Protecting peopleHealth and safety as aperformanceimperative

Helping youprotect yourorganisation’smost valuableassets

2015

Contents

1

Safety: At the heart of it 2

Strategy through to execution 3

How we can help 4

Thought leadership 10

Talk to us 11

PwC

PwC

Behind every incident is a person

While Australian workplaces have demonstrated a steadyimprovement in safety outcomes, over 180 workerfatalities still occurred in 2013. Behind the numbers andstatistics is a person whose friends, family and co-workerswill never be the same. As anyone who has been involvedin a workplace injury or fatality can attest to, theemotional impact on all of those involved lasts wellbeyond any investigations that result.

The devastating stories behind workplace injuries,illnesses and fatalities has catalysed action in manyleading organisations. The last decade has seenconsiderable innovation in approaches to themanagement of health and safety risk in many industrieswhile at the same time Governments have continued touse their powers to reinforce the duty of care thatorganisations have to operating safely.

We help clients protect their people and optimisethe return on the health and safety investment.

While many businesses have focused heavily on improvingsafety outcomes, the approaches that have achievedsuccess in the past may not be fit for purpose in thefuture. In some cases, companies have also realised thatin their desire to comply with regulatory requirementsthey ‘can’t see the forest for the trees’ and are buried inprocess that doesn’t necessarily enhance safety outcomes.

Improving health and safety performance and unlockingefficiencies requires a unique blend of skills andexperience. Our multi-disciplinary team draws on ourcapabilities in strategy, leadership and culture, risk,technology and management consulting to help ourclients achieve better health and safety outcomes. Thishelps our clients:

• protect their license to operate;

• optimise their ROI in health and safety;

• comply with their regulatory obligations; and

• most importantly, protect the people that theywork with.

2

Health and safety: At the heart of it

The total economic cost ofAustralian workplaceinjuries for the 2008–09 yearis estimated to be $60.6billion, representing 4.8 percent of GDP.

THE COST OF WORK-RELATED INJURYAND ILLNESS FOR AUSTRALIAN

EMPLOYERS, WORKERS AND THECOMMUNITY: 2008-09

Safework Australia 2012

Companies today are facing a range ofopportunities and challenges

• Regulatory change (WHS Act)

• Cost of claims and insurance

• Proliferation of mobile devices and data

• Consumer pressure / licence to operate

• Behavioural change and leadership

• Bureaucracy and simplicity

• Duty of care

• Employee wellness and mental health

• Reliance on third parties / contracting

PwC

Strategy through to executionWe help our clients improve workplace healthand safety outcomes in the following ways

3

Safetyconsulting

services

Aligning culture to safety outcomes

We work with executive teams to identify andresolve cultural barriers to improving safetyoutcomes.

Services Capabilities

Harnessing technology and data toidentify and target risk drivers

Drawing on our actuarial and data sciencecapabilities we interrogate disparate datasources to identify and target risk drivers.

Transforming safety functions to delivergreater value

Through benchmarking, voice of customeranalysis and other techniques we help safetyfunctions identify opportunities to realise greaterbenefits for their businesses.

Providing advice to Directors and Officers

We provide an independent perspective to officeholders on the mechanisms in place to ensure thatthey meet their duty of care.

Workplace productivity

We help our clients identify step-changeopportunities to improve both health & safetyand business outcomes.

Responding rapidly to significantincidents

We help our clients navigate the days followinga significant incident and defining the short,medium and long-term actions required.

PwC

How we can helpAligning culture to safety outcomes

4

Having the right safety culture is critical in driving safety performance.

We have a team of specialists focused on assisting clients with embeddingtheir desired safety culture into working practices.

We can help you to:

• Clearly articulate, communicate and obtain buy-in for the future statein the context of organisational priorities.

• Identify root causes for poor safety practices and the “gap” that mayexist between vision and policies, and how they play out in practice. Indoing this, we conduct a diagnostic to understand:

• Leadership and strategy

• People and communication

• Accountability and reinforcement

• Risk management and infrastructure

In doing this, we look at the level of organisational maturity inunderlying beliefs, skills and environment.

