How Does Your EHS Budget & Staffing Stack Up?

In the face of the coronavirus crisis, EHS professionals are working tirelessly to make sure there is enough PPE available, establish social distancing or work-from-home arrangements, and plan for how the company can continue to operate during COVID-19 and beyond.

Now more than ever, EHS is vital to maintaining operations and keeping people safe — but they can't do that if they're spread too thin or underfunded. It’s worth evaluating whether your organization’s EHS department has the resources it needs to ensure safety and compliance.

Today’s insights are inspired by NAEM’s 2020 EHS Staffing, Structure, and Budget executive report, which looked at 150 companies in more than a dozen industry sectors.

Below are three observations on the role of EHS professionals today and the factors that influence budgets and staffing.

EHS plays a broad, cross-functional role in business operations

This one comes as no surprise to anyone working in the field. EHS professionals are being tasked with more responsibilities than ever, including workplace safety, compliance, environmental management, sustainability, and operational risk management.

The role of EHS has become increasingly collaborative, too. EHS managers are working side-by-side with other business teams, including procurement, product development, and facility management, to name a few.

While that means you probably have more on your plate than ever before, it also means that you’re seen as more central to business operations and, as a result, more likely to report to C-level executives.

Companies in high-risk industries have higher EHS staffing & bigger budgets

More than revenue or total headcount, operational risk seems to be the most important factor in determining staffing for EHS. Companies in high-risk industries have higher staffing benchmarks compared to those in lower-risk sectors. The level of risk also correlates with higher EHS budgets. The survey showed that as a company’s exposure to risks increases, so does its spending on EHS.

It makes sense: high-risk industries, because of the potential for accidents and injuries, tend to require a greater level of oversight. A chemical manufacturer, for example, will rely more heavily on safety and environmental professionals than a clothing retailer, regardless of revenue or headcount.

This is an important reminder that organizations shouldn't use an economic downturn or layoffs as an excuse to slash EHS personnel. This can lead to critical staffing shortages and have serious consequences for safety and compliance.

Smaller companies spend more per employee on EHS

The survey also found that companies with lower annual revenues tend to budget more per employee on EHS. In fact, companies with revenues between $250M and $1B spent nearly seven times as much as companies with revenues greater than $50B.

If you're a small- to mid-size company, that means you need to get comfortable with allocating a larger portion of your resources toward EHS. Investing heavily in safety and compliance now will give your business the foundation it needs to grow year-over-year. As your company expands, you'll need to keep investing in EHS — but because you’ll benefit from economies of scale, you'll actually end up spending less over time.

That said, there are opportunities for smaller companies to create economies of scale by harnessing technology and automation. For example, teams can use EHS software to streamline EHS tasks like data entry and reporting and operate like a department twice their size.

Is your EHS department adequately staffed & funded?

COVID-19 has shone a spotlight on EHS, but the importance of making sure this department is adequately equipped goes far beyond this crisis.

You can see from the results of this survey that there’s no one-size-fits-all solution to how big your staff and budget should be. There are a lot of factors that go into that calculation — including your industry, annual revenue, and total headcount — so you’ll have to think carefully about what it will take to ensure your organization’s continued success.

A free executive report is available here, or you can download the full report for $1,700.

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