Good health and safety is good for business; everybody says so. Is it though? How do we know? There is precious little evidence, except anecdotally.
It’s easy to make the moral argument that businesses should not chase profit at the expense of the safety or health of their employees. And it’s an argument that has gained traction in recent years and generated inconvenient questions of some companies from their institutional shareholders. It’s also partly responsible for a whole industry of supply-chain checkers, verifying that contracted businesses are not offering low prices on the back of poor safety and environmental practices.
But the argument that good health and safety practice boosts profits or generates a strong return on investment is harder to back up. Pointing to market-leading corporations with strong health and safety standards and low ill health and injury rates proves nothing. Correlation is not causation; those organisations may be – probably are – doing a lot of other things well to stay at the top.
It is hard to find control studies too. If there are organisations whose executives have consciously decided to save money by doing no more than the law says they must, they wouldn’t be foolish enough to admit it, because that’s not a good look.
The social security body ISSA – which represents the national agencies managing state-funded accident compensation in 160 countries – funded a study that found that the return on investment in corporate health and safety spending was 2.2 euros for every 1 euro spent. It’s a positive finding of course, but the research was published in 2011 and covered 300 companies and if I had a euro for every time I have seen it cited I would have a healthy second income.
Even the evidence for the value of specific interventions is patchy. The health and wellbeing lead at one of the UK government’s biggest departments once said that she had done her own review of evidence for the usefulness of various wellbeing interventions and had decided that there was not reliable evidence to suggest employee health checks, flu vaccinations or mindfulness exercises were good investments to offer the department’s 40,000-plus employees. She gave the impression that it had been hard to find reliable evidence for any health or wellbeing programme.
That’s not surprising. The benefits of safety interventions are hard to measure. Beyond the reduced cost of accidents, there are factors that are difficult to isolate from other influences: increased effort and productivity, lower staff turnover. Still, there have even been studies assessing the effect of employee satisfaction on company performance, so the payback of corporate safety and health programmes must reckonable.
The small research base at present leaves a real data gap. If health and safety professionals are asking for funding for programmes to go beyond whatever is strictly necessary to keep their organisations compliant, they will be competing with other business functions for finite resources. Those competitors might well be putting forward business cases with forecasts of return on investment. There are so many smart OSH professionals out there who want to prove themselves as business enablers, they deserve better ammunition to back up their arguments.
Luckily, some help is at hand. The Lloyds Register Foundation (LRF), a non-profit body supporting research to reduce risk has begun a programme to gather evidence on efficacy of OSH interventions. The LRF has already funded a baseline study highlighting, among other things, the lack of data for efficacy of OSH investment and is now moving on to provide tools to assess the return on investment for individual safety programmes. It is even proposing to investigate whether focusing on leading indicators – OSH inputs such as training effort and senior management engagement – generates better results than the traditional concentration on managing down incident rates. That’s an exciting prospect, as so many major businesses are putting their eggs in the leading indicator basket without a strong research base to back up their faith.
Personally, I believe investing in safety is almost never a bad thing, as long as the money is channelled according the magnitude of the risks employees face. I believe there are real benefits for employers. But I can’t prove it. Safety and health professionals will be in a better place when that changes.
Guest blog written by writer, editor and speaker, Louis Wustemann.