• Articulate both the desired and ‘derailing’ safety behaviours and embedthe desired behaviours into day to day working practices and HRframeworks (eg. performance management framework, incentive plandesigns, promotion criteria, talent selection criteria, etc.).

• Incorporate relevant leading and lagging safety KPIs into businessdashboards.

• Align your desired safety culture across both your employees and yourcontractors.

• Determine how to most appropriately embed safe working practices indifferent jurisdictions, including developing countries.

• Make change relevant and personal to those involved to sustain thechange.

Iconic Australian FirmBridging the gap betweenthe current and desiredsafety culture

We worked with this company tohelp them assess and improve theirsafety culture going forward.

Our project was divided into3 phases – (i) identify the desiredfuture state, (ii) assess the currentstate, and (iii) develop a cultureroadmap to implement.

As part of our review we developed aframework to identify and measurean effective safety culture. Followingour review, the organisation had aclear understanding of the gapbetween the current and desiredfuture state.

A cultural change road map,including tangible actions, wasdeveloped for the organisation topilot and test an implementationplan. To ensure success, it wascritical the safety culture wasembedded, and seen as part of, theoverall organisational culture.

PwC

How we can helpTransforming safety functions

5

Driving and sustaining optimum safety culture within an organisationrequires an effective safety function underpinning the change; onethat is risk-based and fit-for-purpose.

Aligning the safety capabilities throughout an organisation in a waythat maximises their impact and is aligned to the broader businessoperating model is a challenge for many organisations.

As many organisations increase the frequency and scale of change tostay competitive, safety functions also need to ensure that they adapttheir operating models to keep up with this change.

We can help you to:

• Benchmark your safety function against global peers through ourproprietary Saratoga global dataset.

• Undertake Voice of the Customer (VoC) analysis to understand thepositioning of the safety capabilities throughout the organisation.

• Evaluate the operating model of safety functions and support thedevelopment and implementation of transformation roadmaps.

Australian and NewZealand industrialproducts company

We worked with a leading industrialproducts company to help themdevelop a roadmap to transform theoperating model of their corporateand business unit safety functions.

Through a combination of focusgroups, interviews and independentbenchmarking we identified a rangeof recommendations that would notonly strengthen the impact of thesafety function but would also yieldmillions of dollars of savings for thebusiness.

PwC

How we can helpGovernance and assurance

6

With the arrival of the requirement for demonstration of positive duediligence by ‘Officers’ of organisations, there has never been a greateronus on making sure that your safety processes are not only well designed,but are being adopted and working effectively. This has been an areawhere we have demonstrated value by applying our health and safety andrisk and control understanding to our client’s problems in areas such ascontractor management, efficacy and reliability of safety performanceinformation, training, incident management and design of due diligenceframeworks and organisational safety strategy.

Safety performance data should provide a valuable insight in relation tothe effectiveness of your strategy and processes. Safety performance alsoincreasingly forms the basis of reward structures and offers investmentanalysts and stakeholders an insight into the effectiveness of your riskmanagement processes. So clearly confidence in your safety data is king.

We can help you to:

• Identify and prioritize opportunities to enhance your governance andassurance processes so you can better understand whether yourapproach is resulting in the desired outcomes.

• Check the integrity of your safety performance data and the processesfor generating it.

• Map your processes so you can understand how well your currentapproach is supporting you to discharge your due diligence obligations.

• Support you to design and execute your safety assurance frameworkto ensure it is aligned with risk.

• Develop executive reporting packs so you are provided with theinformation you need to not only assessing the effectiveness of yourprocesses, but also where to deploy your resources.

So whether its checking the effectiveness of your processes or the integrityof your data, we have the experience and skills to assist you.

Global Mining Company– Work Health andSafety (WHS)

The Executive team of one of theAustralian mine assets wanted tounderstand potential exposures thatthe harmonisation of the WorkHealth and Safety laws on may haveon their rail and Port infrastructure.

We assisted management to identifykey areas of exposure and howexisting procedures, processes andcontracting models could beenhanced to reduce potentialliability. This included developmentof a high-level implementation planto address our recommendations.

