where your fight or flight mentality is created, is flooded and locked down, so that you can go into what's called survival mode, when your brain experiences stress, okay? So, if you've ever walked into your manager's office, or the owner's office, and you said something like, we need to get it right, or we're going to end up getting fined by OSHA, and we get kind of a strange look from them, they may be dealing with a business stress that we're not aware of, that will stop them from being able to creatively take in what we're trying to share with them, and get to a solution. So, what we need to understand is that we are dealing with people that are human. They're just like us. If you've ever experienced that fight or flight hormone, you know exactly what I'm talking about, and we need to think about this in a context that can help us to navigate that discussion. So, I want to share with you, these are Stephen Covey's time management quadrants. This goes back to a book he wrote many years ago. Stephen Covey is no longer with us, actually, and his son is carrying out a lot of his intellectual property, and the leadership principles that his father founded, but these come out of a book called The Seven Habits of Highly Effective People. What Covey taught us here is that we manage priorities in four quadrants. We have the urgent and the not urgent columns, and the important and the not important rows. When we get down into not important, not urgent, those are things like Wordle, checking Facebook, making dinner plans, all that. They are not urgent, not important to our day-to-day activities as employees or assets within the business that we're operating. The same with the urgent, but not important. Those are things like junk mail that's popping up in your reminders, even as we speak. You've got mail, you've got mail, right? Telemarketers that are calling your cell phone, email notifications, and so on. Those two boxes are places that are constantly vying for our attention, and we should stay out of those activities if we want to be productive members of society or the business that we're operating in. The not urgent and important box is where we spend most of our day, or where we, I'm sorry, where we should spend most of our day, right? That's in the goal setting, future planning, safety management system development, new business markets, all that type of thing. They're not screaming for our attention, but they're very important. The urgent important box, forgive me, that's where we spend the bulk of our day. The bid that has to be open tomorrow that we're trying to quote, the scheduling, the project management, all the procurement and supply chain issues that we've been dealing with, the union issues and negotiations and labor shortages. That's where we've been spending all of our time in our COVID era as well, especially, right? But see what's getting lost is our safety management system development. It's viewed as important, but it's not urgent until something occurs, right? Until we have some sort of a major incident, injury, OSHA walks through the door, and suddenly that shifts over into the urgent and important box. What we need to find a way for our business unit that we're working with is to work in that not urgent, but important box on some of those aspects on a daily or weekly, monthly or quarterly basis. It's what entrepreneurs know as working on their business, not in it. And as employees within the business, we need to do the same. So remember the translator, right? The guiding principle, it's the avoidance of loss. So where we can bring that to the forefront, we can start to think about the avoidance of loss today before it happens and move it into more of that urgent box where we can work on it a bit more frequently. Hopefully that's making sense to everybody. When we think about the avoidance of loss, we want to think about it in a couple of different areas. So I'm going to present a couple of those to you to try and bring these forefront for you so that we can be thinking about them ahead of having those big events. So first is on the compliance side. So we have two major entities that we deal with that require us to comply with certain standards and keep employees from being injured. And that is OSHA. That's the agency that will come in when we're violating a standard and they will issue a violation. And what we're seeing today is that's about $14,500 for the maximum fine and a serious violation. Now we need to know that this is being adjusted every day or every year, pardon me, with the cost of living. Now it's been typically going up at about three to three and a half percent per year. Those of you that are watching the numbers, you may have seen just today that inflation was stated at eight percent. It's the highest it's been in a long time and it looks like it's not going to stop going up here anytime soon. Now because of certain economic influences that are happening today, it's up at a rate of eight percent. So these numbers can continue to escalate pretty significantly. OSHA is a big threat. However, we need to also consider the workers' compensation insurance. That is a massive cost to most businesses in the heavy and hard manufacturing environment, like the precast environment. We're going to talk more about this in a few minutes so I won't spend much time on it here. So we need to remember that if we're going to use fines and penalties as motivators for upper management, we need to make them industry specific and relevant. The CEO of a precast plant or a manufacturing plant really doesn't care about the fines that were just levied against an excavator across town. You need to find examples within your industry. However, not