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What Does Safety Cost?

The U.S. holds a special place in the current international safety and health landscape. Each state is provided with a high degree of autonomy, which leads costs and fees to differ depending on where a company is based.

An Overview of Occupational Health and Safety in the United States

Although the national Occupational Safety and Health Administration develops regulations and a general safety program, states can opt to enforce their own programs. Consequently, 25 states are currently running under independent requirements, of which some, like California or Michigan, are exceeding the OSHA program in terms of demands and strict controls.

While the American system allows for greater tailoring to specific needs and local challenges, it also gives room to many contrasting directions that can be difficult to supervise. Naturally, in this highly dynamic system, politics will influence safety and health trends massively, resulting in sometimes quickly shifting directions when a new administration is elected.

Measuring changes in health and safety

Since efforts to push health and safety differ quite drastically from state to state, measuring results and trends on a country-wide level becomes very difficult. However, the OSHA publishes new statistics annually, which give an insight into the current state of occupational health and safety in the U.S. Recent findings show that most frequently-cited violations in 2017 include fall protection, followed by hazard communication standard and scaffolding – all within the construction industry. Although the number of workplace accidents and fatalities has come down drastically in the last decades, 14 workers still died daily from workplace accidents in 2016 (compared to 38 in 1970).

In order to decrease the number of victims further, the OSHA is implementing new laws, tightening regulations and encourages states with their own health and safety programs to do the same. In 2016, violation fines rose from $7,000 to $12,934 for a willful breach and from $70,000 to $129,340 for a severe breach.

The true cost of non-compliance

Considering how many businesses will face charges for more than just one breach when violations are found during an inspection, the total cost of non-compliance can easily reach uncomfortable numbers. In the worst-case scenario – an injury or even fatality of an employee – the true damage can be far worse than initial violation fines.

The Center for Disease Control and Prevention estimates the average cost of an occupational fatality to be about $990,000. This figure includes expected hospital costs and medical expenses, worker’s compensation and civil litigation costs – all of which the business owner will be liable for. Not included are losses from workplace disruptions, increased insurance premiums, worker replacement, training, attorney fees and loss of productivity. Thus, the actual cost of one death will lie somewhere between $1.4 and $3 million on average.

Looking at these numbers, it is not surprising that many businesses can instantly slide into bankruptcy when a safety officer discovers insufficient (or non-existing) safety precautions.

The true benefits of compliance

Health and safety consultancies estimate the annual cost of health and safety for a small to medium size business to be about $53,000 on average. That makes the cost of compliance potentially less than half the cost of a single violation charge. Not every company might have the resources to spend tens-of-thousands of dollars a year on compliance. But the price of safety should not be thought of as just an inconvenience; on the contrary, an effective program will increase business value and return between $2 and $6 for every $1 invested in injury prevention. Increased productivity, morale and, as a result, profits, make safety and health worthwhile no matter the company size. Yet, 25 percent of micro-business employees and 17 percent of small business employees report never having received workplace safety training.

Improving safety culture

It seems like many employers still don’t value safety as part of their business strategy. Quick returns with little investment are preferred over longevity and sustainability of the firm. A high turn-over-rate, low wages and zero investment in improving working conditions look attractive to business owners that just want to take without having to give back. From an ethical point of view, this approach is questionable at least. When the staff’s well-being is pushed far down the priority list, the work environment will surely not radiate a vigorous and gratifying atmosphere. No worker will pour their heart and energy into work they feel they are not being valued for.

With a safe, happy workplace come constructive relationships among staff, managers and bosses; high-quality results; and long-term, fruitful collaborations. Especially as violations are becoming less economically worthwhile, leaders need to shift their mindset towards a better future for occupational safety and health.

By Katharina Busch

Katharina is currently based in London. She regularly writes about topics such as energy, environment and travel, as well as health and safety, on behalf of Arinite. Learn more at  https://www.arinite.co.uk/

Source: https://www.constructionexec.com/article/what-does-safety-cost


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