Business Case for Safety and Health
Overview
Workplace fatalities, injuries, and illnesses cost the country billions of dollars every year. In its 2021 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 2018. The National Safety Council estimated that work-related deaths and injuries cost the nation, employers, and individuals $171 billion in 2019. Employers that implement effective safety and health programs 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 2021 Liberty Mutual Workplace Safety Index, serious non-fatal workplace injuries amounted to nearly $59 billion in direct U.S. workers' compensation costs in 2018. This translates into more than a billion dollars a week spent by U.S. businesses on these injuries.
Source: 2021 Liberty Mutual Workplace Safety Index. Liberty Mutual Insurance Company, (2021).
- 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.
Source: Workplace Safety Can Give Small Business Owners a Recruiting Edge, EMPLOYER Survey Finds (Sep. 2017).
- 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).
Costs
The following resources provide background on the costs of workplace injuries and illnesses and how employers can estimate these costs at their workplaces.
Benefits
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.
Resources
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.
Additional Resources
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.
Now that you know that investing in workplace safety and health may improve your company's productivity and bottom line, here are some resources that may help you improve your organization's workplace safety and health and learn about OSHA's compliance assistance resources.
- OSHA's On-Site Consultation Program. Through this no-cost and confidential program, consultants from state agencies or universities work with small business employers to find and fix workplace hazards, give advice for complying with OSHA standards, and help establish and improve safety and health programs.
- Safety and Health Programs: 10 Ways to Get Your Program Started.
- Compliance Assistance QuickStarts. These step-by-step guides help employers identify major OSHA requirements and guidance materials that apply to their workplace.
- OSHA Publications, including:
- All about OSHA. Also available in Spanish and Vietnamese.
- Job Hazard Analysis.
- Small Business Safety and Health Handbook.
See also: Additional Resources.