hard. It is happening, right? OSHA is continuing to be bolstered by Congress in this concept of public shaming for workplaces that are OSHA violators and what they're doing is they're passing legislation, even currently, that will publicize fines for companies and with the intent of trying to hold companies accountable. And then we also want you to know that OSHA is hiring more inspectors here in 22. So for the last two years, OSHA has been almost reclusive where they've been withdrawn and hunkered down within the confines of their agency and sending out notifications on things like injury reports or mandatory reports for amputation and not coming out to visit your facility. They are ramping up, beginning to hire more inspectors and they will be increasing their inspection frequency soon. Even today, they're starting to ramp that up. Let's shift over and talk about workers' compensation insurance as a motivator for a minute because oftentimes the reaction of business owners or operations executives and management when we talk about, you know, the opportunity for OSHA to come in and inspect is they think that's always going to happen to somebody else. Well, what happens to all of us every year is we pay workers' compensation insurance premiums. Some of you may be familiar with the experience modification rate, but I want to just give a quick overview here because I find that a lot of people are not familiar with this. If you want to go out and buy a big screen TV today at Best Buy, personally, Best Buy will check your credit if you don't have cash and they will run your credit report for your credit rating. Well, when we want to buy workers' comp insurance, our carrier will always run our EMR. It's a rating that's calculated each year for every employer in the United States and it basically tells the carrier whether we are average, injuring more than average or injuring less than average people or with a greater or lesser severity than the other people within our NAICS code, or N-A-I-C-S, North American Industry Classification Standard Codes. The formula is calculated over a three-year window with a year of lag. There's a lot there. I'm going to show you an example on the next slide. The significance of 1.0 is that if you are average with your industry, you are 1.0. But if you are injuring more, your number will be higher. If you're injuring less, your number will be lower, and I'll show you the impact of that on the next slide, as well as how long a bubble in that graph lasts. It's very relevant to the financial performance of your business. Now, this can create a competitive advantage for you or not, and it can also prevent certain contracts from being gained because it's a pre-qualification requirement by a lot of general contractors for you to be able to even bid their work. So, if you have an EMR of 1.0, that means you're an average company when it comes to erecting or manufacturing, and most GCs will say, we want to deal with the best. So, a 1.0 or better means that they're wanting to buy from the average, from a safety standpoint, or better than average company. What that contracting firm knows is that if you're better than average, your insurance rates are lower, they should be able to get a better price, and you won't expose them to OSHA problems on their job sites. So, when they calculate, when the carrier calculates the EMR, they calculate it on this three-year window. You'll see here the EMR for this year, the 1.496, which is very high. We just had an example of a company come to us for some help that had a 1.496 multiplier or modifying rate. They had two high years in their calculations and a low year in the middle. So, this year, after a year of lag, they're calculating based on that three-year window. Next year, that first high year will drop off. They'll have a low year, a high year, and who knows what for this year, hopefully low, and their EMR will begin to come down. And then next year, that high year will have two low years again, and it will continue to go down. And then if they can maintain three low years, their EMR should come down below 1.0. So, you see this is a reactive number at a historical level, meaning that it has a lot of historical data and takes three to four years to improve. So, the way this is useful to the carrier and for you to understand is that if you have so many dollars of rate per dollar of payroll times your annual payroll and then times your factor or your EMR, that begins to equal the premium you will pay. So, for an example, if it's about three and a half cents per hour of payroll for work comp premium times the multiplier of almost one and a half, you're going to pay $300,000 in premium. As opposed to if your EMR was only one, you'd pay about $200,000 in premium. And if you were really a good actor and you had your stuff together and you were injuring less people, you'd have about a 33% discount off a normal and your premium would be $136,000. So, these numbers are very prevalent and very important to your employer. And we want you to know this. Maybe you're an operations manager and you're like, okay, why is this guy spending all this time telling me about this? Well, if you're an operations manager, you're spending a lot of time thinking about how many square feet of panel and production you get out the door. But if your EMR is 1.49, you're losing $100,000 worth of profit every year that you have to make up. And if you could run your plant very efficiently and keep your injuries down, you can gain about $70,000 in profit to add to the bottom line. So, it's not always about running the machine faster or more efficient if it's unsafe. If it's safe, you're going to keep your profits and avoid