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The business case for safety and health

Small and medium-sized enterprises (SMEs) account for 82% of occupational injuries, according to a report from the EU-OSHA (The business case for safety and health). It looks at the economic aspects of occupational safety and health (OSH) interventions in SMEs.

The report sets out several challenges faced by SMEs in terms of OSH, namely:

  • SMEs are subject to greater risks, as shown by the relevant statistics
  • many OSH improvements are low-cost solutions, but sometimes SMEs have problems financing an OSH policy, owing to limitations on their access to capital and do not benefit from the effects of economies of scale
  • SMEs have problems implementing an OSH policy, owing to a variety of organisational features
  • governments face difficulties in fostering effective OSH management in SMEs, mainly because there are so many SMEs and these businesses have limited resources.

This report examines the economic aspects of occupational safety and health (OSH) interventions in small and medium-sized businesses (SMEs). First, case studies in the existing literature were identified and examined. Second, 13 new case studies on OSH initiatives in European SMEs were developed, with a business case for each intervention prepared according to a common model. The OSH interventions studied were generally profitable, and these new case studies therefore provide a useful tool to allow owners and managers of SMEs an insight into the potential benefits of improving OSH and the key factors involved in carrying out a cost–benefit analysis.

The report suggests that, although SMEs typically have very limited resources to invest in OSH, research has shown that once SMEs understand the relationship between OSH and productivity, they are then able to see the link between OSH and economic performance. Therefore, good information on how interventions might both improve safety or health and reduce costs is key.

The report aimed to provide clear case studies that can act as ‘eyeopeners’ for SMEs, raising awareness of the benefits of OSH at enterprise level and helping to change the perception of OSH, so that it is viewed not as a cost factor but as a beneficial investment.

Thirteen new case studies of OSH-related interventions in European SMEs were developed for this report. For each intervention, a business case was developed, examining all the costs and benefits, regardless of whether they were purely OSH-related or not. The case studies covered sectors including manufacturing, waste management, construction, and agriculture.

Of the 13 interventions, 11 were found that provide a positive return on investment in the five year period examined.

With regard to the profitability of OSH initiatives, some qualitative results from the new case studies included in the report are identified:

  • broad interventions appear to be more profitable than interventions targeting a particular issue related to the sector of the enterprise
  • interventions that include worker participation 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. 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 for an OSH intervention.

It is concluded that as broad interventions appear to be particularly profitable, certain beneficial interventions, such as automatic palletising and use of load-handling equipment, are therefore widely applicable and can be implemented in a variety of businesses in many different sectors. Although further research is needed on the business case for OSH in SMEs.

The business case for safety and health.

 

Contains information published by EU-OSHA: Copyright 1998-2014 European Agency for Safety and Health at Work

 

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