Image may be NSFW.
Clik here to view.
One of the most ignored, but important, elements of occupational health and safety (OHS) management is the business case. Work on this issue is being completed in Australia by Safe Work Australia but the European Agency for Safety and Health at Work (EU-OSHA) has beaten it to the punch by releasing “The business case for safety and health at work: Cost-benefit analyses of interventions in small and medium-sized enterprises“. This document includes new case studies that provide detailed analysis of cost and return on investment from interventions as varied as a vacuum lifter for pavers to warm-up exercises and task assessments of domestic builders by qualified physiotherapists.
The report found that:
- “Wide-ranging interventions appear to be more profitable than interventions targeting a particular
issue related to the sector of the enterprise.- Interventions that mainly concern training and organisational change appear to be more profitable than interventions based on technical changes (such as introducing new equipment).
- Interventions that include direct worker (participatory) involvement appear to be more profitable, regardless of whether or not increased productivity benefits are taken into account in the
economic evaluation.- In most cases, the enterprises managed to estimate benefits related to increased productivity. It
should be emphasised that increased productivity does not always come as a result of improved
safety and health, but it is taken into account in the context of a business case.” (page 10)
These findings can be supportive and threatening to established OHS approaches. For instance, wide-ranging interventions can be more profitable, perhaps like the elimination of risk through job redesign, but actions that are of a lower order in the Hierarchy of Controls, such as training, can be more profitable than the introduction of new equipment. Direct worker participation supports the process of consultation drawing on worker experience and knowledge. But it also shows that an executive summary should not be relied upon when determining these economic and OHS factors.
The report seems to recommend that to be successful advocates for safety improvement OHS professionals, and others, must understand an organisation’s business strategy.
“When presenting convincing arguments for investments in OSH in a business case, there is a need to make the link between OSH and the company’s business strategy and bottom line. This link with the business’s core activities is essential to obtain commitment and to integrate OSH into business processes.” (page 18)
It also states that
“Cost is rarely the motive for OSH intervention; reputation and compliance with the law appear to be more influential”. (page 19)
These realities might be “known” by OHS professionals but this report provides proof to that experience.
A research report from 2001 (Smallman and John) based on British companies and quoted in the report
“found no companies that calculated ROI for OSH spending, as spending for OSH was not assessed in monetary terms, at least not in board-level reports or thinking.” (page 18)
A 2006 study by Antonelli et al. in this report found “the most important reasons why SMEs invest in OSH are:
- understanding that health and safety is an integral part of being a ‘good business’;
- maintaining their reputation;
- achieving higher productivity — especially by reducing absence;
- keeping within the law, hence avoiding punitive action from government bodies;
- avoiding the expense of accidents;
- containing insurance costs;
- meeting client demands; and
- being a ‘good’ employer.” (page 20)
The appeal of this document and many EU-OSHA publication is the inclusion of detailed information on the safety interventions. Each of the case studies includes a short description, images, cost figures and monetary benefits. There is a wide variety of work tasks covered but with some substantial innovations, at least substantial to the Australian circumstance.
One case study of particular note involved the prevention of back problems in small floor laying company in Germany. There was an assessment of the way work was conducted as well as providing trunk-strengthening exercises via a qualified sports instructor. (Similar programs have been trialled in Australia but not with an assessment of economic benefits.) This resulted in a benefit-cost ratio of 1.80 with a payback period of 2.16 years. The achievements listed include:
“The training enabled the workers to significantly strengthen their trunk muscles. At the same time, the new design of the work processes helped them to put less strain on their backs. Thus, the workers unanimously confirmed in a final survey that they had back pain less and less frequently.
This matches the result reported by the health insurance association, which certified in its final report that there had been no cases of work incapacity during the two years of the project (2005 and 2006), and therefore also no absence as a result of back problems.
Five years later (in 2011), it was found that during these five years only one case of spinal disorder (dorsopathy) had occurred, resulting in two days’ absence from work.
In 2013, the head of the company, Mr Brandenburg, was able to confirm that the senior skilled workers remained in their jobs with the company until they turned 65.” (page 84)
The vacuum lifter of pavers was also intriguing.
Perhaps the biggest achievement of the report and the program it depicts is the establishment of a “common cost model (with common assumptions and accounting principles)”. The report states that
“this was helpful for enterprises, which had remarkable success in identifying and estimating economic costs and benefits related either to absenteeism or to improved productivity, which were the two main cost categories (although they did not manage to quantify all the relevant costs and benefits)” (page 10)
(It also has a terrific bibliography)
OHS professionals are in desperate need for solid economic evidence of the benefits of safety intervention for many reasons, one of which is to dispel the unfair perception that OHS professionals are pedants and fun vampires but, more importantly, to argue that safety is not simply a moral obligation but a profit generator.
Image may be NSFW.
Clik here to view.
Image may be NSFW.Clik here to view.
