OSHA Makes Business Case for Employee Health and Safety

We talk a lot about employee safety, particularly within the confines of forklifts. But OSHA has compiled plenty of information that demonstrates it is more profitable in the long-run for companies to invest in health, wellness and safety programs for their employees. Just like forklift operator safety training, investing in other aspects of your employee’s job safety and overall health, your company reaps the rewards of less sick time, improved performance and productivity, and yes, profits. Following is OSHA’s business case:

Employers that invest in workplace safety and health can expect to reduce fatalities, injuries, and illnesses. This will result in cost savings in a variety of areas, such as lowering workers’ compensation costs and medical expenses, avoiding OSHA penalties, and reducing costs to train replacement employees and conduct accident investigations. In addition, employers often find that changes made to improve workplace safety and health can result in significant improvements to their organization’s productivity and financial performance.

The following resources provide background on the economic benefits of workplace safety and health and how safety managers and others may demonstrate the value of safety and health to management.

Management Views on Investment in Workplace Safety and Health
  • Y.H. Huang, T.B. Leamon, et al. “Corporate Financial Decision-Makers’ Perceptions of Workplace Safety.” Accident Analysis and Prevention, Vol. 39, No. 4, pp. 767-775 (2007). This study reviewed how senior financial executives perceived workplace safety issues. The executives believed that money spent improving workplace safety would have significant returns. The perceived top benefits of effective workplace safety and health programs were increased productivity, reduced cost, retention, and increased satisfaction among employees.
Return on Investment in Workplace Safety and Health
  • Building a Safety Culture: Improving Safety and Health Management in the Construction Industry. Dodge Data and Analytics, CPWR, and United Rentals, (2016). Includes a section on the impact of safety practices and programs on business factors, such as budget, schedule, return on investment, and injury rates.
  • Business of Safety Committee. American Society of Safety Engineers (ASSE). This committee gathers data, prepares documents, and is a source of professional information on ASSE’s efforts to show that investment in safety, health, and the environment is a sound business strategy. This page includes links to a variety of resources on the return on safety investment.
  • The ROI of EHS: Practical Strategies to Demonstrate the Business Value of Environmental, Health, and Safety Functions (PDF). Business and Labor Reports, (2006). Reviews strategies to help EHS professionals demonstrate the value of their programs to executive management.
  • White Paper on Return on Safety Investment. American Society of Safety Engineers (ASSE), (June 2002). Concludes that there is a direct, positive correlation between investment in safety, health, and the environment and its subsequent return on investment.
  • Return on Investment. American Society of Safety Engineers (ASSE). Provides information on the return on investment in workplace safety and health.
  • Demonstrating the Business Value of Industrial Hygiene (PDF). American Industrial Hygiene Association (AIHA), (May 2008). Provides guidance on how industrial hygienists can show that they provide organizations with competitive business advantages.
  • Construction Solutions Return on Investment Calculator. CPWR – The Center for Construction Research and Training. Helps evaluate the financial impact of new equipment, materials, or work practices introduced to improve safety.
  • Safety Grant Best Practices. Ohio Bureau of Workers’ Compensation Safety Grants Intervention Program. Case studies on the effectiveness of investment in safety equipment, including reduced incident rates and return on investment information.
  • Anthony Veltri, Mark Pagell, Michael Behm, and Ajay Das. “A Data-Based Evaluation of the Relationship Between Occupational Safety and Operating Performance” (PDF) Journal of SH&E Research Vol.4, No. 1 (Spring 2007). Results of study of 19 manufacturing firms supports theory that good safety performance is related to good operating performance.
  • R. Fabius, RD Thayer, DL Konicki, et al, “The link between workforce health and safety and the health of the bottom line: tracking market performance of companies that nurture a “culture of health.” Journal of Occupational and Environmental Medicine, Vol. 55, No. 9 (2013), pp. 993-1000. Companies that build a culture of health by focusing on the well-being and safety of their workforce may yield greater value for their investors. See Abstract and Press Release.
Tools for Calculating Economic Benefits of Workplace Safety and Health
    • $afety Pays. OSHA. Interactive software that assists employers in assessing the impact of occupational injuries and illnesses on their profitability. It uses a company’s profit margin, the average costs of an injury or illness, and an indirect cost multiplier to project the amount of sales a company would need to generate to cover those costs.
    • Safety Pays in Mining. National Institute for Occupational Safety and Health (NIOSH). Estimates the total costs of workplace injuries to a company in the mining industry and the impact of profitability.

