Study Finds Established Companies Don’t Benefit From Investing In Worker Safety

F.J. Thomas

Corvallis, OR (WorkersCompensation.com) – While conventional wisdom in today’s workplace states that an unsafe work environment costs employers money and can potentially put them out of business, a new international study is challenging that idea.

According to 2018 statistics from the National Safety Council, work injuries cost employers $170.8 billion dollars. The total averaged out to over a million dollars per death, $1,000 per worker, and $41,000 per injury that required medical consultations. Additionally, a total of 103,000,000 days of productivity were lost due to job injuries, resulting in negative impact on employer’s bottom line. OSHA estimates that employers pay out $1 billion per week for workers compensation coverage. However, according to the same statistics, for every $1 invested in a safety program, the return is $4 to $6 in reducing overall costs.

A collaborative study between researchers from Oregon State University Public Health and Human Sciences, University College Dublin in Ireland, Ohio State University in Columbus, Ohio and Universitat Ramon Llull in Spain tests the data that supports a financial gain when employers implement safety programs. “The Tension Between Worker Safety and Organization Survival” was published in Management Science earlier this month.

The researchers analyzed over 100,000 businesses based in Oregon and reviewed short- and long- term survival over a course of 25 years. The benchmark for “survival” was whether or not a company continued operations. The researchers reviewed the claim history of each business as provided by the Oregon Department of Consumer Affairs. Claims were reviewed for severity of injury with consideration of time taken off from work, and length of disability.

The researchers found that employers with workers compensation claims survived up to 56 percent longer than those employers who filed no claims. The results were even stronger among larger companies who were well established with a solid history.

The study found that younger, smaller employers were more likely to be detrimentally affected by high claim costs than larger, more established companies. Because of the susceptibility, the smaller employers were more likely to invest in safety programs, however researchers believed they had less resources.

Large employers with over 100 employees were more likely to survive than those companies of the same size who never filed any claims. Researchers did not find the same results, however, in companies that were smaller in size and results were equal.

Researcher and associate professor Anthony Veltri from Oregon State University Public Health and Human Sciences believes the study refutes the belief that improving worker safety improves profits, stating, “Organizations that do not provide a safe workplace gain an economic advantage over those that do. The goal of improving the longevity of a business conflicts with the goal of protecting the workforce.”

The researchers suggest that future regulations need to be written and enforced to reward innovation that both improves worker safety and improves the business’s likelihood of survival.

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