loss. Now, hopefully that should have all just started to tie together for you and you begin to understand that avoidance of loss topic. So, this is a live example, a letter we received from an insurance broker about what we saved one of their companies in one year, about $125,000. This was an employer with about 100 employees. So, it can be very, very significant to an employer. And the question is, if we lose that money, how many square feet of panel do we have to produce to replace that loss? So, we can think about it this way. If we have a selling price minus our cost of goods sold, that tells us what our gross profit is, but we're not done yet. The gross profit minus the overhead of the business, the salaries of the management team, the office, the warehouse, the heat, the lighting, that's all going to come out and equal our net profit then. So, every incident that we have divided by our net profit tells us how many units are required to recover that loss. So, this is a bit of a thick concept for me to present in a webinar, but if you begin to take these slides and think through this and apply it to your business, you will have some powerful tools at your disposal, like right here. If we have a $42,000 incident cost and a $100 per unit sales price with only $5 of net profit, which is very real for most businesses, about 5% net profit goal, it takes 8,400 units produced to pay for that one incident. Now, for the question of the day, what is the work effort in days required to produce that product to replace that cost? And at that point, what is the work effort required in production hours to make that many units? So, I'll give you a quick example. When I was working in the precast industry, we had a brand new forklift that was damaged, cost $24,000 to fix it. I worked out how many square feet of panel, and it was a lot, and how many panels then we had to produce, and I took pictures of the yard, the rows of stacks of panels, and I said, the damage to this forklift equals this many panels. Two photographs on one piece of paper with an equal sign in the middle explaining that. I put it out as a toolbox talk, and I had the foreman talk to their team about it, and immediately what happened is the loss became real because the frontline worker knows how much work it is to produce that work effort. Now, the unforeseen consequence of that toolbox talk was that next week I had to put one out on workplace violence because they all knew who broke the forklift, and they wanted to go kill him because now they had to put all of that work effort in to make back that product and make back that profit. It wasn't just all of a sudden the owner had a big thick wallet that they were going to pull out and buy a new forklift. They had to work to create the work effort to put the forklift right, so hopefully that's really helpful. I'm a little bit tongue-in-cheek and having some fun here, but these are fun topics when you learn how to leverage them to get the results you're looking for. When we start talking about fatalities, the significance of these numbers is huge, so there's a little bit of information here. You can think about, you know, reduction of injury, what has to happen to recover it. This is a bit of a loss model that you can leverage. Now, also, when people start talking about safety and they disrespect the value of it or don't understand it, we want to really understand that there's a significant tie between quality and safety. If you run a plant with good quality, that doesn't necessarily mean it's going to be safer. It can be. However, when you run a plant with good safety, you will almost always find good quality and you will also improve your productivity. You will not have decreases in productivity. Don't believe me? Give me a call. We can talk stories, talk shop about different things that we've seen where safety always improves productivity and quality, and it's proven time and time again by the National Safety Council and so on. Some of the issue is that it's difficult to measure for results because it's difficult to measure things that don't happen. Remember, we're trying to reduce injuries. Therefore, we're measuring things downstream that have not happened, but we can do it when we develop a system of measurable milestones or hard metrics. I've given you some examples here. Hard metrics, there's two different buckets. One is lagging indicators. Injury costs, EMR, a lot of the things that we've just been talking about, but there's also leading indicators and they're very important to track. We can scorecard things like near miss reporting, first aid reporting, obviously an event occurred, but it's a first aid yet, not a recordable or lost time or fatality. Observations doing behavioral and condition observations, and then things like daily equipment inspections or even getting into predictive and preventative maintenance is very, very important in our operating environments. You want to really start having great conversations. We talk about maintenance reliability, maintenance reliability, and that's where we guarantee uptimes within our production environments, and those are great conversations. Give me a call. I'd love to have them with you. It's a lot of fun. Things I'm learning more and more about today, and I would love to share some of that with you, but management will always support a monetary savings. We just have to be able to prove it and then making sure that we're remembering the translator when we're trying to prove and show those monetary savings. What cannot be recovered are things like loss of a limb, the company's image or the reputation, the insurance increase. You can't recover that right away because it takes up to four years, so