Bring some science to your HSE strategy

The final part of the HSE management – Comply, improve, excel series

Blog 3

How are your Health, Safety and Environment (HSE) plans formulated? Audit results, past incident history, a known legislative non-compliance issue that needs to be bridged?

These inputs can all point to a body of work sufficient to keep the organisation ‘busy’ on HSE – but will they move the needle in keeping people safe and healthy, and reducing impact on the planet? And whilst we’re talking about it, who designed those plans?

Stepping out of HSE management – let’s think about the Hotel Industry. Our strategy is to grow, we have some capital, and want to build a new hotel to generate more revenue. We know the outlay and can research average room rates for a given location, before we build our hotel and operate it against a planned P&L – in short, we can approach the project with a level of confidence, and measure it’s success.

Would you sign off the investment if you didn’t know how much you might be able to charge for a room, or what the staff costs to run the hotel might be? Further still, would you sign off the investment because an individual "specialist" told you it was the right thing to do?

These questions might sound a little daft – but for many organisations, it’s a fair reflection of how planning on HSE happens. HSE outcomes are notoriously difficult to measure, and often (likely unwillingly) the Head of HSE is tasked with coming up with a plan on behalf of the organisation, and trusted in their proposed plans because they’re the "specialist".

"Advanced data analysis is being used throughout industry to achieve things previously thought impossible"

It would seem better for all concerned to bring a little science to the equation.

Measuring HSE success continues to challenge organisations; but away from hard measures, there are many opportunities to improve the analysis of HSE-related information. Advanced data analysis is being used throughout industry to learn more about what drives performance, and beyond learning – even extending into using that analysis to automate decision making.

On a less grand scale, but no less impressive, is the ability to use data to support effective planning and monitoring of HSE management. Combining disconnected data sources can reveal previously hidden correlations, which hold the potential to better target factors which contribute to increased HSE risk, with greater accuracy, and less ‘gut feel’.

In our fictitious hotel company, we might choose to combine data relating to accidents, audits, training information, occupation levels and online customer feedback reviews to help highlight statistically significant patterns. As illustration, we might learn that;

Hotels with declining customer feedback scores are more likely to have a spike in accident occurrences

Good audit scores may tally with a significantly lower incident frequency. However, when incidents do occur they tend to be much more severe in nature than average; or

Completion of current safety training has no statistically significant impact on audit scores or incident occurrence.

"The application of data analytics provides a valuable source of data driven insight."

These illustrative insights might have previously existed as ‘hunches’, but few might be brave enough to step forward and declare that current safety training arrangements are ineffective – traditionally it’s easier to ‘do more’ HSE work rather than to challenge the effectiveness of what is in place already – the possibilities provided by data analytics could change that.

There are a number of ways that organisations could benefit from using analytics in making decisions around HSE; on its most basic level, it may be best used as a tool to:

  • Prove or disprove existing hypothesis ("we’ve got a hunch, but haven’t ever felt certain"); or
  • Generate new insight through exploration ("we think we’ve tried everything, where should we turn next to better manage risk").

Is your strategy going to deliver best impact?

Those responsible for HSE strategy generate the greatest impact by making good choices. Making the most of data to support consistently great choices can heighten individual impact, better prioritise organisation resources, and most importantly support a safer and healthier environment.

  • How did you arrive at your current priorities – who was involved in prioritisation of effort, and is there any room for hunches that might be derailing the most effective use of resource?
  • Are there any long-standing hypotheses that your organisation holds dear around HSE, that have never been proven to be true? Could the application of analytics support a clear conclusion?
  • How targeted is your approach to HSE? Does your business rely on blanket approaches to topics such as training, auditing and assessment – could some science help you customise that approach without exposing the organisation to unnecessary risk – and how might that customisation help you excel in creating a safer environment, with the same or less resource?

 

For any further information, please contact:

Callum Irvine

Director | Deloitte LLP

+44 20 7303 6277

cirvine@deloitte.co.uk

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Posted on 30/07/2019 | 0 Comments

Re-thinking your approach to HSE compliance

Part of the HSE management – Comply, improve, excel series

Blog 2

Some organisations have invested considerable resources in developing a granular, global, picture of their businesses’ Health, Safety and Environmental (HSE) legal compliance. Indeed, there are a number of niche service providers of this regulatory content, others have made little or no effort to formally recognise the detailed obligations placed on their businesses.

The fact that approaches can differ so considerably, suggests that the very detailed and potentially costly approach, isn’t universally effective or required – if it were, surely all organisation’s would be doing it by now?

There are several stages in developing a robust legal compliance framework; from identifying all applicable obligations, to translating those into meaningful business requirements, before evaluating current compliance levels and taking any action to address identified ‘gaps’.

It’s only this last action to address gaps, that has any real bearing on risk level – and in practice, many of those ‘gap closing’ activities may simply be about tick-box compliance, rather than addressing real risk – which if significant, would likely have been revealed elsewhere, already.

