|Add Value. To Your Business.
To Your Workplace. To Your Life.
|Occupational injuries and illnesses are at record lows because of the combined efforts of business, government, labor, and professional, trade, and community organizations. Since OSHA’s establishment in 1971, occupational fatality rates in the United States have been cut in half and injury and illness rates have declined by 40 percent.
Despite these significant reductions, the Bureau of Labor Statistics reports that 6.1 percent of private-sector employees suffered 5.7 million workplace injuries and illnesses in 2000. Forty-six percent of those injury cases required days away from work for recuperation or restricted work activity.
J. Paul Leigh of the Stanford Medical Center notes that businesses spend $170.9 billion a year on costs associated with occupational injuries and illnesses—expenditures that come straight out of company profits. Injuries and illnesses increase workers’ compensation and retraining costs, absenteeism, and production faults. They also decrease productivity, morale, and ultimately, profits.
Fortunately, statistics from injury and illness reports filed with OSHA show that workplaces that establish safety and health management systems reduce their injury and illness costs by 20 to 40 percent. "In today’s competitive business environment," says OSHA Administrator John L. Henshaw, "the black-and-blue of workplace injuries can be the difference between operating in the black and running in the red."
But the impact goes far deeper. Workplaces with active safety leadership have fewer injuries, are often rated as better places to work, and have more satisfied, more productive employees who are less likely to change jobs. Studies show that these employees also return to work more quickly after an injury or illness and produce higher-quality products and services.
Perhaps less tangible, but equally important, is the personal impact of workplace safety and health on employees’ lives. As University of Massachusetts Center for Health Policy and Research associate professor Allard Dembe noted, an occupational injury or illness "potentially affects every aspect of life: the pursuit of a career, leisure activities, religious orientation and practice, personal and group relationships, family responsibilities, involvement in political activities, and so forth."
Safety and health add value. To your business. To your workplace. To your life. This message is far more than a slogan; it’s the foundation on which OSHA has worked for more than 30 years to help employers and employees save lives, prevent injuries, and protect the health of America’s workforce.
Adding Value to Business
According to Henshaw, "If safety pays, safety and health pay more. And the development of comprehensive safety and health management systems can save millions of dollars, lives, and lost work hours."
The 864 companies that participate in the Voluntary Protection Programs—OSHA’s recognition programs for worksites with exemplary safety and health programs— know this firsthand. As a group, they average 54 percent fewer injuries and illnesses and 60 to 80 percent lower lost-workday rates than other companies in their industries. As a result, the Voluntary Protection Programs Participants’ Association estimates that these sites have saved more than $1 billion since 1982.
For example, as the Mobil Chemical Company brought its plants up to VPP standards, the company reduced recorded injuries by 32 percent, lost-workday cases by 39 percent, severity of cases by 24 percent, and workers’ compensation costs by 70 percent.
Attention to safety, and the increased attention to production detail that results, can lead to improved product design, innovation, and morale. This can result in faster identification of faulty processes or products, decreasing costs, increasing productivity, and higher corporate profits. Many companies are recognizing the extensive benefits of implementing safety and health management systems.
In Colorado, a program that gives workers’ compensation premium discounts to firms that institute safety and health programs has attracted 500-plus participants—more than half of them small businesses with fewer than 100 employees. In the five years since the program started, these companies decreased their lost worktime injury rates by at least 10 percent per year, and the cost of their workers’ compensation claims declined by at least 20 percent per year.
In Massachusetts, 1,800 firms enrolled in a similar state program registered drops of 20 percent or more per year in workers’ compensation claims during the program’s first two years.
According to Henshaw, "Since workers’ compensation represents up to 40 percent of the total costs associated with occupational injuries and illnesses in the United States, the cost savings for these and other firms are extremely significant." The direct cost of workers’ compensation to businesses is an estimated $60 billion.
Yet, a 1999 Michigan State University study reveals that up to 40 percent of workplace injuries do not result in workers’ compensation claims. The American Society of Safety Engineers contends that these injuries still entail employer costs in the form of increased absenteeism at the company and higher health insurance premiums for all policy holders.
Costs also come in the form of decreased productivity, which often suffers when businesses have to hire and train temporary replacement workers to account for the lost workdays caused by injury and illness. According to a recent report from the Liberty Mutual Research Center for Safety and Health, more than one-third of workplace injuries and illnesses result in lost workdays.
Productivity increases also come from committing fewer mistakes. At the Ford Motor Company’s New Holland Plant, a strong safety and health program generated a 16 percent decrease in scrapped product. Many other companies have experienced similar benefits from adopting a risk-reduction strategy. A manager of a small plant that participates in VPP found that implementing a single work practice resulted in more output and fewer faulty products, saving $265,000 in just one year.
Ken Lungren of DACO, Inc., a family-owned and -operated company near Chicago that produces components for construction vehicles, echoes those findings: "We can’t make a quality product with an unsafe process."
Michael Porter of the Harvard Business School has advanced the idea that these savings are typical for companies focusing on safety and health because attention to production detail leads to improved product design, innovation, and higher morale, which in turn can reduce production costs.
Companies that produce quality products and provide good services in a healthful manner develop positive corporate reputations. This good standing can quickly be diminished through just one unfortunate incident. Companies with poor safety and health records can be isolated, boycotted, or forced to pay higher salaries to attract employees and higher premiums to conduct business. Those that introduce strong health and safety programs, however, find themselves viewed positively by current and prospective employees and their communities.
