Why should a struggling (or profitable) business owner consider implementing an occupational safety and health program? Why spend the money or the time (time is money, they say!)? Here is a list of many of the reasons a JSA job safety analysis and a resulting safe work practices can increase the bottom line:
FOR THE EMPLOYER:
- The OSHA Act puts expectations for workplace safety and health on the employer
The Occupational Safety and Health Act of 1970 (often referred to as the OSHA Act or OSH Act) requires employers to implement safe work practices by providing a workplace free from harmful recognized or potentially harmful hazards and risks.
- Safe Work Practices Lower Workers’ Compensation Insurance Costs
According to the 2011 Liberty Mutual Workplace Safety Index, the most disabling workplace injuries and illnesses amounted to more than $50 billion in direct U.S. workers' compensation costs in 2009.
Source: 2011 Liberty Mutual Workplace Safety Index [PDF* - 677 KB, 2 pages]. Liberty Mutual Insurance Company, (2011).
- Safe Work Practices Lessen the Wwages and/or Legal Damages Paid to injured workers for absences not covered by workers’ compensation
A 2012 study concluded that inspections conducted by California's Division of Occupational Safety and Health (Cal/OSHA) reduce injuries with no job loss. The study showed a 9.4% drop in injury claims and a 26% average savings on workers' compensation costs in the four years after a Cal/OSHA inspection compared to a similar set of uninspected workplaces. On average, inspected firms saved an estimated $355,000 in injury claims and compensation paid for lost work over that period. There was no evidence that these improvements came at the expense of employment, sales, credit rating, or firm survival.
Source: David Levine, Michael Toffel, and Michael Johnson, "Randomized Government Safety Inspections Reduce Worker Injuries with No Detectable Job Loss." Science, Vol. 336, No. 6083, pp. 907-911 (May 18, 2012).
- Occupational Safety and Health Programs Promote the Fiscal Health of the company
Companies that did not adequately manage workplace safety and health performed worse financially than those who did from November 2004 to October 2007. Investors could have increased their returns during this period had they accounted for workplace safety and health performance in their investment strategy.
Source: Goldman Sachs JBWere Finds Valuation Links in Workplace Safety and Health Data [PDF*- 83 KB].
Goldman Sachs JBWere Group, (2007, October).
- Return-to-Work Programs Costs are Lowered when Safe Work Practices are Followed
- Occupational Health and Safety Programs Generate Increased Productivity
Over 60 percent of chief financial officers in one survey reported that each $1 invested in injury prevention returns $2 or more. Over 40 percent of chief financial officers cited productivity as the top benefit of an effective workplace safety program.
Source: Chief Financial Officer Survey. Liberty Mutual Insurance Company, (2005).
- With Fewer Workplace Hazards, Employers Note Fewer Expenses and Less Time Lost for job accommodations for injured workers
- Safe Work Practices can Control Wage Costs due to time lost during work stoppage following an incident.
- Occupational Safety and Health Programs Encourage Improved Worker Productivity (partly because of not having to train as many new workers because of injured employees), and therefore…
- Less time paid out for overtime hours
- Less time spent by supervisors filling out forms following occupational injury and illness.
- Safe Work Practices Result in Decreased Damage to Machinery, Materials, and Property…lessening upkeep expense.
- Occupational Health and Safety Programs Generally Increase Morale of Employees
- A Commitment to Eliminating Hazards in the Workplace Results in Better Employee/Management Relationships
- Safe Work Practices Mean Reduced Employee Turnover
- Occupational Safety and Health Simply Means Better Use of Human Resources
FOR THE EMPLOYEE:
- Less risk because of Safe Work Practices means more guaranteed income
- The Occupational Safety and Health Programs means fewer claims made on personal insurance or costs paid by the uninsured
- Family life not disrupted by injury when Safe Work Practices are followed
- Less stress when workplace hazards are reduced
In short, promoting occupational safety and health is the way increase the productivity and performance of a company, whether large or small, and is the only way to prevent the negative effects and possible tragedies that come from hazards in the workplace.