it's time today to start improving or making sure we retain the low ratings we have for next year and the future, so significant financial loss either. You can see some of those losses. You cannot recover it once you have it, so we want to think about that in a model that we use the iceberg here. It's used frequently for injury costs, and we talk about direct costs, things like this worker's comp insurance premium and medical costs, but the indirect costs are all the things you see below the waterline. Now, if you know anything about what sank the Titanic, it was the ice that was below the waterline. You could only see a very small tip of the iceberg. The bulk of it's below the waterline, and when the boat ran into it, put a big hole in it. Same thing can happen to your business. We want to make sure that we're thinking about the below the waterline costs, so when we talk about injury costs, we talk about direct costs. That's the above the waterline. National Safety Council does studies on this every year, and they just updated the model. It was $39,000. It's now $42,000 per injury above the waterline. The average precaster is having about five of these for every 100 employees every year. That means direct cost, you can be exposed to about a quarter of a million dollars a year. Now, sometimes you're going to have a hard time relating to that because you're not seeing the significant injuries yet, but injuries that have SIF potential, that's significant injury or fatality potential, have the potential to drown these costs well in excess. They can go well over these costs. Just because you're having the smaller ones doesn't mean you're immune. Don't be lulled to sleep. The average indirect cost, based on a lot of different studies, we're using the Liberty Mutual study here, is two times the direct cost for the below the watermark costs, all of the legal firm costs and lost productivity and all that that you saw on the prior slide. So this means that our total estimated cost per injury is $126,000. So for the average precaster running about five per 100, that's $630,000 a year in undocumented costs, often undocumented. They're hitting your P&L, you just don't know it. And if you did pay attention and you were healthy, you'd save these costs. Okay, $630,000 for every 100 employees. So right about now, there should be some business owners on the line that are going, if this guy's anywhere near accurate, I need to get busy fixing my safety issues. Because the ones that you're not seeing are under the waterline and you will eventually run into them. The actuarial studies show us that about once every seven years, an employer has a big injury. So if you haven't had one in a while, you're overdue. Okay, don't want to be prophetic. I'm just telling you, this is what happens. We get the call from employers after the fact. And we always wish that they would have called us ahead of time, because we could have saved them a lot of money and made their workplace a lot more efficient. And I'm not trying to sell here, that's not the goal. It's what I really want to do is help you wake up so you can fix the issues ahead of time and have the same fervency I have. From 25 years of doing this, I've seen over and over and over again companies, in air quotes now, get religion after they've had an event or had experience like what I'm going to show you here. This is a company with 210 employees that came to us that had 22 recordables in one year. That's the yellow. Then they had 17 days away restricted or transferred. So 17 of those 22 yellow turned red, and they had 14 lost time injuries that now those people were no longer in the workplace. So for those of you that are having a hard time recruiting today, how about losing a bunch of workers due to injury? It's not good. Okay, so here's the point. If you have an employee pool of 210 employees, and you're at the industry average, just the average, not what I just shared with you, which was extremely high, but just the average of five per hundred, that means about 10 are going to get injured this year. So how about we do this? If you want a dramatic example, line all of your employees up, get your president there and say, okay, Jim, just picking a name. Okay, Jim, I'm going to give you targets, 10 of them. And what I want you to do is I want you to walk around the backs of the employees. And I want you to place these 10 targets on the employees that you would like to have injured this year. Because out of this group of 210, 10 of them are going to get injured this year, because we're not going to change anything. We need to make some changes, right? So the point is, you have to show them data in their language, right? Now for some of you, you couldn't get away with it, right? Your personality wouldn't allow it. Maybe your president's personality wouldn't allow it. They'd shoot the messenger, right? They turn around and fire you. There's, I mean, there's all kinds of different environments that we work in. So, you know, use some emotional intelligence about the environment that you're working in. Oh, what did I just say? Emotional intelligence. There's a book out there by that name. If you haven't read it, you haven't seen it, there's a survey in it. There's some great tools in it. You should go read it and take the assessment. I thought I was pretty emotionally intelligent, knew how to deal with people pretty well. When I took it, I was surprised. And some of the things I still had to learn, and I was able to use the teaching mechanism they have, which is awesome, with some online video training tools to walk through it. And it basically mentored me. And I would recommend it for everybody on this call. I don't care if you're a