Top 5 EHS Compliance Mistakes Small Companies Make
Many small companies are in a state of perpetual non-compliance because they put their staff manager in charge of safety.
During my career, I founded three small contracting companies, each with major environmental, health, and safety compliance obligations and risks. I answered to all of the regulatory agencies, including OSHA, the EPA, the DOT, and TCEQ.
As a small business owner with very limited time and resources, I found it nearly impossible to keep up with their long list of complicated and seemingly ever changing rules and regulations.
I really struggled and made just about all of the mistakes a small businesses can make while trying to manage EHS compliance.
But I soon learned it wasn’t just me. During that time and afterwards, I learned about many other small companies making the very same mistakes I made.
This combined experience led me to devote my career to helping small companies manage their safety compliance and founding my fourth company, Berg Compliance Solutions. These are the top five EHS compliance mistakes I've seen small business owners make.
1. Dual-Tasking a Staff Manager with EHS Compliance
This is by far the most common, and potentially damaging, mistake that small businesses make when trying to manage their EHS compliance obligations.
Here’s how it normally unfolds. One day, the company realizes that they don’t have a safety, or maybe an environmental, program and something needs to be done about it. Maybe a high value customer or insurance company asked for it, they had a near miss or a serious injury, or got inspected by OSHA. Whatever the case, the company decides it’s time to build a safety program but is very quickly confronted with a big question: “who’s going to do it?”
Despite all of the more viable and logical options, such as hiring a consultant or an experienced EHS professional, business owners or senior management often decide to take the path of least resistance, which is to task one of their staff managers with the responsibility. Most often it’s the Human Resources Manager, but it could be Quality, Operations, or even Maintenance.
Whatever the case, that poor soul gets the nod and is now expected to magically make it all happen - on top of their long list of other responsibilities.
I’m not pointing fingers because I made the exact same mistake, too - and more than once! Looking back, it was very odd how easily I convinced myself that this was the solution, but I eventually learned how wrong I was and learned it the hard way.
(If you've been tasked with your company's safety program, see Congratulations, You Got the Safety Job! Now What?)
Here’s why this “strategy” almost never works:
- OSHA, EPA, DOT, and state environmental regulations are numerous, often changing, complex, difficult to understand, and even tougher to comply with, even for experts. If you don’t believe me, just log onto one of their websites and start reading. While doing so, imagine trying to apply what you’ve read to your own company. Successfully implementing and managing these regulations takes years of experience and knowledge and it’s totally unrealistic to expect someone with little or no experience to get it done.
- As if that problem isn’t daunting enough, a typical staff manager’s primary role often contributes directly to the company’s bottom line and, therefore, requires the majority of their time and attention (especially if they want to keep their job!) This leaves little, if any, time for managing compliance issues.
Add these two problems together, and it’s pretty easy to see how this strategy is nearly always doomed to failure. Yet small companies across the company continue to make it over and over and over again.
I’ll add one final point. When a business owner or manage makes this decision (i.e. mistake), they almost always believe that compliance is actually being managed, not realizing any of these problems. It’s often compounded by the fact that the staff manager is afraid to say anything for fear of losing their job. Then one day something bad happens, like a failed OSHA or EPA inspection or a serious injury.
Only then does the major error finally come to light. But by then it’s too late, leaving the decision makers to wonder what happened.
2. Outsourcing OSHA Compliance to an Insurance or Workers Compensation Carrier
This is yet another mistake that I managed to make during my career. I believed that my workers compensation (WC) carrier could somehow manage my safety programs, and I’ve seen many other small business owners do the same.
Just like me, many small companies are lured into a false sense of security when their WC loss control agent shows up for their annual loss control inspection and shows them their wonderful “safety resources” web-portal, loaded with all kinds of generic safety plans, resources, and training videos.
If they're lucky, the agent might even offer a quick forklift training session. The experience often gives the company the false impression that this somehow adds up to managing their OSHA compliance requirements.
Unfortunately, it doesn’t. And here’s why: workers compensation carriers are not mandated to manage their policy holder’s OSHA compliance.
Here are their actual mandates:
- Conduct an annual loss control inspection, which normally addresses not only safety, but other non-safety related risks that could potentially result in policy losses. The end result is a very limited overview of actual health and safety hazards, combined with many other non-OSHA related findings. This falls well short of OSHA’s mandate that employers assess and provide a workplace free of recognized heath and safety hazards.
- Provide free safety resources. As mentioned above, your WC carrier has probably showed off their safety resources, which normally comes in the form of a login web portal. I’m not suggesting that these resources aren’t helpful, but the problem is that all of the safety plans, training videos, and so on are generic, meaning they can’t address the actual health and safety hazards that exist at any particular company. This violates OSHA’s requirement that employers develop customized plans and resources to address and control those company-specific hazards. Generic resources simply can’t do that.
- The final problem lies in the fact that any individual loss control agent is typically responsible for a large book of policy holders, often running into the hundreds or more. This means that the agent does not have the time and bandwidth required to manage OSHA compliance for any particular policy holder.
I’ve asked several loss control agents over the years whether or not they have, or even could, manage OSHA compliance for any of their policy holders. The answer has always been an emphatic “no.” Feel free to ask yours, too.
