Business of Building e-Source - 06/25/2003 (Plain Text Version)View Graphical Version | Subscribe to NAHB Publications | Email our Editor... Safety: A Wise Investment for Your BusinessJune is National Safety Month, but it’s smart to focus on keeping your employees safe and on preventing costly accidents all year long. Tallying the final cost of workers’ compensation insurance amounts to more than a simple figure. Most employers look only as far as their annual premium because that’s what they see as the actual out-of-pocket expense. However, looking below the surface reveals significant indirect costs that affect the proverbial bottom line — costs that are often uninsured and, as a result, unrecoverable. Some examples of indirect costs resulting from a jobsite accident include:
Studies by the National Safety Council reveal that indirect costs are estimated to be between four and eight times the direct costs of the accident. The most common illustration of this concept is depicted as an iceberg where the direct costs — those paid by workers’ comp insurance — are represented by the portion above the water line and the indirect costs are represented by the much larger portion beneath the water line. How does this influence the bottom line? Here’s the math: A business with an 8% profit margin and $2 million in sales generates $160,000 in profits. However, a single workers’ compensation loss can carry $10,000 in direct costs, and an estimated $40,000 (4 x $10,000) in indirect costs. Thus, the accident generates a total cost of $50,000, reducing profits by 31.25%. Simply put, with a profit margin of 8%, you would need to have an additional $625,000 in sales to make up for the loss. Safety awareness, hazard recognition and controls, accident investigation, and corrective action are all critical elements of a comprehensive safety program. In addition, the plan requires active involvement and commitment from top managers and supervisors along with accountability for goals and performance objectives to succeed. Investing in an aggressive and proactive safety program pays dividends long into the future for a business and its employees. Focus on the following key areas when establishing a comprehensive accident prevention plan:
If an accident occurs, manage the claim and return the employee to work as soon as practical, using light duty where possible. Brad Mahalak is a senior loss control agent with Citizens Management, Inc., a division of Citizens Insurance in Howell, MI. Reprinted with permission from the April 2003 issue of Building Business & Apartment Management magazine, published by the Building Industry Association of Southeastern Michigan. NAHB's Construction Safety Program Manual: A Guide for Home Builders and Contractors is a practical guide for developing a comprehensive safety program and accident prevention plan. The publication includes a model safety program on disk that can be easily customized and adapted to meet your business’ safety needs. It costs $22.50 for NAHB members and $25 for non-members. Call 800-223-2665 or go to BuilderBooks.com to order. New York City Agrees: The ICC's Model Building Code Beats NFPA 5000That conclusion was reached by a specially appointed commission and accepted by New York City Mayor Michael Bloomberg at the end of May. In their comparison of the benefits of the NAHB-favored International Code Council's International Building Code (IBC) and the National Fire Protection Association's NFPA 5000 building code, commission members rated the IBC as preferable in every category they measured. They examined the two codes on the basis of their formats and the ease with which they could be adapted to meet the city's needs. This is a great victory for the ICC and the NAHB-supported effort to adopt a single coordinated set of building codes nationwide. NAHB backs the IBC, not NFPA 5000, because housing affordability was not adequately considered when the latter code was developed. The home building industry realizes that it’s easier and more cost-effective to have one set of model codes, not two. Contractors would have fewer code sets to answer to, and they’d save money on buying code books. And, depending on state adoption, there would be just one clearinghouse for building code interpretation. Read the New York City Department of Buildings statement online, or contact NAHB’s Matt Dobson at 800-368-5242 x8290 for more information. Click here to read a summary of the Code Wars issue online. Congresswoman Cites NAHB’s Contribution to Economic Stimulus PackageIn an address on the floor of the House of Representatives on May 22, Rep. Sue W. Kelly, chair of the House Financial Services Subcommittee on Investigations and Oversight, praised NAHB for helping to shape a historic $350 billion tax-cut bill that included provisions to ensure that all segments of the housing industry would continue to strengthen the national economy. Since early this year, NAHB had been working with the Administration and Congress in support of legislation that would provide a significant boost to the economy, including housing, and create new jobs quickly. The association also worked steadily to ensure that President Bush’s proposal to eliminate double taxation of corporate earnings would not do any unintended harm to the Low Income Housing Tax Credit. In the final bill that was signed into law by President Bush on May 28, the dividend exclusion proposal had been replaced by a reduction in ordinary long-term capital gains tax rates that also applies to dividend income. This provision actually created a new incentive for corporations to invest in the tax credit. Click here to read the full text of Rep. Kelly’s remarks in the June 3 Congressional Record. Business Opportunities from NAHB’s CouncilsProud of your work? Show it off and give your marketing efforts a boost by entering one of these award programs:
[return to top] Builder Bright IdeaTry these tips from the 2002 Custom Builder Symposium: Thomas Hudgin of Wilmington Quality Associates in Wilmington, NC, believes that the difference between being a boss and a leader often comes down to coaching. He told participants in his seminar, “Powerful Leadership Practices for Today’s Business Environment,” that good coaches:
Do you have a great builder tip to share? E-mail it to us at jtunick@nahb.com. The NAHB Custom Builder Symposium is a two-day program full of education and networking opportunities designed exclusively for custom builders by custom builders. The 2003 Symposium will take place November 14-16 at Disney’s Contemporary Resort at Walt Disney World in Orlando. For information, visit the Custom Builder Symposium page on www.nahb.org. [return to top] Member Advantage: Save $500 on Mobile OfficesWith 90 locations in North America and more than 50 years of experience, Williams Scotsman has a money-saving plan specifically designed for NAHB members that offers up to one month's free rent. When you sign up, your seventh month is FREE — a maximum value of $500. Williams Scotsman offers a full line of temporary-space products and accessories, including sales office and centers, construction trailers, mobile offices, storage products, and floor plans and specifications. For more information or to contact us directly, please visit www.NAHB.org | ©2003, National Association of Home Builders |