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

Taylor Machine Works Featured at White House

In July, President Trump hosted companies from across the country at the White House for the Made in America Product Showcase. The White House was highlighting and celebrating each state’s effort and commitment to American made products by bringing in and showing off products from all 50 states that are made and produced in the United States. Cal-Lift Inc. is proud to represent, Taylor Machine Works, the company chosen to represent Mississippi at the event. Below is a picture taken at the event featuring a Taylor as part of the celebration of American businesses.

Big Red at White House - sm

Companies participating in the event, by state, included:

State Company Product
Alabama Altec Bucket trucks
Alaska Alaska Bowl Company Bowls
Arizona PING Golf Golf clubs
Arkansas Hytrol Conveyer belt
California The California Wine Institute Wine
Colorado Gordon Signs Neon signs
Connecticut Sikorsky Helicopters
Delaware ILC Dover LP NASA space suit
Florida Tervis Tumblers
Georgia Chick Fil A Food
Hawaii Koloa Rum Co. Rum
Idaho Boise Cascade Company Engineered wood floors
Illinois Caterpillar Heavy equipment manufacturer
Indiana Broomcorn Johnnys Brooms
Iowa RMA Armament Body armor, dummies
Kansas Grasshopper Company Lawnmower
Kentucky Campbellsville Apparel Company Apparel
Louisiana Marucci Sports Baseball bats
Maine Hinckley Yachts Yacht
Maryland Eddie Heath’s Crab Pots Crab pot manufacturer
Massachusetts St. Pierre Manufacturing Corporation Horseshoes
Michigan Milton Manufacturing Fabric
Minnesota Faribault Woolen Mill Wool blankets
Mississippi Taylor Machine Works Forklift
Missouri Beehler Corporation Door hinges
Montana Simms Fishing Fishing gear
Nebraska Greater Omaha Packing Beef
Nevada Kimmie Candy Candy
New Hampshire Cider Belly Doughnuts Doughnut company
New Jersey Campbells Soup Soup
New Mexico Desert Plastics Plastic Manufacturer
New York Steinway Piano
North Carolina Cheerwine Soda
North Dakota Dakota Outerwear Co. Military outerwear manufacturer
Ohio Bully Tools Shovels, rakes, hoes etc.
Oklahoma DitchWitch Trencher/excavator
Oregon Leupold and Stevens Sights and scopes
Pennsylvania Ames Wheel barrows
Rhode Island Narragansett Brewing Company Beer
South Carolina Casual Cushion Company Cushions
South Dakota K Bar J Leather Shotgun chaps
Tennessee Gibson Guitars Guitars
Texas Stetson Hats Cowboy hats
Utah Colonial Flag Company Flags
Vermont Dubie Family Maple Maple syrup
Virginia National Capital Flag Company Flags
Washington Liberty Bottleworks Water bottles
West Virginia Homer Laughlin China Company Iconic fiesta line of china
Wisconsin Pierce Manufacturing Two firetrucks
Wyoming Aviat Aircraft Model aircraft

The Trump Administration is honoring the incredible workers and companies who make “Made in America” the world standard for quality and craftsmanship. America is a nation that honors the work of gifted and skilled tradespeople.

The President has also taken steps to ensure that Americans are equipped with the tools necessary to thrive in the modern economy by signing an Executive Order to promote and create more flexible apprenticeship programs that arm American workers with valuable skills.

We are proud to represent Taylor Machine Work’s products. Taylor has a history of the highest quality, heavy-duty forklifts on the market. Learn more about Taylor Machine Works.

Industrial Trucks and the US Economy

Industrial trucks and forklifts sales are directly tied to our economy. When our economy does well, more forklifts are required to move the goods ordered by customers and end-users. Conversely, when a downturn occurs, forklift sales drop, sometimes dramatically as they did with the recession of 2009. What few people understood until now, the economic impact these forklifts make on our economy. Recently the Industrial Truck Association in conjunction with Oxford Economics researched the topic, and below are some of the significant findings.