Journal Articles

Michael Behm, Anthony Veltri, and Ilene Kleinsorge. “The Cost of Safety: Cost analysis model helps build business case for safety.” Professional Safety (April 2004). Presents a cost analysis model that can help safety, health, and environmental professionals measure, analyze, and communicate safety strategies in business terms.

“Proceedings From the Economic Evaluation of Health and Safety Interventions at the Company Level Conference.” Journal of Safety Research Vol. 36, No. 3(2005), pages 207-308. These articles describe several tools currently used by companies to evaluate the economic impact of safety and health interventions.

Susan Jervis and Terry R. Collins. “Measuring Safety’s Return on Investment.” Professional Safety (September 2001). To address the challenge of maintaining effective safety programs in the face of cutbacks, the authors discuss a decision tool to help safety managers determine which program elements offer the best return on investment.

Impact of OSHA Inspections
  • D. Levine, M. Toffel, and M. Johnson, “Randomized Government Safety Inspections Reduce Worker Injuries with No Detectable Job Loss.” Science, Vol. 336, No. 6083, pp. 907-911 (May 18, 2012). 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. See Abstract and Press Release.
  • A.M. Haviland, R.M. Burns, W.B. Gray, T. Ruder, J. Mendeloff, “A new estimate of the impact of OSHA inspections on manufacturing injury rates, 1998-2005,” American Journal of Industrial Medicine, (May 7, 2012). Found that OSHA inspections with penalties of Pennsylvania manufacturing facilities reduced injuries by an average of 19-24% annually in the two years following the inspection. These effects were not found in workplaces with fewer than 20 or more than 250 employees or for inspections without penalties. See Abstract.
  • M. Foley, Z.J. Fan, E. Rauser, B. Silverstein, “The impact of regulatory enforcement and consultation visits on workers’ compensation incidence rates and costs, 1999-2008.” American Journal of Industrial Medicine, (June 19, 2012). Reviewed changes in workers’ compensation claims rates and costs for Washington state employers having either an inspection, with or without a citation, or an On-site Consultation Program visit. The study concluded that enforcement activities were associated with a significant drop in claims incidence rates and costs and that similar results may also be attributable to Consultation visits. See Abstract.
Making the Business Case for Process Safety Management
  • Business Case for Process Safety. American Institute of Chemical Engineers, Center for Chemical Process Safety (CCPS). CCPS developed a brochure and presentation to help companies demonstrate the business case for process safety management.
Relationship Between Injury Rates and Survival of Small Businesses
  • Theresa Holizki, Larry Nelson, and Rose McDonald. “Injury Rates as an Indicator of Business Success.” Industrial Health Vol. 44(2006), pages 166-168. Study of new small businesses that registered with the Workers’ Compensation Board of British Columbia. A statistical correlation was found between workplace safety and health and the survival of a small business. Businesses that failed within one to two years of start-up had an average injury rate of 9.71 while businesses that survived more than five years had an average injury rate of 3.89 in their first year of business.
Other Resources
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The Cost of Not Protecting Our Workforce

A report generated by OSHA highlights the real costs associated with on the job injuries, who pays them and how this impacts the employee and taxpayers.

Whether an employee is working on a high-rise building or driving a forklift, employers have the responsibility, and what we feel is an obligation to protect their employees from injury. By investing in training and safety, employers get fewer injuries, lower costs, more productivity and an improved satisfaction which often leads to less turn over. But all companies do not feel that way. Many are finding ways to avoid responsibility for providing safe working conditions for their most dangerous jobs.

The report highlights what some companies do to avoid responsibility and what this does to not only the employee, but his/her family and taxpayers when an accident with injury occurs. Shifting the financial burden however does not make it go away. It shifts it to over-burdened worker’s compensation and government systems. In addition, a worker who is injured can expect to make an average of 15% less income after the injury. And while the creating of OSHA in 1970 by President Nixon has greatly reduced on the job accidents, injuries and deaths dramatically, we still have approximately 4,500 deaths every year due to workplace accidents.

As a full-service forklift dealership, safety is one of our most important topics. Forklifts are dangerous pieces of equipment for the operator and anyone working around the forklift. While manufacturers work hard to innovate and make them safer, nothing can replace a well trained and cautious operator.

Report – The Cost of Not Protecting Workers

5 Tips to Decrease Heat Related Illnesses

The hot summer months are upon us. With increased heat and humidity workers become more susceptible to heat-related illnesses. Workers who are not accustomed to working in the heat can quickly become ill and experience heat stroke, which can lead to serious illness and even death. There are a few things to keep in mind about heat-related illness and what you can do to help prevent it in your workers.

