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Page last reviewed: 08/30/2010
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Highlights |
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- Safety & Health Management Systems.
OSHA eTool. There are four crucial questions you should be asking when it comes to
safety and health programs. The detailed answers are found in the four modules
of this eTool, including a module on the benefits of implementing an effective safety and health program.
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Making the Business Case for Safety and Health
Workplace fatalities, injuries, and illnesses cost the country billions of
dollars every year. In its 2007 Workplace Safety Index, Liberty Mutual estimated that employers paid
almost $1 billion per week for direct workers' compensation costs for the most disabling workplace
injuries and illnesses in 2005. Employers that implement effective
safety and health management systems may expect to significantly reduce injuries and illnesses and
reduce the costs associated with these injuries and illnesses, including workers’ compensation
payments, medical expenses, and lost productivity. In addition, employers often find that process
and other changes made to improve workplace safety and health may result in significant improvements
to their organization’s productivity and profitability.
Highlights
The
following items help illustrate why investing in workplace safety and health can
improve your organization’s financial performance.
- The total estimated national costs of occupational injuries and illnesses among civilians in the United States in 2007 were approximately $250 billion. The costs of injuries were approximately $192 billion and the costs of illnesses were approximately $58 billion.
Source: J. Paul Leigh, "Economic Burden of Occupational Injury and Illness in the United States." [PDF*- 611 KB] Milbank Quarterly, Vol. 89, Issue 4, p. 728 (Dec. 2011).
- According to the 2011 Liberty Mutual Workplace Safety Index, the most disabling workplace injuries and illnesses amounted to more than $50 billion in direct U.S. workers’ compensation costs in 2009.
Source: 2011 Liberty Mutual Workplace Safety Index [PDF* - 677 KB, 2 pages]. Liberty Mutual Insurance Company, (2011).
- Companies that did not adequately manage workplace safety and health performed worse
financially than those who did from November 2004 to October 2007. Investors could have
increased their returns during this period had they accounted for workplace safety and health
performance in their investment strategy.
Source: Goldman Sachs JBWere Finds Valuation Links in Workplace Safety and Health Data
[PDF*- 83 KB].
Goldman Sachs JBWere Group, (2007, October).
- Injuries and illnesses increase workers' compensation and
retraining costs, absenteeism, and faulty product. They also decrease
productivity, morale, and profits. Businesses operate more efficiently when they
implement effective safety and health management systems. For example, a
plant with 50 employees decreased production of faulty product and saved more
than $265,000 with a strong safety and health program.
Source:
Safety and Health Add Value. OSHA Publication 3180. Also available as a 200
KB PDF,
6 pages.
- There is a direct positive correlation between investment in safety, health, and
environmental performance and its subsequent return on investment.
Source:
White Paper on Return on Safety Investment. American
Society of Safety Engineers (ASSE), (2002, June).
- Over 60 percent of chief financial officers in one survey reported that each $1
invested in injury prevention returns $2 or more. Over 40 percent of chief
financial officers cited productivity as the top benefit of an effective
workplace safety program.
Source: Chief Financial Officer Survey.
Liberty Mutual Insurance Company, (2005).
- A forest products company saved over $1 million in workers' compensation and other costs from 2001
to 2006 by investing approximately $50,000 in safety improvements and employee training costs. The
company has participated in OSHA's Safety and Health Achievement Recognition Program (SHARP) since
1998.
Source: Anthony
Forest Products. OSHA Small Business Success Stories, (2007, February).
- The average worksite in OSHA’s Voluntary Protection
Programs (VPP) has a Days Away Restricted or Transferred (DART) case rate of 52%
below the average for its industry. Fewer injuries and illnesses mean greater
profits as workers’ compensation premiums and other costs plummet. Entire
industries benefit as VPP sites evolve into models of excellence and influence
practices industry-wide.
Source: Voluntary
Protection Programs (VPP). OSHA.
- Some of the companies that participated in an OSHA Strategic Partnership
to address ergonomic issues in foundries in Wisconsin have seen significant
reductions in injury and illness rates. These reductions have led to a decrease
in workers' compensation claims and associated costs.
Source: Foundry Ergonomics Partnership. OSHA
Strategic Partnership Program Success Stories, (2005,
January).
- An OSHA Strategic Partnership covering construction of a power plant in Wisconsin resulted in injury
and illness rates significantly below the construction industry rates in Wisconsin. In 2006,
employees worked over 1.7 million man hours at the site with zero fatalities. The 2006 Total Case
Incident Rate (TCIR) was 69 percent below the Wisconsin average and the 2006 Days Away, Restricted,
Time Away (DART) rate for the site was 75 percent below the Wisconsin average.
Source:
Weston 4 Power Plant Construction. OSHA Strategic Partnership Program Success Stories, (2007,
February).
Accessibility Assistance: Contact the OSHA Directorate of Cooperative and State Programs at 202-693-2200 for assistance accessing PDF materials.
*These files are provided for downloading.
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