frontline worker or you're the CEO. If you haven't read that book, go take advantage of it. But make sure that we know our audience, right? We want to be thinking about our audience. Every technique I'm showing you today will work with the right audience, but every one of them will not work universally. It's not like one size fits all. You got to pick the tool. So what I want to show you now is some useful formulas you can use, right? So your average recordable injuries per year times 126,000 is the average across the U.S. annual total cost incurred. Your average total cost incurred times the percentage of reduction that you believe you can gain by instituting whatever the processes you're trying to sell your management on gives you your potential one-year savings. Project it out because that savings also runs year over year over year that you keep that improvement intact. So you have your potential year one savings plus potential years two and three over and over again. Remember, whatever you save this year, you save next year, and then mound on top of that potentially. That gives you a potential cumulative three-year savings. Really important for some ROI discussions. What's ROI? Return on investment. Return on investment. It's a gap, a generally accepted accounting practices term that you can calculate. So I'm gonna show you exactly how to calculate it right here. Now you can all of a sudden talk to your financial people in their language if you master this discussion. So your potential one-year savings minus your company's investment. Don't forget, you're gonna spend money upfront. So you don't get to calculate the savings as the return on investment. You have to pay back that money. That money isn't free. So we wanna make sure we understand. Don't go to your management and say, give me a million dollars to do this. I'm gonna save 30,000 a year. They'll look at you like you're crazy, right? You have to be able to pay back the investment. But if you take the savings minus the investment, this is now your return on investment. So let's see this with some real numbers. Let's say your average recordable injuries per year is 11. Your average cost is 126,000 based on the average annuals. So let's say your average total, annual total cost incurred is about 1.4 million with using the direct and indirect costs. Okay, if that's the case, the way we do this at Optimum is we say, our typical return on investment or pardon me, our typical injury reduction is between 35 and 55%. Typically towards the higher end of that, we've seen it as high as 67% in one year. So these processes that you're gonna do for improvement on safety, they do pay. Don't let people tell you they don't, okay? So if we use a conservative 35, average 45, high end 55 for our typical improvements, now you might need to modify this depending on what it is that your improvement is going after. You might be targeting a particular piece of equipment where you're trying to reduce three injuries that you've had every year. So you wouldn't use percentages, you would use the number of injuries. But you can see here the savings. So now your projected ROI, let's say it was a $250,000 investment, paying back that investment with a conservative, moderate or typical return, you now overcome the company's hurdle rate. Now, what's a hurdle rate? Well, if you're a CFO on the line, you know exactly what a hurdle rate is. That's the rate of return on an investment before you will see the investment worthy of making that investment. So for those of us that are trying to get the CFO to give us the money, we need to know we need to overcome a hurdle rate. So if our ROI is only two or 3%, that's not gonna work. They're not gonna give us the money, right? But if we can overcome the hurdle rate for that organization, which most of the time it's around 15%, typically we'll get the money and we can overcome that hurdle and go ahead and move. So what's the ROI? So with these different percentage reductions at a quarter of a million dollars with the $1.4 million cost that we're trying to save, we have a 94% ROI saving $235,000 within the first 12 months after making the investment. There isn't a CFO on the planet that won't move forward with that kind of an ROI. The challenge you'll have is convincing them that it's real, which is the challenge we typically have. But these are real ROIs. You get into the 45 and 55% reductions, it gets absolutely crazy, the ROI, crazy good. So safety pays. There's business arguments to be made all the time for making an investment with safety. Again, your biggest challenge is simply convincing people that they're real. But the statement is always it's management's choice. Management's choice. Once you lay out the ROI, it's proven that numbers are what the numbers are, it's data. You can't argue with the data. You might argue that it needs to be more conservative. You can dumb these numbers down all the way to don't use the indirect costs, just use the direct costs, 1 3rd of the return, and you still have return on investment that well overcomes the typical hurdle rate. It all comes down though to management's choice. So you need to remember when you're trying to convince management, ownership, your CFO to spend money on safety or to make the investment on safety it comes down to their choice. I have had situations where I've proposed an ROI and the organization has chosen not to move forward. Almost always they come back at some point down the road and say, you know what? We're ready to make that investment. We had another injury. And it's humbling then for them to have to come and do that because they have to kind of get over their pride of it. If I'd have made that investment back