Fleet News

Risk management: Four steps to improved fleet safety

Fleet managers who are not giving serious thought to the safety of their drivers have probably been living in a cave for the past five years.

Most now regard it as a key element of their job. Unfortunately, their bosses might be less focused. And more often than not, the fleet manager doesn’t hold the purse-strings and can’t just start splashing cash on driver training and risk assessments. The people who do need to be convinced are the MD and the members of the board.

So fleet managers with a plan to reduce accidents often face an uphill battle to convince their superiors of the need for action.

Dr Will Murray, a research director for Interactive Driving Systems, gives seminars, in association with road safety charity Brake, on how to present the case for fleet safety.

“It’s not always a short, easy process,” he warns.

“Some of the companies I’ve worked with have taken two years to put the case together and get it approved.

“You need to know what presses the buttons of the people you’re talking to. If it’s accountants, then it’s cost. If it’s a manager, it would be something else. If your insurance premiums are up for renewal, then it’s not a bad idea to focus on the insurance benefits – in my experience, insurers will sometimes give you risk management support to help with a programme.”

Building up a persuasive business case takes time and requires a variety of approaches.

1. THE COST ARGUMENT Money is perhaps the most effective way to get a point across to the board – safety equals fewer bills.

The implications of an accident can be huge, far beyond the costs of the bent metal. One has to add in vehicle downtime, personal injury cost, the cost of replacing the vehicle while it’s being repaired and so on. HSE data suggests that the hidden costs amount to between eight and 36 times’ the direct accident costs.

Dr Murray recommends fleet managers tread conservatively. “We usually downplay that because people don’t believe it,” he says. “But even twice as high gets you a massive financial argument.”

2. THE SOCIETY ARGUMENT

Perhaps some board members are not money-hungry dragons and do care for wider society.

It might be worth pointing out that 3,200 people died on the roads in 2005, and between 25% and 30% of those accidents involved people driving for work. This means there are four times more work-related road fatalities than non-vehicle-related work fatalities in the UK.

Research by the Transport Research Laboratory suggests that company car drivers have about 50% more vehicle collisions than ordinary drivers, even taking into account their higher mileage.

And insurance data shows that between 20% and 60% of company cars are involved in a vehicle collision each year.

If the board wants to protect its staff from harm, shouldn’t it take action?

3. THE BUSINESS ARGUMENT

Safety isn’t just about safety. There are links between safety and quality, customer service, efficiency and the environment.

A safer fleet often means a fleet that is more fuel-efficient, as well as reduced damage and vehicle downtime.

Work-related safety cannot be isolated from the overall business and it isn’t a mere hindrance. It can offer marketing and business development opportunities – think of the brand enhancement opportunities of, for example, winning fleet safety awards. And by getting ahead of legal requirements, firms can get ahead of competitors.

An accident very often means staff absence due to their injuries. Think of the cost of this absence, the cost of getting someone in to replace them and the potential lost business as colleagues attempt to bring themselves up to speed on someone else’s workload. Think too of the effect on morale of those left to pick up the pieces while a colleague is injured.

4. THE LEGAL ARGUMENT

Fleet managers will be well versed on the multitude of legal requirements companies face.

The Health and Safety Executive/Department for Transport guidance on work-related road safety should be seen as the minimum benchmark standard.

Bombarding the board with the acts with which they need to comply may scare them, but will get across the point that something needs to be done. Do they comply with the Road Traffic Act (1998), the Road Safety Act (2006), the Highway Code, the Association of Chief Police Officers Road Death Investigation Manual, the Health and Safety and Work Act (1974) and the Managing Health and Safety and Work Regulations (1999)?

That’s just a selection and doesn’t touch on the Corporate Manslaughter Bill. If this graduates to a full act, it will allow businesses as a whole to be found guilty should someone die as a result of their failure to take reasonable care of employees or other road users.

And that could result in massive fines and a substantial amount of bad publicity.

Case study: Wolseley

Paul Gallemore, the head of health, safety and environment at plumbing firm Wolseley, believes there are three main issues to which the board will respond.

“There’s the legal argument which a lot of people don’t care about,” he says. “Secondly, if they don’t care about fleet safety then they don’t care about people getting killed. Tell the board that and watch them look uncomfortable. Lastly, there’s the cost factor. You can guarantee that a lot of directors never ask how much health and safety or accidents cost them, so they don’t care.”

Gallemore got his funding but it took more than just strong words – he backed them up with a strong business case.

Wolseley has more than 2,000 branches across the UK. With a large infrastructure comes a large fleet – more than 5,000 cars and trucks.

Mr Gallemore says: “When I arrived our insurers, Zurich, had just completed an audit and we did very poorly. I set up a fleet safety steering group involving fleet managers within the business as well as experts from outside the business – our insurer, insurance broker, car providers and so on.”

Gallemore and health and safety co-ordinator Harnam Singh Nijjar organised driving assessments for everyone driving on business and put together handbooks for company car and commercial vehicle drivers.

They ensured that each edition of the corporate magazine had a safety-related article and launched a road safety newsletter.

The most powerful tool, however, has been the safety alert – a circular sent to all staff in the aftermath of an accident, usually including pictures of the damaged vehicle.

Such measures, implemented through all departments, have begun to see safety become ingrained in the culture of Wolseley.

Case study: Centrica

In 2005, fleet manager for Centrica, the firm behind British Gas, Jon York put together a business case for a dramatic increase in fleet safety activity.

He began with an executive summary, setting out his case over a single page of A4 before going into greater detail.

In 2005, British Gas had around 4,000 vehicle-related incidents, which cost £3 million in repairs and £2 million in third-party costs. There was also £1.5 million in personal injury costs. The hidden costs were estimated to be around £11 million.

As well as the figures and the details of what he wanted to do – such as driver training and increased risk assessments – Mr York also highlighted the positive steps the firm was already taking, such as fuel monitoring and licence checks.

He included a return-on-investment model to show how the £600,000 he was requesting would be used. He predicted that in the first year the savings would be 5%, equating to £370,000 in direct costs and £550,000 in hidden costs, covering the investment within 12 months.

The case proved successful and the board agreed the cash. By 2006 Mr York had seen an 8% reduction in accident costs.

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