  1. Train your employees about the dangers of heat-related illnesses. OSHA has excellent training information and materials to help you relate this information to all of your employees who work in the heat.  Part of that training should be to recognize the symptoms of heat-related illnesses and to act upon them immediately. Never brush it off and continue working. The symptoms exist for a reason!
  2. Understand that all employees are not equally able to resist the heat. Employees should be able to assess their own conditioning and how well they handle heat. Employees who are taking certain prescription medications or have certain chronic illnesses, such as diabetes, need to pay special attention to how they feel while working. Employees who are new to outdoor jobs are often most susceptible to heat-related illnesses. Try to ease them into the normal workload gradually, until you’re confident they are acclimated.
  3. Provide additional water stations during the hotter months, at more convenient locations, and encourage employees to drink water every 15 minutes or so, based on temperature. Never wait until you are thirsty to start re-hydrating.
  4. Provide for more frequent breaks. In the long run employees will be more productive in the heat if they are getting proper rest to allow their bodies to cool down while also keeping themselves better hydrated during these breaks.
  5. Proper ventilation and air movement inside your warehouse or material handling facility is very important in keeping the temperature at safe levels and your workers cool. Ceiling fans, screen doors for warehouse dock doors, and roof vents are great ways to keep your facility comfortable and more productive.

OSHA has provided a wealth of information to help you provide a safe atmosphere to deal with the summer heat. While OSHA does not have a standard pertaining to preventing heat illnesses, it is up to us to be sure we have done everything that we can to help our employees stay safe and avoid heat-related illnesses.

Well-trained and equipped employees are more productive employees. Keeping them safe from the heat during the summer months ensures better productivity for tomorrow and years beyond. But it is ultimately up to us as the employers to be sure our employees are prepared to understand and act accordingly to ensure their own safety.

Four Traits of Safety-Minded Companies

As managers and owners, we want a safe work environment for all of our employees. Unfortunately, all too often it escapes us. Time passes quickly, and initiatives that were once important standards become guidelines or even merely suggestions. How can we ensure that when we put safety measures in place, they will stay in place as employees come and go in a business climate that is constantly in flux?

While we lack the space to answer this question in full detail here, there are a few major approaches to providing a safe work environment that transcend industries, equipment and facilities. We outline these “hows and whys” of workplace safety below.

Since 1970, OSHA has worked to create a safer workplace for all employees, and their mission has been very successful. However, accidents still happen, and not only at companies willfully violating OSHA standards. Sometimes safety goes beyond meeting standards due to unique circumstances in certain operations.

The following are a few approaches to safety that have helped both large and small companies to achieve better workplace safety, fewer incidents and accidents, lower costs, more productivity and better workplace attitudes.

  1. Safety is integrated with company mission – Safe companies put as much emphasis on doing things safely as on doing them productively. From day one, every employee knows they are working for a company that would rather they do their job safely than quickly. These employees will lockout a piece of equipment when something goes wrong, will replace light bulbs that need it instead of ignoring them and will report unsafe behavior or unsafe conditions.
  2. Training never ends – Employees are involved in ongoing training – how to lift more safely, how to sit properly in a chair, how to operate a certain piece of equipment and so on. Your business is fluid: things change; equipment changes; and equipment, building space and employees are added. As your conditions change, your training must address these changes. Training for the safest work environments is never a one-time event or a two- or three-day training initiation. It is an ongoing pursuit of the safest possible work facility. It should be a goal of all employees to see that their coworkers go home safe every night.
  3. Involvement at all levels – While involvement in a safe work environment must start from the corner office, the mission and strategy it is also important to ensure that every employee knows that they are involved and responsible. It is a good idea to create safety teams for every facet of your business, to revolve people in and out of those teams, and to have them conduct frequent facility or department reviews to identify potential threats. The most successful companies have reward systems for reporting anything that could be a potential threat, even if it is as minor as a sharp corner on a coat rack. This keeps all employees engaged in creating a safe work environment.
  4. Accountability – Once you have established your safety mission and mapped out your strategy, everyone involved must be held accountable. No one can shirk their safety responsibilities. If a sharp corner on a coat rack is missed and someone gets cut, find out why no one noticed. Are they doing regular inspections? If safety standards are not being met, it is the leadership’s job to find out why and fix it. Everyone must know that if an accident happens on their watch, it must be accounted for and a plan must be designed to ensure that it will not happen again.

A truly safe, productive and profitable workplace is attained through ongoing efforts, and these are just a few of the major traits of successful organizations. We encourage you to seek the assistance of OSHA, NIOSH or other private safety consultants to help you organize and strategize your safety plans.

A safe organization on all levels is happier and more productive. Take advantage of the benefits of being a safety-minded organization and watch the benefits blossom.