then, you know, the next statement, that person might not have gotten injured. But either way, remember it's management's choice. Don't get upset. Just know it's not your choice. Let them make the decision and move on from there. But remember that the opposite side can potentially be massive costs or injury to an employee. They're significant choices. And if they're armed with the right information quite often management will make the right choice. Okay, so trust them, but we got to do our homework folks. You know, we can't half bake an idea, come off half cocked and tell people that they need to make a decision that we haven't justified. I have an experience with a person that I really appreciate this guy. And he's a great safety professional and really tried to do the best he could during his career to make improvements in his workplace. He was in a different industry. And I remember him going to his first OSHA 10 hour course that we had recommended he get some training. And he came back after that course and he had really been enlightened. And he walked into his general manager's office and he said, Tony, we got to get this stuff right. We got to do the right thing. Because if we don't and we get caught by OSHA, you're going to end up in jail and you're not going to look good in orange. And that was the way he thought he would sell his upper management on getting engaged in safety. And I can tell you, after the manager stopped laughing and told him to go away and that he was never going to send him to another safety training, we ended up getting that manager on board and they ended up running one of the best plants in their industry over the next several years. But that event was pretty funny and comical. So don't be that way. Remember, we don't want to be irrelevant, right? We want our message to have relevance and it's a very important message. So let's get it to be relevant. Let's do the homework, get the counsel we need and the coaching so that we can get there. One of the starting points to that is right here on your PCI website. If you don't have members access to the PCI website, you are missing it. So get in touch with PCI. Nicole's going to make sure you have the contact information here to be able to do that. Get added to the members access area. Right away, you'll find safety resources on the members only section. And you'll see that there's a number of different workshops that we have offered through the PCI membership. And you can get discounted rates on those. They are great workshops and I'm tooting our own horn here at Optimum. But we really will help you get educated on these topics so you can really succeed in your role. Also, the safety helpline is available no charge to the members. Click on that button, you'll get the information on how to contact us. And Tom or one of the resources here at Optimum will be able to take your call and get you all the help you need. We also have a members only tool that PCI is purchasing so that it's available to you as a member benefit. And you get access to a full toolbox talk library, almost 300 topics there, English and Spanish. And they're available also in an interactive content as an additional paid service. But a lot of great content there for you to take advantage of and free counseling coaching as well through the helpline. The only disadvantage is it's not used often enough. So we would love to hear from you. This is just some instructions on how to get access to the toolbox talks. It's very easy. Eddie over at our staff, Eddie Sauceda loves to set the members up and help you gain access. And those that have it, report that it's been a great tool in addition to their library. So at this point, Nicole, I'm going to invite you back on while I just take a quick drink here and we'll be ready for the Q&A section of our webinar. Sounds great. Thank you, Steve for a great and informative presentation. Like Steve said, we will now start to the Q&A portion of our presentation. Once we did have a bunch of questions come through, the first question being, what is the maximum increase or decrease in EMR rating in a given year? That's a great question. Okay, so the way the EMR is structured, I've already told you that the 1.0 is the average. We know that it can go below. So the first question is how far below? There is what's called a minimum controllable mod and your insurance brokers can help you understand what that is for your particular business. I can tell you within the precast industry when I was running the plan at the company I was in-house for, we knew at that time that our minimum controllable mod was 0.65 and we got our mod all the way down to 0.67. So we were doing really well and the business owners were very thankful for the safety efforts we were putting forward because it was yielding a tremendous result in savings. On the top side, the oversight, it can go very high. So in excess of two. And if you start approaching, companies normally even at 1.1 are feeling the pinch. That's a lot of money to have 110% multiplier on. And then if it starts to get up near the 1.5, it's strangling the business. If it gets much above that, you end up in what's called the work comp pool. And that's where you cannot gain commercial insurance normally. And you have to go into a pool of, I'll say bad actors in quotes. And you're in with all of the folks that have a hard time controlling their performance. Not a good place to be. We have a gentleman on our staff team named Scott Razor. Scott's the former president of Zurich's North American Construction Group, ran their $1.6 billion a year division. And Scott just did a webinar, or pardon me, a seminar with Aaron Gelb from ConMaceo at the recent