Measuring your Company's Safety Performance: Part 2, Leading and Lagging Indicators

Last blog post we discussed how a popular mainstay of measuring safety effectiveness isn't all it's cracked up to be. Incident rates, longtime make-or-break measure for how your safety program is doing... don't do what we've long thought they do.

So what now?

Safety has long suffered from a data problem. As more of the world moves into gathering and analyzing data, the traditional way of measuring data in safety means there is less data available.

Think about it -- the safer your company becomes, the less incidents happen (which, obviously, is great!), and then the less information you have about what might go wrong.

As time goes on, you can become blind to risks that might be bubbling under the surface. New risks that you haven't recognized yet, and older risks that may be increasing again.

This is scary but manageable. The solution isn't to throw up our hands and give up: we just have to be smarter about what data we measure.

The more traditional way of data gathering in safety is called "lagging indicators." This is because we measure something after the fact. Common lagging indicators include:

 

- The big baddie we already talked about: Incident rates

- Worker's compensation number of claims and costs

- Fines from regulatory agencies (OSHA, etc)

- Lost workdays

- Property damage costs 

 

There is nothing wrong with measuring these, but it is important to recognize their limitations. These are all "rear view mirror" perspectives. Once you've addressed the root cause of the kinds of incidents you are seeing, there will be less of this type of data available. Congratulations, you're moving toward safety success! But, unfortunately, your work is not done.

The next phase is managing those risks that you don't necessarily see. You need a "forward view." This can be provided by intelligently measuring what are called "leading indicators." Most of these relate to measuring proactive actions taken toward identifying risks and preventing incidents. While you will never know for sure that you've prevented a specific incident, this data will show how proactive your company is being in reducing your risk. 

 

Some examples of leading indicators include:

- Rate of incident investigations closed vs. open

- Rate of action items identified during incident investigations closed vs. open

- Rate of safety inspections completed on time 

- Rate of employee attendance at safety trainings

- Number of toolbox talks completed 

- Number of job safety analyses (JSA's) completed

- Number of risk assessments completed

- Number of near misses reported (while near misses themselves are lagging indicators, the fact that employees report them are leading indicators!)

- Rate of equipment inspections completed as required

 

Measuring this data opens up several important possibilities. First, it gives you an opportunity to assign SMART annual safety goals to employees, if your employees already have annual performance management goals. These goals are in their control, as they are not tied to incident rates. Did they attend all assigned safety meetings? Did they complete their equipment inspections in the correct timeframe? This gives employees ownership of the safety program as well.

Second, this data is invaluable to help with that "forward view." While we cannot ever know the future, these measurements help defray those unknown risks by demonstrating that your company is proactive.

Third, this is a great source of data if you ever do come under investigation by a regulatory agency. You can absolutely show all the proactive actions taken by your company in an attempt to make your company safer.

You don't need to start out measuring each leading indicator above -- why not pick a couple for this next year and start there? The constellation of leading indicators you choose must make sense to you as a company.

If you have any questions at all, reach out to TT&S for consultation on what type of indicators might make the most sense for your company to measure. 

 

 

Measuring your Company's Safety Performance: Part 1, the incident rate

 

Have you ever considered ways to measure your safety program for effectiveness?

Many companies decide to use their incident rate as a safety measuring stick. After all, it's a metric commonly used in contractor vetting processes, and it's reported in the aggregate by industry under the Bureau of Labor Services (BLS). Must be a good thing right?

Well... this is one of those cases where the 'official' metric is not the best fit, especially for smaller companies. Turns out, your incident rate is statistically invalid unless you happen to be calculating with millions of work hours. Check out this quote from the April 2021 Professional Safety Journal: 

"Unless hundreds of millions of work hours are amassed, the confidence bands are so wide that TRIR [incident rate] cannot be accurately reported to even one decimal point. The implication is that the TRIR for almost all companies is virtually meaningless because they do not accumulate enough work hours." (https://www.eei.org/-/media/Project/EEI/Documents/Issues-and-Policy/Power-to-Prevent-SIF/PSJ---TRIR-Paper.pdf)

This whole article is pretty down about incident rates in general. First, they do not predict or show any correlation with fatalities, which means that companies with higher incident rates are no more likely to have a fatality than a company with a lower incident rate. This is a topic of active study in the safety world, as it's becoming more apparent that the strategies to prevent lower-impact incidents are not always the same ones that are helpful in preventing higher-impact incidents, such as fatalities.

Further, incident rates are sometimes embedded into performance management systems for employees. For many companies, it is a requirement that one annual goal for each employee be safety-related. This is a good step in general, but incident rates have a way of sneaking into these goals. For frontline employees, this can mean "no incidents or near misses," which discourages honest reporting, and for managers the goal is often "an improved incident rate." However, as the article discusses, the improved incident rate is subject to random variation much of the time.

The article also says that incident rates are not helpful in gauging program effectiveness over the short-term. It might be easy to infer that because your incident rate went down over a couple years, you must be doing something right. Incident rates are popular measures for current safety initiatives for companies for this reason. However, as the article discusses, incident rates are not useful for evaluation unless there's 100 months of data -- that's over eight years. There's no room for gauging shorter-term initiatives if that's the case.

Well... what now?

Over the next couple of weeks we'll be discussing better strategies to measure your safety program. If you want to get a leg up, you can go ahead and search up "leading and lagging indicators" -- but it's a wild world out there, with lots of information. We're hoping we can break it down into manageable pieces for our member companies in the next few posts.