PwC

How we can helpUsing Safety Risk Predictive Analytics to improvesafety performance

7

There is a wealth of information that is captured in historical worksite,project, human resource, inspection reports and environmental data.

Traditional analysis focuses on what has already occurred - predictivemodelling techniques used in Safety Risk Predictive Analytics can helpidentify high risk predictors of incidents before incidents occur, allowingcompanies to put strategies in place that focus on prevention.

We can help you to:

• Identify risk predictors and lead indicators of safety issues. Ourassessment of risk begins by identifying the independent, quantitativerisk predictors. Examples of predictors are project site, project size,team size, weather condition and project phase.

• Use the insights from the risk predictors and lead indicators to identifytargeted areas or employee populations for wellness programs anddedicate appropriate safety resources to high-risk areas.

• Implement the strategies to improve safety practices based on insightsgained from the analysis, such as increasing safety training andmeasures for high risk areas or targeting areas for wellness or safetyawareness programs.

Implementation of Safety Risk Predictive Analytics can help improve safetyand loss prevention programs, which in turn, can reduce costs and improvethe sustainability of the organisation through enhanced employeesatisfaction and employer corporate responsibility.

Safety Risk Predictive Analytics is part of PwC’s broader Governance, Riskand Compliance (GRC) framework, which starts with the risk strategy andcovers governance, organisation and policies and change management.

Large Australian energycompany

A large Australian energy company’smanagement needed assistance inunderstanding the implications ofimplementing a new fatiguemanagement policy. This was drivenby recent fatigue related incidents inthe workplace.

PwC was able to show that longerperiods of work and work performedduring the night time are linkedwith increased levels of fatigue andincidents and that the organisationwas operating with significant,sustained levels of OT.

We presented three options forreducing OT hours, and providedour client with an implementationroadmap that could provide itsemployees with a safer workplace inregard to fatigue management whilebeing cost neutral.

PwC

How we can helpIncident investigation and response

8

Investigations are complex, costly and from our experience oftenineffective at identifying and treating the ‘root cause’ of the issue. Some ofthe key reasons for this include:

• Not having the right mix of skills or level of independence within theinvestigation team. Everyone comes at a ‘problem’ with their own bias;therefore having a multi-disciplinary team who are independent of thearea being investigated is critical.

• The recommendations generated often only address the symptomsrather than the issue; fail to account the ‘change’ related considerationsand governance processes to monitor progress are ineffective.

• The data from incident investigations is not effectively used to informareas of concern and potential future programmes and interventions.

The result? A reoccurrence of the incident, people hurt, productivityimplications and the potential for regulatory action.

We can help you to:

Investigate

• Rapidly mobilise a team of independent multidisciplinary teams toestablish the ‘facts’ without the fixed costs.

• Take a holistic approach to the generation of recommendationsincluding consideration of the ‘change’, ‘complementary assets’ andgovernance mechanisms required.

Challenge

• Identify areas requiring future focus and additional resourcing but alsochallenge the ‘return on investment’ of existing interventions andprogrammes.

• Utilise our Safety Risk Predictive Analytics capability as a predictivetool of incident causation, as discussed in the previous slide.

So if you want to derive value from the investment made in relation to yourincident investigations we have the people and tools to assist.

Leading communicationscompany

Following a serious incident to oneof its contractors safety regulatorsrequired this client to identify theroot causes of the incident andimplement a plan to address theweaknesses identified.

We worked with the client over a 12month period of time to help theclient transform its approach to themanagement of contractor safetyrisk including redesigning aspectsrelating to its:• Governance approach• Roles and responsibilities• Safety management system and• Behaviours

PwC

How we can helpWorkplace productivity

9

Best practice employers have a holistic approach to managing safety,productivity, injury prevention and workers’ compensation return to workprograms. Understanding the key drivers of your company’s workplaceproductivity can provide actionable insights towards improvingperformance. Better performing employers have higher employeeengagement, higher productivity and lower absenteeism and lowerworkers’ compensation insurance costs.