conference, pardon me, the precast showing conference and committee days. That was the term I was looking for. But Scott is available through our helpline. If you're having trouble with your EMR being too high, feel free to give the helpline a call. We'll get you in touch with Scott and he can give you some advice on techniques to get that number down. Nicole, hopefully that helps. Sounds good, thank you. Sorry, with a few more questions, our next question is, have you had any cases where management still wouldn't move forward even with the monetary savings? If so, what did you do? Yeah, yeah, I actually have. So I spent a lot of time early on in my career with a company that we had had an issue with some lagging injuries with this company. We built a case study for them showing maintenance costs as well as the injury costs and lost productivity because of a piece of equipment that was constantly failing and also causing injuries. It had actually injured two people's backs by this time because of the kind of the rework they were having to do in the area to keep the machine functioning. And I built a whole case study out and showed them the return on investment. And it was substantial. And it ended up that the business decided not to move forward with the solution. And it left me scratching my head even to the point where a little bit later we had a third back injury at that employer because of it. And what I came to find out was that there were factors that you'll hear people say they were above my pay grade but from where I was standing as a consultant to that organization, I didn't have purview over the cash issues that they were facing and some of the bank financing issues and so on. They were cash constrained and literally did not have the money to institute the solution. So that's what I was saying towards the end of the webinar. Sometimes we just can't see from where we're at and we have to trust that the management has good intentions. Give them all the data they need and then you've got to trust them to make the decision. And sometimes, unfortunately, they can't tell you why. Owning a business, I understand that. I didn't understand that then. So hopefully that's helpful from a perspective standpoint. Wonderful, thank you. Our next audience question is what was the name of the book you suggested as read in your previous, well, one of your previous slides? Ah, yeah, it's called Emotional Intelligence or EQ. I believe it's written by, anyway, you should be able to find that. If you search emotional quotient or emotional intelligence, you're gonna find the book and you'll know it because it has Gallup, I believe is the company. It has a survey in there. You'll have a scratch off code in the back of the book to go and take the survey online and it'll give you your results. So that's the book you're looking for. They'll have that process in it. Perfect, thank you. Our next question is some companies can't bite off an investment amount of $250,000. What kind of reduction of injury might they expect? Um, so I think the kind of the underlying question there, if I'm reading it right is, you know, if we don't have the cash to spend 250,000 on an improvement methodology, which, you know, depending on the size of the organization, you may or may not ever wanna spend that kind of money. And some of you will spend a lot more than that based on, you know, maybe machine guarding issues at multiple plants. If you're one of the large systems of pre-casters that we have in membership at PCI, you know, where do we start, right? If we can't spend that kind of money. It's always a good idea to engage in some sort of an assessment. And what I mean by that is, you know, if you think about our day-to-day lives, we're gonna leave our home and we're gonna drive on vacation to Myrtle Beach. I'm gonna open up Google Maps and I'm gonna type in Myrtle Beach and it's gonna give me the route to get there. And it'll identify based on my GPS coordinate where I sit today, right? So if we begin a journey of improving our safety, which most organizations will relate to that, it is a journey. It's not something that, you know, happens today and it's done. It's something you're gonna engage in over the long term, kind of a continuous improvement journey. We need to know where we are today and we need to really clearly identify where we're trying to get to. And then we need to know the route to take. And a lot of times engaging with someone like an optimum, whether it's optimum or someone different, you'll find that they have, and we have in a assessment tool that's offered as part of the safety culture improvement process we have with PCI. And what that does is it affords you the opportunity to spend a little bit of money, not much actually at all, compared to the potential improvement results and map out exactly where you are today and how to get to where you wanna go. And then oftentimes in that process, like we've developed as an action step set. And a lot of those action steps are things that you can do internally to immediately gain improvement for safety. So that's a great starting point, Nicole, for a lot of organizations and one that can really bring great results. So hopefully that's helpful. Sounds great, thank you. Unfortunately, that is all the time we have for questions. On behalf of PCI, I'd like to thank Steve for a great presentation. If you have any further questions about today's webinar, please email marketingatpci.org. Thank you again, have a great day and stay safe.

Safety Culture Development

Management Support

Communicating with Management

Financial Savings

Insurance Costs

Workers' Compensation

Safety Performance

Return on Investment (ROI)

Trust in Management