- Safety and Health Topics
- Business Case for Safety and Health
Business Case for Safety and Health
Workplace fatalities, injuries, and illnesses cost the country billions of dollars every year. In its 2018 Workplace Safety Index, Liberty Mutual estimated that employers paid more than $1 billion per week for direct workers' compensation costs for disabling, non-fatal workplace injuries in 2015. 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.
- A 2012 study concluded that inspections conducted by California's Division of Occupational Safety and Health (Cal/OSHA) reduce injuries with no job loss. The study showed a 9.4% drop in injury claims and a 26% average savings on workers' compensation costs in the four years after a Cal/OSHA inspection compared to a similar set of uninspected workplaces. On average, inspected firms saved an estimated $355,000 in injury claims and compensation paid for lost work over that period. There was no evidence that these improvements came at the expense of employment, sales, credit rating, or firm survival.
Source: David Levine, Michael Toffel, and Michael Johnson, "Randomized Government Safety Inspections Reduce Worker Injuries with No Detectable Job Loss." Science, Vol. 336, No. 6083, pp. 907-911 (May 18, 2012). See Abstract and Press Release.
- 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." Milbank Quarterly, Vol. 89, Issue 4, p. 728 (Dec. 2011).
- According to the 2018 Liberty Mutual Workplace Safety Index, serious non-fatal workplace injuries amounted to nearly $60 billion in direct U.S. workers' compensation costs in 2015. This translates into more than a billion dollars a week spent by U.S. businesses on these injuries.
Source: 2018 Liberty Mutual Workplace Safety Index. Liberty Mutual Insurance Company, (2018).
- Workplace safety was among the top criteria employees consider when evaluating a new job offer from a small business, according to a survey from an insurance company.
- 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. Goldman Sachs JBWere Group, (October 2007). See Press Release.
- 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), (June 2002).
- 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, (February 2007).
- 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, (January 2005).
- 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, (February 2007).
The following resources provide background on the costs of workplace injuries and illnesses and how employers can estimate these costs at their workplaces.
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.
The following resources on the business case for safety and health are broken out by industry and safety and health topic.
Design for Safety
The following resources address how accounting for employee safety in the design stage of a project may result in fewer injuries and illnesses and increased productivity.
The following is additional information on the business case for safety and health from OSHA, other federal and state agencies, other organizations, and other countries.
Workers have the right to:
- Working conditions that do not pose a risk of serious harm.
- Receive information and training (in a language and vocabulary the worker understands) about workplace hazards, methods to prevent them, and the OSHA standards that apply to their workplace.
- Review records of work-related injuries and illnesses.
- File a complaint asking OSHA to inspect their workplace if they believe there is a serious hazard or that their employer is not following OSHA's rules. OSHA will keep all identities confidential.
- Exercise their rights under the law without retaliation, including reporting an injury or raising health and safety concerns with their employer or OSHA. If a worker has been retaliated against for using their rights, they must file a complaint with OSHA as soon as possible, but no later than 30 days.
For additional information, see OSHA's Workers page.
How to Contact OSHA
Under the Occupational Safety and Health Act of 1970, employers are responsible for providing safe and healthful workplaces for their employees. OSHA's role is to ensure these conditions for America's working men and women by setting and enforcing standards, and providing training, education and assistance. For more information, visit www.osha.gov or call OSHA at 1-800-321-OSHA (6742), TTY 1-877-889-5627.