Adding Value to the Workplace
In a National Federation of Independent Business survey, employers ranked the cost of workers’ compensation, profitability, and federal and state safety rules among their top four reasons for implementing safety and health programs. Those interviewed also expressed concern for the well-being of their workers and the state of the working environment. The survey placed "right thing to do" and "too many accidents" in the top-five reasons for adopting safety and health precautions.
Survey participants’ answers show that they recognize the workplace—the physical location where work is performed, the environment it is performed in, and the dynamic between employees and employers—as an important factor in the assessment of value as it relates to safety and health.
Safe, satisfied, productive employees are more likely to stay in their jobs and generate better work. This decreases costs associated with training and production, and increases the value of the business and improves the environment in which it operates.
Numerous studies show that organizations with people-oriented cultures, proactive return-to-work programs, and active safety leadership efforts have higher return-to-work rates than workplaces without these programs. Timely intervention and good communication between employees and managers also speed up employees’ return to work following an injury or illness. Quicker return rates generally increase productivity because companies can invest in retaining employees instead of training new ones.
On the other hand, when workers are injured on the job, they may have to take time off to recuperate, reduce their work hours, look for a new job, or leave the labor force entirely. A 1998 study by the Connecticut Upper-Extremity Surveillance Project showed that more than one-third of workers who returned to their jobs after a common occupational injury had to decrease their work pace and workload due to their disabilities.
Many report decreases in their work quality, motivation to work, job satisfaction, and the ability to handle job responsibility. These employees also may experience feelings of stigmatization for reporting their injuries or difficulty in legitimizing their conditions. According to the Texas Research and Oversight Council, these and other factors contribute to workers being more likely to change jobs after occupational injuries.
"The bottom line," said Henshaw, "is that safe workplaces make for better workplaces where employees are committed to working well and working hard for the benefit of the entire company." Vigorous attention to workplace safety and health can dramatically increase morale, performance, and productivity. OSHA has set a goal of reducing the rate of lost production by 2 percent a year, a feat that would have a significant benefit for the U.S. economy and American consumers.
Adding Value to Life
Many employees view work as a way to preserve and promote the quality and sanctity of their lives and those of their family members. Workplace injury and illness can have a critical impact on the employee’s quality of life—affecting personal income, mental health, and family well-being. The opposite is true for safe and healthful workplaces. Safe workplaces preserve life and promote successful, vibrant lives.
Workplace injuries can have a serious impact on workers’ income and create severe financial hardship. On average, disabled workers earn 46 percent less than non-disabled workers. Those who receive a partial disability due to a workplace injury lose about 40 percent of their income over five years. Researchers estimate the cost of lost earnings at $8,000 per injury over a 10-year period, with women losing a greater percentage of their earnings than men.
These losses often force workers to dip into savings or borrow money as they struggle to pay their bills. They are also more likely to move, lose their home or car, and lose their health insurance.
Workplace injuries and illnesses typically reduce the overall earnings of households and may force other household members to leave the labor force to care for a disabled family member, or to work more hours to regain the lost income. A Rand Institute study estimated the cost of home care of injured family members by other household members—which amounted to 6.2 million workdays a year—at $162 million.
Serious mental health consequences can result, particularly for workers who are out of work for a year or more following an injury. Some people who have suffered a workplace injury or illness experience a heightened sense of vulnerability, sadness, anger, humiliation, and stress.
This stress can cause additional injury and illness, compounding the initial problem. According to the National Institute for Occupational Safety and Health, occupational stress can cause emotional, physiological, and behavioral problems such as mood and sleep disturbances as well as strained relationships with family and friends. Workers suffering from certain occupational disorders and disabilities are more likely to have raised levels of stress at home, increased family conflict, and higher divorce rates. They are also more susceptible to chronic health issues such as cardiovascular disease, musculoskeletal disorders, and psychological disorders.
These factors significantly affect employers as well. Since health-care expenditures are nearly 50 percent higher for workers who report high stress levels, addressing the problem can also significantly reduce employer expenditures.
Overall, reducing injury and illness in the workplace promotes emotional, physiological, and behavioral health—substantive benefits for employees. It is also good business. As Dan Fergus of Genessee Stampings said, "It makes sense to run an effective safety and health program because your people deserve it, your customers demand it, and your business practices and future won’t be there without it."
Working Together to Add Value
Safety and health add significant value. To your business. To your workplace. To your life. The benefits extend to employees and employers, businesses and communities, government and private industry alike. Safety and health management systems significantly reduce both the extent and severity of work-related injuries and illnesses. They also empower employers and employees alike to focus on growing a successful business while enjoying healthy and fulfilling lives.
OSHA is committed to improving the health and safety of American workers. By collaborating with stakeholder groups, using enforcement tools as needed, expanding outreach and education, and fostering partnerships and alliances, the agency can continue to dramatically decrease injuries, illnesses, and fatalities in the workplace. Fulfilling its mission of fostering the value of safety and health, OSHA will continue to save lives, prevent injuries, and protect the health of America’s workers. JSHQ
Lutz works in the OSHA Office of Public Affairs, Washington, D.C.