Health and Safety vs. Productivity

In this day and age, it is rare to come across anyone arguing that health and safety management is not only a necessity in but a benefit to workplaces. However, as the cutting back of “red tape” becomes more common, we wonder what the relationship between health and safety vs. productivity in workplaces actually is.

It's a difficult question for OHS professionals to hear, but it has an interesting and evidence-based answer.

What is the relationship between health and safety and productivity?

The misconception that productivity is contrary to good health and safety practice still exists in many workplaces.

Terry L. Mathis, an EHS thought leader, argues that neither safety nor productivity work well without the other; a belief taking Health and Safety policy to where it is today. However, 1 in 3 workers believe their employer values productivity more than safety.

The vision of safe production

A philosophy where everyone recognizes the company must survive and prosper, but safely.  D. Cooper PhD, founder of consultancy BSMS Inc., argues that this is a realistic goal leading 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 health and safety vs. productivity debate will always exist, as will many things vs. productivity (just type in “productivity vs” to Google).  Health and safety differs as it protects the main component of productivity - its workers. But how can you explain the connection?

Evidence to support your cause

We need evidence-based answers now more than ever (OHS management included).  Whether you are building a business case for new EHS software or putting together a worker training program, it's important to keep the following information in mind:

Accidents at work impact the economy, the employer, and the employee. This is your framework for breaking down the evidence.

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The Economy

The impact of work-related accidents and illnesses on the competitiveness of a country’s marketplace has been the topic of many studies. Hesapro found a clear correlation between the two - countries with a better workplace health and safety record, such as Finland, the United States and Denmark, are more competitive in the global economy. Those at the other end of the scale, included Indonesia and Brazil.

Health and Safety vs. Productivity

Why? Businesses choose to work with low-risk partners sharing their values.  For example, a Swedish contractor might be reluctant to provide workers to a Zimbabwean client in fear of the predominantly-Western value of health and safety not being respected, and therefore putting their staff at risk.

Country productivity vs. fatal injury rate
Let's look at 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:

  1. Luxembourg
  2. Norway
  3. Switzerland
  4. Denmark
  5. Iceland

Every one has stringent health and safety legislation in place, and relatively low fatal injury rates. Oh yeah, and Iceland is the safest country in the world. For the fifth year running.

The Employer

Costs to the employer for an accident:

  • Workers' compensation payments
  • Medical expenses
  • Noncompliance fines
  • Litigation expenses
  • Property losses
  • Indirect costs

Let's look at a few.

Workers compensation payments
The first cost associated with accidents is compensation. (We’ve all seen the adverts! “Have you had an accident at work that wasn’t your fault?”)

In 2010, employers paid $51.1BN in compensation.  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. It is clear that health and safety keeps employees fit to work, and be productive.

Non-compliance fines
Fines levied by health and safety regulators are hefty. What does a $1.9M fine feel like?  Just ask Aluminium Shapes of New Jersey, who received OSHA’s largest fine of 2017.

In the UK, recent changes to sentence calculation resulted in first-year operation fines tripling to £32.4M GBP.  Penalties are a direct cost of cutting health and safety corners.

Indirect costs
Poor health and safety can result in indirect costs negatively impact productivity, including: project delays, damaged equipment, an abrupt loss of skilled workers and losing out on business deals.

Productivity generates profit, so in frank, monetary terms, the value of each life lost is an estimated $8.7M. That’s a whole lot of productivity.

The Employee

We've established that accidents don’t just affect the injured party, but of course, the biggest impact is on the worker.  They must endure the pain, discomfort, loss of earnings, loss of working ability, disability or even death.

Besides avoiding these consequences, an effective health and safety program actually improves worker morale – and productivity.

In 2017, the NSC found that 36% US workers felt safety took a back seat.  Additionally,

  • 30% are too afraid to report safety issues,
  • 48% feel safety meetings are held less often than required, and
  • 39% think management does the minimum to keep employees safe.

So, it appears a large proportion of the US workforce feel their safety is not valued.  Perhaps an area of improvement in boosting productivity?

Happy employees are 12% more productive, and unhappy employees are 10% less productive. It's pretty compelling evidence.

Leveraging the health and safety vs. productivity opportunity

A strong safety culture cannot be achieved overnight. However, you now have the evidence that good health and safety practice can improve productivity, so your next step is planning for change.

This may include:

  • Presenting a business case to invest in OHS
  • Continuous learning programs
  • New EHS software (cough, cough)
  • Improving communication between workers and management
  • Setting Key Performance Indicators (KPIs) to track progress

As Mathis says, few organizations want to be the safest company ever to go bankrupt. The answer to health and safety vs. productivity is a complex one, but can be summed up: workplace safety culture, employee morale and productivity are all part of the same chain – break one link and it all goes.

 

Looking to get buy-in for new EHS software?

Drawing upon industry knowledge from experts in law, EHS and business, this paper looks at numerous angles of the case for EHS software and will help you decide how best to position yours. Get your copy of Building a Business Case for EHS Software here.

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Hannah Stewart manages the Digital Marketing team at Pro-Sapien, and has been with the company since graduating with a BA Hons in Communications in 2015. Hannah has a keen interest in technology advancements and enjoys engaging EHS professionals in conversations about how the profession will be affected by such changes. At Pro-Sapien, Hannah manages all things marketing and works closely with the Sales team on business development.

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