Focus
The business case for safety and health: Cost-benefit analyses of interventions in small and medium-sized enterprises
October 2014
Small and medium-sized enterprises (SMEs) are often referred to as the backbone of the European economy as they account for 67% of employment. However, at the same time they also account for 82% of occupational injuries. It is widely recognised that occupational safety and health (OSH) in SMEs involves a number of particular challenges:
- SMEs are subject to greater risks, as shown by the relevant statistics.
- Many OSH improvements are low-cost solutions, but sometimes SMEs have problems financing an OSH policy, owing to limitations on their access to capital and do not benefit from the effects of economies of scale.
- SMEs have problems implementing an OSH policy, owing to a variety of organisational features.
- Governments face difficulties in fostering effective OSH management in SMEs, mainly because there are so many SMEs and these businesses have limited resources.
Research has shown that once SMEs understand the relationship between OSH and productivity, they are then able to see the link between OSH and economic performance. The European Agency for Safety and Health at Work (EU-OSHA) has identified the need for further research and case studies on the business case for good OSH management, particularly with a focus on SMEs.
The aim of this report is to provide clear case studies that can act as ‘eye-openers’ for SMEs, raising awareness of the benefits of OSH at enterprise level and addressing the need to change the perception of OSH, so that it is viewed not as a cost factor but as a beneficial investment. The SME case studies can be found in Appendix II of this report and will be presented to enterprises and intermediary organisations at suitable events. This report is accompanied by an executive summary and a PowerPoint presentation in order to facilitate its dissemination by stakeholder organisations to their target groups. Furthermore, policy-makers should understand that costs at enterprise level are often shifted to the societal level, and that this is a strong argument for promoting OSH in SMEs through public programmes.
The economic aspect of OSH is usually examined at two levels: the macro level, which includes legislation and central incentives having the state as the key player, and the micro level, which focuses on individual enterprises. Although the role of the state is generally accepted as necessary to regulate working conditions, the economic benefits of good OSH could, at least to some extent, motivate OSH interventions initiated by enterprises. Furthermore, external economic incentives for enterprises to improve OSH can help to achieve a better use of central resources by allowing them to be focused on those aspects of OSH where prevention is not economically beneficial at enterprise level alone.
The business case was examined in order to better serve these aims. In the case of each intervention studied, all the costs and benefits were examined, regardless of whether they were purely OSH related or not, as in a business case such investments need to be assessed as a whole, from the enterprise’s point of view. This approach is the most appropriate for examining decisions that are taken at enterprise level, as the decision to initiate an intervention is taken on the basis of its overall impact on the enterprise, rather than on the basis of the improvement in OSH alone.
This study had two main strands: identifying case studies of OSH interventions in the existing literature and developing new case studies on OSH initiatives in European SMEs. Seven institutes from various European countries were involved. 91 existing case studies were identified, 19 of them from Europe. Their distribution by sector, type of OSH intervention and country is presented in Tables 1, 2 and 3.
The business case for safety and health: Cost-benefit analyses of
interventions in small and medium-sized enterprises
European Agency for Safety and Health at Work, 2014, 150 pages, ISSN:
1831-9351, ISBN: 978-92-9240-495-6, DOI: 10.2802/32988
There are many other examples of reports, results from research, guidance and advice available in OSH UPDATE + FIRE to help organisations – managers, directors, supervisors and workers and especially those teaching in colleges and universities to learn about the benefits and understand the relationship between OSH and productivity.
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