Benefits

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

• Chief Financial Officer Survey. Liberty Mutual Insurance Company, (2005). This survey asked senior financial executives at large and mid-sized companies about their views on safety and insurance. These executives cited increased productivity and reduced costs as the top benefits of workplace safety and health.

Return on Investment in Workplace Safety and Health

• 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.
   
• White Paper on Return on Safety Investment. American Society of Safety Engineers (ASSE), (2002, June). Concludes that there is a direct, positive correlation between investment in safety, health, and the environment and its subsequent return on investment.
  • Investment in Workplace Safety Triggers Positive Bottom Line Results for Businesses, Economy, Safety Official Notes. Press Release, (2004, March 23). Summarizes the ASSE White Paper on Return on Safety 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. American Industrial Hygiene Association (AIHA), (2008, May). 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.
   
• Anthony Veltri, Mark Pagell, Michael Behm, and Ajay Das. "A Data-Based Evaluation of the Relationship Between Occupational Safety and Operating Performance." 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.

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.
  
  Journal Articles
  
  
  • Michael Behm, Anthony Veltri, and Ilene Kleinsorge. "The Cost of Safety: Cost analysis model helps build business case for safety." Professional Safety (2004, April). 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 (2001, September). 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.

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

• Safety and Health Add Value. OSHA Publication 3180. Also available as a 200 KB PDF, 6 pages. Summarizes how safety and health add value to your business, workplace, and life.

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