"In practice, creating a granular register for legal compliance will do little to exercise this duty [to manage risk]"

Those who’ve taken a detailed approach may look over the fence with frustration, wondering how their less well-structured peers are surviving without a detailed and granular process in place. We have seen a few factors in play:

  • Practically all organisations have access to suitably competent HSE resource. This resource can guide the business toward good practice informed by vocational qualifications and prior experience;
  • In a world where it’s increasingly common to experience more than one employer during your working life, new hires bring with them experience, including HSE knowledge, gained from other organisations and may help to spot any obvious gaps. We average six employers in a lifetime, according to Association of Accounting Technicians (AAT); and
  • At the heart of HSE, particularly in the UK, organisations are legally obligated to ‘manage risk’. Such a duty has no clear endpoint, and in practice, creating a granular register for legal compliance will do little to exercise this duty. Therefore, regardless of the chosen approach to legal compliance, all organisations are primarily engaged in a pursuit to ‘manage risk’ which may be unique to their operations.

"Whilst there’s no clear answer, there absolutely is a case for all organisations to take stock of their approach to legal compliance"

Of course there is more to the story; ISO standards for HSE imply a need to document relevant legal requirements, many of the fundamental duties placed on business are common across multiple jurisdictions and so are familiar to most, and in some cases, organisation’s develop their own ‘ruleset’ which is seen to supersede specific local legal requirements; instead taking the most stringent local requirements and applying them globally.

Whilst there’s no clear answer, there absolutely is a case for all organisations to take stock of their approach to legal compliance, to understand where they sit between the coordinates of a granular register and ‘not knowing’, before asking whether they are where they need to be.

The place businesses ‘need to be’, invariably, is the place that enables them to best manage the risk of harm, with the finite resources available – a complex legal compliance programme may therefore be counter-productive for some.

Determining where you are, and should be

Answering some headline questions could be useful in framing the conversation for your organisation:

  • How diverse are your operations, both geographically and in the activities you perform, are you at increased risk of encountering unusual internal practices, or external requirements?
  • What degree of assurance is comfortable to your organisation compared to the effort to maintain that assurance, is ‘clause level’ confirmation of compliance essential?
  • Is your organisation managing risk well, thereby reducing the chance that a technical compliance issue could result in harm and therefore trigger regulatory action?
  • Is your organisation connected well within the industry, exposing you to good practice and learning opportunities between peers?

Complexity and strong performance are not inherently linked, and that’s almost certainly the case when managing HSE risks. There should be clear line of sight between any investment of effort, and a proportionate benefit to the organisation. Putting a scale to the benefit you expect to realise from investing in a HSE regulatory compliance programme should be core to determining type of approach will best fit your organisation.

Coming next: Bring some science to your HSE strategy

 

For any further information, please contact:

Callum Irvine

Director | Deloitte LLP

+44 20 7303 6277

cirvine@deloitte.co.uk

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Posted on 23/07/2019 | 0 Comments

Switch on a smarter approach to HSE

Part of the HSE management – Comply, improve, excel series

Hse

Many organisations continue to face challenges executing effective Health, Safety and Environmental (HSE) programmes, despite the widespread availability of digital systems intended to bring structured, user friendly and robust replacements for error prone ‘pen and paper’ approaches.

"Few organisations have explored the potential impact of today’s more innovative technologies on HSE"

There is a strong case for reinvention of the way businesses achieve HSE outcomes. Many incumbent digital solutions were born in a time when the ambition was to replicate paper forms in digital format. Since this period of earlier adoption, the world around us has since progressed at an astonishing rate. Few organisations have explored the potential impact of today’s more innovative technologies on HSE – where a wholesale redesign is possible, rather than a simple ‘digitisation’ exercise (think of the leap to automated passenger recognition via CCTV rather than simply having a ‘digital boarding pass’ on your phone).

There are a number of clear examples where application of the right technology could free up time burned completing ‘HSE processes’, redistributing that effort to focus on managing an organisation’s most pressing HSE risks.

"A need for documentary, rather than documented evidence"

The recent publication of ISO 45001, the first globally recognised standard for health and safety management (replacing BS EN OHSAS 18001), brought a subtle but key change;– a need for documentary, rather than documented evidence – paving the way for organisations to demonstrate compliance beyond the constraints of the written word; video, photographs and audio will be pervasive forms of communication in the HSE management system of tomorrow.

Technology products that leverage ‘non-written’ media will be front and centre of the paradigm shift in HSE management. Solutions that are within our reach today include:

  • Integration of multiple data systems to automate previously cumbersome efforts to collate incident investigation information; such as CCTV footage, training history, operational data, and past relevant incidents.
  • The use of video analytics to automate observation based auditing (such as behavioural based safety audits). Managers will be able to measure compliance levels ‘round the clock’ in place of the snapshot previously provided by a single auditor. Real time results enable managers to measure the impact of their instructions; i.e. "did my start-of shift safety briefing help reduce the number of non-compliant actions compared to yesterday?"
  • Location tagged photos to report hazards and trigger notification to managers who enter a defined ‘geofence’; i.e., walking within ‘X metres’ of the reported hazard, allowing prompt action – reducing the reliance on computer access to ‘search’ for issues.

