In this day and age, at least in wealthy countries, it is rare to come across anyone who will argue that health and safety management is not only a necessity in but a benefit to workplaces. However, as we now regularly hear about the cutting back of “red tape” in the news, one can wonder what the relationship between health and safety vs. productivity in workplaces actually is. The question is difficult for OHS professionals to hear, but one with an interesting and evidence-based answer.
What is the relationship between health and safety and productivity?
There is a misconception that still exists in workplaces that productivity is on the contrary to good health and safety practice. Terry L. Mathis, a respected thought leader in the industry, argues that in fact, neither safety nor productivity can work well without the other – and it is a belief that has got Health and Safety policy to where it’s at today. Nonetheless, 1 in 3 workers still believe their employer values productivity more than safety.
The vision of safe production
The vision of safe production can be classed as a philosophy where everyone recognizes the company must survive and prosper, but that it must do so safely. D. Cooper PhD, founder of consultancy BSMS Inc., argues that this goal is a realistic one that leads to all-round better economic performance:
“Without a doubt, people will test the company’s resolve, but if the safe production philosophy is consistently followed, a safety partnership will develop to deliver safety excellence. In turn, this will lead to more effective safety leadership, employee engagement (engaged employees are 5 times less likely to experience an injury), and other benefits.”
The question of health and safety vs. productivity will always exist, as will many things vs. productivity (type in “productivity vs” to Google to see the common searches). What’s different about health and safety is that it protects the very means by which a company can be productive in the first place – its people. So how can you go about explaining the connection?
Evidence to support your cause
We have a need for evidence-based answers more now than ever (in OHS management included!). Whether you are building a business case to get buy-in for new OHS software or putting together a program for worker training, the following information can be useful to know.
Accidents at work impact a number of ‘stakeholders’, if you will – three of which are the employer, the employee, and the economy. This can be a good framework for breaking down the evidence.
The impact of work-related accidents and illnesses on the competitiveness of a country’s marketplace has been the topic of many studies. Using data from the ILO, Hesapro (2013) found a clear correlation between the two, indicating that countries with a better workplace health and safety record, such as Finland, the United States and Denmark, are more competitive in the global economy than those at the other end of the scale, such as Indonesia and Brazil.
Why? Businesses choose to work with low-risk partners that share their values. For example, a contractor based in Sweden might be reluctant to provide workers to a Zimbabwean client for fear that the predominantly-Western value of health and safety will not be respected, or that it may face a challenging initiative to make it so. Or they may choose Singapore for their new operations over Thailand.
Country productivity vs. fatal injury rate
For further supportive evidence, consider the most productive countries in the world and their health and safety records. According to the latest data, the top 5 most productive countries are:
- United States
Each of these countries has stringent legislation in place for health and safety at work, and relatively low fatal injury rates. The only outlier is the United States where the rate of fatal injuries per 100,000 FTEs is 3.6, well above the comparative EU average of 1.3. (Compare that to Brazil, Indonesia, South Africa, Thailand and Zimbabwe, each of which has a fatal injury rate above 5.5.)
That takes us onto the next stakeholder in the health and safety vs. productivity debate – the employer. Costs incurred by the employer when an accident takes place can include:
- Workers compensation payments
- Medical expenses
- Noncompliance fines
- Litigation expenses
- Property losses
- Indirect costs
Let’s take just a few of these.
Workers compensation payments
The first cost associated with accidents that comes to many people’s minds is compensation. (“Have you had an accident at work that wasn’t your fault?” We’ve all seen the adverts!) In 2010 employers paid $51.1BN for direct workers compensation costs. Digging deeper, the National Safety Council found that each prevented lost-time injury or illness saves an employer $37,000, and each avoided fatality saves $1,390,000 – in this sense, it is clear that health and safety helps facilitate productivity by keeping employees fit to work.
Another consequence of poor health and safety is fines levied by regulators, such as OSHA (US) or the HSE (UK). What does a $1.9M fine feel like? Ask Aluminum Shapes LLC of New Jersey, who received OSHA’s largest fine of 2017. In the UK, changes made in 2016 to the way sentences are calculated resulted in a tripling of fines over the first year of operation totaling £32.4M GBP. Penalties are a direct cost of cutting health and safety corners.
Organizations must also consider that poor health and safety can result in indirect costs that negatively impact productivity. These can include delays in project schedules, damage to equipment, an abrupt loss of skilled workers, or – as our fictional Swedish company demonstrates by choosing Singapore over Thailand – losing out on business deals due to a lack of confidence in the company’s safety culture.
Productivity generates profit, so to speak in frank, monetary terms, beyond the direct costs to an employer OSHA estimates the value of each life lost is $8.7M. That’s a whole lot of productivity.
Although accidents don’t just affect the injured party, by far the biggest impact that health and safety has is on the worker. He/she is who must endure the pain, discomfort, loss of earnings, loss of the ability to continue his craft, disability or even death. Besides mitigating risk and avoiding the aforementioned consequences, having an effective health and safety program in place actually improves worker morale – and thus, can increase your (already protected) productivity.
In 2017 the NSC found that 36% of surveyed US workers felt that safety took a back seat to completing job tasks in their workplace. Additionally;
- 30% are too afraid to report safety issues.
- 48% feel safety meetings are held less often than they should be.
- 39% think management does the minimum required by law to keep employees safe.
These findings translate to a large proportion of the US workforce feeling their safety is not valued by their employer. This is an area employers can work on in order to boost productivity. Studies have found that happy employees are 12% more productive, whilst unhappy employees prove 10% less productive, so if you don’t already have a strong safety culture you may wish to look at it as an opportunity for productivity improvement.
Leveraging the health and safety vs. productivity opportunity
Establishing a strong safety culture cannot be achieved overnight nor with one change in your strategy – it involves updating “the way we do things around here.” However, now that you have the evidence that health and safety best practice can improve productivity, your next step will be planning for change which may include:
- Putting a business case to the board for investment in OHS
- Continuous organizational learning programs
- New health and safety management software
- Improving the communication between workers and management
- Setting Key Performance Indicators (KPIs) to track progress
Mathis puts it well when he says that few organizations want to be the safest company ever to go bankrupt. We must tolerate risk. The answer to health and safety vs. productivity is a complex one with plenty of supporting evidence, but can be summed up as so: workplace safety culture, employee morale and productivity are all part of the same chain – break one and they all go.
Additional helpful links
EHS Today. T. L. Mathis "Safety and Performance Excellence: Safety vs. Productivity: If Either Wins, Both Lose" Available: http://www.ehstoday.com/safety-leadership/safety-and-performance-excellence-safety-vs-productivity-if-either-wins-both-lose
OSHA Safety Management. "Productivity vs. Safety: What Wins? Employee Perception INFOGRAPHIC" Available: https://www.oshasafetymanagement.com/blog/productivity-vs-safety/
Royal Holloway. "True or not? Why the need for evidence-based answers is more important than ever" Available: https://www.royalholloway.ac.uk/aboutus/newsandevents/news/2018-articles/true-or-not-why-the-need-for-evidence-based-answers-is-more-important-than-ever.aspx
Hesapro. "The link between productivity and health and safety at work" Available: http://www.hesapro.org/files/Background_Research.pdf
Health and Safety Executive. "European comparisons" Available: http://www.hse.gov.uk/statistics/european/
IOSH. "Health and safety sentencing guidelines: one year on" Available: https://www.iosh.co.uk/sentencingguidelines
Fast Company. "Why Happy Employees Are 12% More Productive" Available: https://www.fastcompany.com/3048751/happy-employees-are-12-more-productive-at-work
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