We can help you to:

• Identify the major drivers of lost productivity through absenteeism bylinking employee demographics with safety incidents, sick leave, andworkers’ compensation claims, to better isolate the human and socialdrivers of workplace absenteeism

• Use the insights from an understanding of the drivers of poorabsenteeism experience to develop strategies that increase workplaceengagement

• Develop monitoring systems around key items, such as sick leave,safety incidents, and workers’ compensation risks, aiming at identifyingreliable predictors early, thereby providing the opportunity forcontinual improvement

• Understand the whole of industry trends, and their relevance to yourcompany, using our knowledge and experience gained from our longstanding relationship with most of Australia’s largest workers’compensation schemes

We have seen that integrating prevention strategies and return to workprograms into workplace culture and employee engagement programs hasthe potential to release significant amounts of cash to the business.

Improving return towork outcomes

There are wide ranging andchallenging barriers in returningclaimants to work. Using ourknowledge of the drivers of theclaims process, we developed a pilotprogram with our behaviouraleconomics team, streaming casemanagement to better match theclaimant’s needs.

The trial demonstrated thatappropriate cues from the linemanager and the case manager canpositively impact the outcome,reducing the cost of long termclaims.

PwC

Thought leadership

10

These ‘10 minutes on...’ cover our points of view on the key services we can provide.

10 minutes on... Using dataanalytics to improve safetyperformance

July 2014

There is a wealth of information that iscaptured in historical worksite,project, human resource, inspectionreports and environmental data.

Traditional analysis focuses on whathas already occurred - predictivemodelling techniques used in SafetyRisk Predictive Analytics can helpidentify high risk predictors ofincidents before incidents occur,allowing companies to put strategiesin place that focus on prevention.

10 minutes on... Self-insuringworkers’ compensation underComcare

February 2014

In December 2013, the FederalGovernment reopened the Comcarescheme to companies wanting to self-insure. Lifting the moratorium opensthe scheme to eligible, multi-stateemployers to allow them nationalworkers compensation coverage. Thereport outlines the financial and non-financial considerations of theComcare self-insurance approach.

10 minuteson….Self-insuring workers’compensation under Comcare

February 2014

What you need to knowabout emerging topicsessential to your business.

Brought to you by PwC

Creating a mentally healthyworkplace - Return oninvestment analysis

March 2014

This report outlines the technicalbackground to the return oninvestment (ROI) analysis forcreating a mentally healthyworkplace. The aim is to estimatethe ROI for employers investing ina mentally healthy workplace. Theanalysis estimates the cost toemployers of mental healthconditions and implementingworkplace mental health actions.

Safety and EnvironmentalManagement in the Oil andGas Industry: A New Model toEnable Line Performance

September 2013

Thanks to more rigorousguidelines, an increasing emphasison personal and process safetyprograms, and better riskmanagement practices, S&Eperformance is far better now thanit used to be. Yet the ultimate goal—“zero harm” levels ofperformance—has remained out ofreach in most sectors, as S&Eperformance has plateaued inrecent years.

PwC

Talk to us

11

To have a deeper discussion about these issues, please contact:

Sydney

John Tomac

Partner

Ph: (02) 8266 1330

Email: john.tomac@au.pwc.com

Andrew Smith

Partner

Ph: (02) 8266 4928

Email: andrew.smith@au.pwc.com

Ian Lilley

Senior Manager

Ph: (02) 8266 1498

Email: ian.lilley@au.pwc.com

Melbourne

Nick Chipman

Partner

Ph: (03) 8603 6215

Email: nick.chipman@au.pwc.com

Matt Kuperholz

Partner

Ph: (03) 8603 1274

Email: matt.kuperholz@au.pwc.com

www.pwc.com.au

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should notact upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express orimplied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law,PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for anyconsequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decisionbased on it.

© 2015 PricewaterhouseCoopers LLP. All rights reserved. In this document, "PwC" refers to PricewaterhouseCoopers LLP (a limited liabilitypartnership in the United Kingdom), which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is aseparate legal entity.

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