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Donald Delikat of the Department of Labor Standards OSHA Consultation Program recently spoke at UMass Boston’s College of Management, making the business case for workplace safety and health programs.  In his literature research, Mr. Delikat has found evidence of the return on investment for safety and health programs.

In a randomized study, inspections by CAL/OSHA led to a reduction in injury claims of 9.4%, which saved those companies 26% on their worker’s compensation costs over the four years after the inspection.  That yielded an average savings of $355,000 (2011 dollars). Perhaps most importantly, the study also looked at employment, sales, credit ratings, and firm survival and found that there was no evidence the improvements had a negative impact on any of these areas.[1]

In a separate study, where researchers at Liberty Mutual interviewed financial decision makers, it was estimated that each dollar spent on improving workplace safety and health would result in a return of $4.41. [2]money

Mr. Delikat also spoke about ways to integrate safety and health programs into operations.  This includes use of a balanced score card and the triple bottom line.

The balanced score card is a way to track conditions and improvements by developing gauges or metrics for safety and health.  For instance, a healthcare facility could add the number of needle sticks to their scorecard and then focus improvements on reducing the incident rate.

Mr. Delikat explained the concept of triple bottom line accounting developed by John Henshaw, former Assistant Secretary for OSHA from 2001-2005,  and Andy Savitz, author and expert on corporate social responsibility and sustainability.  Most companies only track credits and debits, but miss hidden costs, such as OHSA fines, increased worker’s compensation premiums, low morale, high turnover, poor public relations, and high rate of repair or replacement of damaged equipment.  When accounting for these costs the value of safety and health programs becomes even more evident.  The triple bottom line is a way to assess credits, debits and hidden costs.

Mr. Delikat has been performing OSHA safety and health consultation visits for over 15 years.  The OSHA Consultation Program offers free safety and health inspections to small, high risk employers.  The OSHA Consultation Program is operated by the Commonwealth’s Department of Labor Standards through a grant from federal OSHA.  For more information please visit our website by clicking HERE.

[1] Levine et al. “Randomized Government Safety Inspections Reduce Worker Injuries with No Detectable Job Loss.” May 18, 2012 in Science 336((6083):907-911)

[2] Huang, et al. “Financial Decision Maker’s Views on Safety.” April 2009 in Professional Safety 36-42 (published by ASSE)

Written By:

Manager of Safety/Health, Department of Labor Standards

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