Making use of available technology to achieve HSE outcomes can help bridge the long-standing gap between business expectations and employee engagement levels on the topic; bringing simplification to users, reduce processing time and help make the outputs more impactful.

Are you ready for change?

Consider:

  • Where have you already used technology in your HSE arrangements, and are those systems in good health (being used pervasively, and producing good quality data)? If you use multiple systems, is there a "single truth" dataset used by all?
  • Do those systems meet the needs of the operators; presenting information when and where it’s needed, in a format that’s easy to interact with?
  • Where you have deployed digital systems, does this positively support employee engagement across all levels, or does the use of technology exclude the engagement of ‘non-computer-based’ colleagues?

Confidence to succeed responsibly

Many of the most impactful opportunities facing businesses today require vision and confidence as they largely don’t exist as ‘off the shelf’ solutions. Technology is advancing rapidly and digitising processes in a business saves time and resources which can be allocated elsewhere in your business. In our current world, where HSE is an ever increasing importance for companies, technology can reduce the likelihood of incidents and in turn increase productivity and general morale for the company.

Coming next: Re-thinking your approach to HSE compliance

 

For any further information, please contact:

Callum Irvine

Director | Deloitte LLP

+44 20 7303 6277

cirvine@deloitte.co.uk

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Posted on 16/07/2019 | 0 Comments

The good corporate citizen: is health and wellbeing the next new reporting requirement?

Orange

Over recent years, the range of subject matters that companies report on under the banner of ‘non-financial reporting’ has proliferated. No longer is non-financial information limited to select few environmental or social KPIs, such as carbon, energy, water, waste, and community investment. Companies are now reporting – both voluntarily and in line with increasing reporting requirements – a more holistic and diverse set of indicators, with subject matters including gender pay, occupational health, culture and corporate behaviours, board composition, and workforce diversity.

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Posted on 14/05/2018 | 0 Comments

Regulatory Outlook 2018: Focus on Consumer Products and Retail

Compass

In our recent blog – General Regulatory Outlook 2018, we pointed out that the “good corporate citizen” agenda is progressing and will be trending in 2018. This agenda will be even more relevant and topical for the consumer products and retail sectors who, partly due to their close and constant interaction with the public, are facing increasing investor and consumer pressure to act ethically.

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Posted on 28/02/2018 | 0 Comments

Telcos and the PSD2 Exclusion – what next?

PSD2 image
While businesses around the world are busy getting ready for GDPR, another wide-reaching EU regulation crept up and took many outside the Financial Services industry by surprise in January 2018 – the Payment Services Directive 2 (PSD2). 

PSD2 removes the previous easy-to-use exemption for electronic communications providers. Instead, it introduces a much more limited exclusion – and if they want to exercise it, they must provide an annual independent audit opinion relating to it. If they are unable to use the new exemption, they may need a full Financial Conduct Authority (FCA) licence as a payment institution.

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Posted on 22/02/2018 | 0 Comments

Regulation 2018: Focus on electronic communications

Outlook Jan 2018

As electronic communication becomes ever faster and ever easier, and the EU ramps up its Digital Single Market Strategy, 2018 will see a steady stream of regulatory change for Telcos and online services providers beyond the GDPR. Key themes include security, consumer protection and competition management.

We’ve pulled together the headlines on EU and UK developments, as a brief overview of what’s coming up. If you want to know more, please click through here for our background document, including a timeline.  

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Posted on 16/01/2018 | 0 Comments

General Regulatory Outlook 2018 - a quick view

Blgs

As 2018 begins to take shape, the regulatory outlook seems dominated by one particular area - data. As the value of the data held by organisations increases, so does the risk from cyber criminals and pressure from regulatory authorities. There is also increasing thought given on how to regulate social media such as Twitter, Facebook and WhatsApp.

However, there are other topics on the agenda – this update covers briefly:

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Posted on 10/01/2018 | 0 Comments

Words cost: the value of plain language

Plain language
Potential net annual cost savings of £250,000 or more should be music to corporate ears. Those ears however seem resistant to the siren song of plain language for regulatory compliance communications.

Evidence shows that small investments in clearer messages save significant time (and therefore money), and improve reader understanding and compliance. For example, in the US Federal Express revised its ground operations manuals, which staff had to search for an average of 5 minutes to find information, with only 53% then finding the right answer. Average search times with the new manuals fell to 3.6 minutes, with an 80% success rate and conservatively estimated annual savings of $400,000. [1]

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Posted on 15/06/2017 | 0 Comments

Failure to prevent offences: are they adequate or reasonable?

Iceberg
The second UK corporate offence of failing to prevent a crime committed by an associated person has just been introduced by the Criminal Finances Act 2017, covering facilitation of tax evasion and following in the tracks of the similar UK Bribery Act 2010 offence.

Most corporates would agree that aiming to prevent associates from committing crimes within the business is the right thing to do, and that the defences of having adequate procedures (for the UKBA) or reasonable procedures in all the circumstances (for the CFA) appear sensible. So this approach could provide a sound solution to the problem of corporate criminal liability. It should, however, be used with caution.

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Posted on 15/06/2017 | 0 Comments