Whether you’re a new environment, health and safety (EHS) manager or a seasoned veteran, budgeting can be a tricky process in managing an efficient department.
Begin the process by considering your organization’s outlook and objectives for the upcoming year, as well as your department as an independent unit. You will need to identify actions to support the trajectories of each.
Use these six steps for successful EHS budgeting.
1. Identify your organization’s goals and projections for the upcoming year
Before you begin drafting your forecast, try to understand the goals and milestones your organization plans to hit. Examples include:
- Organizational head count.
- Clinical trial goals and milestones.
- Partnerships or acquisitions.
- Venture capital contributions.
- Revenue forecast.
Not clearly understanding your company’s goals and forecast makes it very difficult to accurately develop an EHS budget that adequately supports the program.
You also should revisit your company’s mission statement and vision to review objectives around daily tasks, monthly projects and yearly goals.
2. Drill down to the departmental level
Once you understand the macro-level corporate forecast, it is time to dig down into departmental goals. It is critical that you know how each department will contribute to corporate projections. From there, you can understand how EHS will have to support each department in the coming year.
Examples:
If: Your medicinal chemistry unit is forecasted to grow by 20 percent by adding more research staff…
Then: You will want to focus on personal protective equipment, chemical hygiene and hazardous waste programs.
If: Your organization plans to hire 100 sales representatives...
Then: EHS support may be more focused on employee wellness, driver safety and environmental stewardship.
If: Business units are reduced…
Then: Ask corporate whether EHS will be asked to shut down any buildings or departments. These types of closures often require additional EH&S support.
Initiate meetings with business leaders early in the budgeting process to flush out details around planned campaigns, equipment purchases and head count. Gathering this information early will help you identify additional compliance or disposal costs as well as provide justification for your estimations.
3. Align corporate goals and values with EHS
Before you begin to create a budget, be sure to understand corporate or executive expectations for EHS.
An EHS budget is meant to support corporate processes and reduce associated risks and liabilities. As a result, the EHS activities become a function of organizational size and operations.
Depending on the values of your company, the stage of your company and the stakeholders involved, you and your colleagues in EHS may play many different roles:
- Are best-in-class EHS programs part of the corporate stake and culture?
- Or, is it your job to only maintain compliance to avoid fines or notices of violations?
This step is essential towards building a plan that aligns with your stakeholders’ standards.
Many leading biopharmaceutical companies have sustainability goals that impact EHS goals and budgets on the site level. For example, if a multi-national life science company has corporate sustainability goals such as reducing total waste generation by 30 percent, greenhouse gas (GHG) emissions by 45 percent and environmental compliance incidents by 75 percent, then site EHS groups must align their site and departmental activities with these goals, as well as establish a necessary budget.
4. Set EHS goals
Once you analyze your company’s objectives for the next year, you can layer in your personal and departmental EHS goals. In order to do so, review your company report from the previous year and develop actionable steps for improvement in the upcoming year.
Don’t rest on your laurels – acknowledge improved rates (incident, waste, recycling, air emissions, energy use, etc.), but focus on those areas that could use improvement.
Think outside the safety and compliance box; how can you implement and uphold best practices, overcome any potential obstacles with researchers, improve communication, strengthen EHS culture within your organization’s laboratories, instill accountability, clarify leadership and increase transparency?
For example, take a look at Columbia University’s environmental health and safety goals here. Some department goals are minimizing the risk of exposure to hazardous chemicals, minimizing the risk of work-related injuries and realizing these goals with a minimum burden on education and research activities. Thus, an EHS goal for the next year might be to increase PPE checks by 150%, to ensure more accountability with SOP enforcement by having regular safety meetings, to increase training for students in the lab by 10 hours or to carry out lab inspections twice a week without being intrusive to researchers in the lab. You can use the general goals of your department to develop quantifiable milestones to reach.
Once you identify your own goals, you can start to outline the type of support or resources you will need throughout the year to achieve each mission.
Resources may include additional labor or consulting support, new equipment or additional training resources. Have a conversation about these larger needs, but also develop smaller, more manageable monthly goals so that you have deliverables throughout the year and a concrete means of hitting each benchmark.
5. Keep an eye on emerging regulations and industry trends
New regulatory requirements may require additional resources such as training consultants or even an additional full-time employee. For example, many companies had to comply with the December 2013 HazCom training requirement.
Look at industry trends that may impact your EHS programs as well. As more and more pressure is placed on organizations to be good corporate citizens, your organization may want to take proactive steps to reduce environmental and public health externalities and costs produced by the company.
6. Decide whether you should hire additional resources
Now that you’ve reasoned out the necessary amount of time and effort to meet your goals and your organization’s higher level goals, it’s time to understand if the costs (not just monetary) are great enough to be able to justify a full-time employee. Consider not only salary, but also the costs of benefits and the impacts of vacation time.
- Will one full-time employee be able to provide the full range of services that you require?
- Does your EHS department need the flexibility to scale up and scale down quickly as your company may change throughout a year?
- Could your EHS vendor provide personnel who fill this on-site need without the threat of turnover or the additional needs of hiring another employee?
You strategically need to identify the best option for accomplishing your EHS goals – one that aligns with your organization’s trajectory, environmental health and safety needs and budget.
Ian Lanza is regional director of Life Sciences for Triumvirate Environmental, and can be reached at [email protected] or 617-293-4119. Alexa Kaubris is an account manager for Triumvirate Environmental and can be reached at [email protected] or 617-592-7295.