By implementing an automated process, retailers can easily identify patterns and trends of incidents, enabling managers to isolate areas of weakness and put preventative measures in place to reduce the risk. By sharing this data with other retailers in the vicinity other businesses can also be informed and protect themselves so they too minimise the risk.
Safety conscious? Business-savvy, more like<br>Like it or not, health and safety has got this country in a vice-like grip, but this can be a good thing, forcing businesses to drive down their risks and, in so doing, their exposure to big compensation claims and hefty fines, says Richard Paterson, Business Development Manager at Hicom.<br> <br>In a climate where cost containment is the best means of boosting profit margins, and brand reputation is a retailer’s best shot at keeping customers loyal (outside of price), it is staggering that so many high-street businesses remain so laissez-faire about managing risk. <br> <br>This is particularly true in the case of crime and fraud, which have risen substantially during the recession. Well-documented incidents range from the opportunist claiming to slip on a grape in a supermarket car park, then claiming damages, to scams involving restaurants. Here, there have been a number of cases of ‘customers’ recounting fictitious incidents where they encountered something ominous in their lunch that later made them ill. More often than not, the customers are bogus and could not have been on the premises on that particular date or time, as a series of other claims across similar businesses would prove, if only they had knowledge of each other’s experiences.<br> <br>In today’s health and safety, litigation-happy culture, businesses that fail to keep a tight rein on such risks are leaving themselves wide open to potentially costly and high-profile problems. In addition to the more sinister episodes motivated by recession-related desperation, there are everyday mishaps which need to be minimised, from lift and escalator faults or accidents due to slips, trips and falls. <br>Fire damage<br> <br>Only the other week, fashion store chain New Look was fined £400,000 plus £136,052 in costs after two breaches of fire safety legislation, following a serious fire at its premises on Oxford Street. Among the findings were an inadequate fire risk assessment, the lack of an interface between the card-swiping system and the fire alarm panel; and the discovery that the emergency door release mechanism had been fitted on the wrong side of the basement doors. All of these could have been avoided, with the right supporting policies.<br> <br>The fact that such issues were uncovered at such a prominent branch of New Look will have raised concerns that similar deficiencies could be present at other stores. As well as potentially harming the retailer’s brand, this could have an impact on future insurance premiums.<br> <br>Indeed, while no business wants the bad publicity associated with a major incident, falling foul of health and safety regulations, or insurance terms and conditions, could have more serious and costly implications.<br>The long arm of the law<br> <br>Whether for good or for bad, legislation has forced such issues up the business agenda, which should now lead to improvements. Under the landmark Corporate Manslaughter Act, which took affect in April 2008, for example, organisations can now be found guilty of Corporate Manslaughter as a result of serious management failures which result in a gross breach of duty of care. Failure to comply can result in considerable penalties or fines as high as 10% of a company’s annual turnover.<br> <br>The positive impact of all of this is that risk management and prevention is now being given more Board time, and more resource, affording stakeholders more chance of being able to do their jobs properly, ultimately reducing incidents and keeping ensuing costs down.<br> <br>Yet, successful risk management and containment relies on having a robust strategy, coupled with strong yet simple processes for capturing, analysing and acting swiftly on solid, reliable data. This, more often than not, is where businesses fall down. <br> <br>All too often, processes for monitoring and measuring potential risks are inadequate, being too slow, too manual and too complex, preventing effective decision-making and timely, pre-emptive action. Incidents, or potential incidents, are not captured or, if they are, it is in a paper-based log book, with no guarantees that the right level of detail will be recorded, or that this will be transferred efficiently to HQ.<br> <br>Effective risk mitigation demands more dynamic, automated and natural processes, where information is captured in real time, using prompts to gain the detail needed. Once a system can be used intuitively by ordinary staff, it no longer needs to tie up the precious time of store managers who are needed on the shop floor.<br>Trend-spotting<br> <br>Once key data is being recorded easily and accurately by staff on the premises, and dynamically fed back to head office, patterns and trends can be spotted quickly enabling managers to identify and isolate areas of process weakness and put preventative measures in place to minimise risk. These findings can then be passed onto other branches, so that they too can be on their guard. Where appropriate, the business may want to share the knowledge with other companies in the same group, or potentially even with peer retailers in the same geographical area, to ensure that they do not fall victim to the latest scam.<br> <br>Some retail organisations already share a wealth of data, including crime statistics and information on persistent shoplifters and thieves. By sharing data on health and safety incidents retailers and restaurant owners can also protect themselves from fraudulent claims and buck the compensation trend. The so-called ‘career criminal’ relies on anonymity to continue his or her illegal trade, so when notified that all fraudulent claims will be recorded on a database which is shared by X number of companies, many offenders will quickly reassess the situation and steer clear of these establishments. <br> <br>Prevention will always be better than cure. Whether the issues being managed are to appease regulators, or to protect the business from theft or fraud, a solid, consistent strategy is vital. Resignedly paying out compensation or fines is no way to run a reputable business. By contrast, those with tight processes will be rewarded – with a boost to their brand, lower insurance premiums, and lower operational costs in the long term.