On a related note, I’ve also seen companies make a similar mistake when working with OSHCON (OSHA’s free consultation service). These companies are often lulled into a similar false perception that OSHCON is able to manage their OSHA compliance.
OSHCON's mandates are similar to those of WC carriers, including providing an annual inspection and free generic safety resources. Although OSHCON’s inspections do a much better job of identifying company-specific health and safety hazards and recommending corrective actions, this is actually where the problems normally begin. Once those recommendations are made (which include many “one time” as well as ongoing programmatic corrective actions), it’s now the company’s responsibility to implement and manage them over time. Unfortunately, most small companies really struggle to make it happen, which often results in a persistent state of non-compliance.
3. Buying or Downloading a Generic Safety Manual
I’ll never forget trying to build a safety program for my first company. I started researching all of the requirements, was quickly overwhelmed and confused, and then soon came to the conclusion that the best way to proceed was to order a safety manual online.
"Why re-invent the wheel?" I thought to myself. "I’ll just order a pre-built OSHA compliance manual and will be all set!”
It didn’t take long before I put it on the shelf and forgot about it. I’ve seen many other small companies do the same, not realizing all of these requirements:
- OSHA mandates that impacted employers assess their operations to identify all of the health and safety hazards that exist in their work environment, and then develop a company-specific health and safety manual to include all applicable OSHA standards to address and control each of the identified health and safety hazards. Generic safety manuals almost always contain standards that have no applicability to any given company. This not only means that they can’t meet this requirement, but also means the company is agreeing to manage all of the additional standards that don’t even apply to them.
- Just having a health and safety manual doesn’t meet OSHA standards. OSHA mandates that employers actually implement and manage all of the aspects included in the standards. This includes things like conducting routine inspections, developing and delivering employee training, conducting exposure testing, and creating company-specific procedures. Rather than meeting all of these requirements, many companies make the mistake of buying a generic safety manual and then putting it on the shelf, never getting around to actually implementing and managing these extensive compliance components.
4. Using Generic Online Training and Tailgate Topics to Manage Safety Training Requirements
It’s very common for small companies to subscribe to an online safety training portal that gives them access to a wide range of generic safety training modules. Some of these modules address specific OSHA standards, but many do not.
Many also use weekly, monthly, or less frequent tailgate training topics, often downloaded from the internet. These normally last 5-15 minutes and are delivered by a supervisor or manager (who often doesn’t really understand the relevant OSHA standards).
Again, I’ve done both during my career, so I understand the lure and appeal of doing it.
Here’s why this training strategy doesn’t work:
- In addition to requiring customized health and safety plans, OSHA also mandates that employers develop and deliver customized training programs to address the specific health and safety hazards that exist at the company. Generic safety training, such as the ones found online, can only cover the technical basics of each OSHA standard but fail to address the company-specific aspects. In other words, generic training really only meets about half of OSHA’s requirements.
- Employers should only develop and deliver the OSHA training standards that apply to their company-specific hazards. Companies who subscribe to generic training resources rarely (if ever) assess this requirement, and make the additional mistake of offering non-applicable training or fail to deliver training that is actually required.
- OSHA laws include a requirement that employees are able to fully comprehend the health and safety training that a company delivers. This means, for example, that the training must be delivered in the native language of the audience, that employees are able to ask questions and get the correct answers, and so on. Generic online safety training normally can’t meet these requirements.
- Tailgate training is a great tool for keeping safety top of mind but fails to meet OSHA’s requirement that training includes all technical standard content.
Another related mistake I made and routinely see is delivering training by having employees read safety procedures on their own and then having then sign off on the document. This “training” method violates OSHA standards the same way as using generic content as described above.
(Check out these 6 Things to Consider When Planning Toolbox Talks.)
5. Failure to Conduct Routine Inspections
OSHA has a very clear mandate that employers must conduct routine workplace inspections to identify health and safety hazards, and then immediately correct those hazards.
The EPA and state environmental laws also require routine inspections and corrective actions to manage programs such as Storm Water, Hazardous Waste, and Spill Prevention Control and Countermeasure.
Truth be told, my companies rarely conducted these inspections for a number of reasons, including not being aware of the requirements, not knowing how to identify (let alone correct) violations, and a lack of time and resources.
Many other small companies fail to meet these requirements for the same reasons.
Small companies fall prey to these issues due to a very common lack of critical internal expertise, as well as insufficient time and resources to keep up with environmental, health, and safety regulations.
This often leaves small companies in a perpetual state of non-compliance and, therefore, at risk for major liabilities including serious injuries, environmental damage, huge regulatory fines and penalties, lost money and customers, and even potential civil and criminal liabilities.
I’ve witnessed many small companies and people I’ve known during my career fall prey to just about all of these risks, including one client getting sent to jail over environmental violations and others threatened with jail time.
I’ve also been cited by OSHA and TCEQ, lost money to increased WC premiums due to injuries, and lost many business opportunities, all due to making these common mistakes and failing to manage EHS compliance.
Hopefully this article will succeed in raising awareness of these common mistakes and help small business owners make better choices when it comes to managing safety compliance.