  • Industrial truck manufactures generate 209,600 jobs in the US, directly and indirectly.
  • The economic impact of forklift on the US economy is $25.7 billion dollars. Here in California forklifts generate over $1.9 billion dollars to our state economy.
  • Over $15 billion of that contribution is a result jobs that support forklift sales and service such as service technicians, the parts that are made and sold and installed on forklifts, training centers etc…
  • The Bureau of Labor and Statistic (BLS) estimates that there are about 540,000 industrial truck operators in the US.
  • There are over 200,000 forklifts sold annually in the US.
  • Over 1 million forklifts are sold around the world each year.
  • The industrial truck industry generate about $5.3 billion dollars in state and local taxes.

As you can see, when we sell a forklift we create a lot of work not only here at Cal-Lift, but for our customers, their customers and the impact is felt all throughout our state and national economy.

Report – Industrial Trucks Impact on US Economy

Four Essentials of a Safe Forklift Fleet

There are plenty of simple, small things you can do to improve forklift safety in your facility. These include keeping the floor clean, installing mirrors at the ends of your aisles and prominently displaying safety posters. We have identified five best practices within companies that take forklift safety to the next level.  They are:

  1. Operator and Pedestrian Training – When we say training, we mean true training. A one-day class and a 10-minute hands-on review will not suffice if your goal is to make your forklift fleet a truly safe one. In addition to initial training and refresher training, you must be sure you re-train staff any time you introduce a different piece of equipment, if an operator is re-assigned or if your operation or facility undergoes any significant changes.  In addition to operator training, you should ensure the safety of all your employees and guests by providing training to every employee about how lift equipment operates, the inherent dangers of being around them and how to conduct themselves in a facility with this equipment.
  2. Utilize available safety equipment – Ensuring that all your lift equipment and facility is equipped with up-to-date and working safety functions will go a long way in creating awareness of the presence of lift equipment. Back-up alarms, horns, lights (front and rear combo) and strobes are the hallmarks of forklifts that are easily seen and heard. In addition, be sure to ask your forklift provider about available optional safety equipment.
  3. Planned maintenance – A robust planned maintenance program will catch small maintenance issues before they blossom into giant repair headaches. This will also dramatically reduce potential accidents, making your facility a safer place to work. Your planned maintenance program should be developed based on how your forklifts are utilized, your manufacturers recommendations and should be carried out by a professional, trained staff of forklift technicians.
  4. Regular Inspections – We recommend two types of inspections. The first, as required by OSHA, are daily inspections and are a must for any company. Your operators must be trained to perform accurate and thorough inspections of both Internal Combustion (IC) forklifts, electric forklifts, and any other type of lifting equipment you operate. Damage from previous operations can occur without the operator knowing it, and failure of major components can lead to serious injury, product loss and facility damage. In addition, putting your forklift fleet on a regular service cycle or Planned Maintenance Program, performed by lift truck professionals. This is the key to achieving maximum safety, up-time and productivity.

The benefits of a safe forklift fleet go far beyond reducing injuries. They include:

  • Lower Costs – Having safe forklift operators and providing a safe operating environment, like having safe automobile drivers and better roads, will reduce your operating costs. The frequently inspected equipment will operate within normal guidelines and minor service issues won’t blossom into giant repair headaches.
  • Improved Productivity – Safe operators in a safe environment will be more productive, since down time is reduced as a result of sound equipment and reduced operator and pedestrian accidents.
  • Reduced Insurance and Workers Compensation – A safe work environment with well-trained operators will likely result in lower insurance rates and workers’ compensation in injury-related claims.

Forklift safety is no accident. Taking these measures puts you on the path to creating a safe and productive work environment for your employees.  An investment in safety and productivity adds to your company’s long-term bottom line and benefits those who operate on and around forklifts.

Have a question about forklift safety, training, service or planned maintenance? Please contact your local Cal-Lift branch, or give us a call at 800-322-5438.