Risk prevention is at the heart of management activities by improving the health and safety of employees. Ever mindful of their performance, should these companies consider health and safety management as a source of costs or financial gain?
For every dollar invested in prevention, we can expect a return of $2.19 or $2.20.
Two recent studies highlight the positive impact of prevention on the financial performance of companies committed to taking concrete actions. As conclusions, they suggest that for every dollar invested in prevention, we can expect a return of $2.19 or $2.20. This performance is due mainly to the improvement of operational efficiency (productivity and quality), employee mobilization, strengthening of the corporate image as well as profit margin growth. Generally, it takes about 1.5 year for the costs to be covered by the gains.
Does prevention require a large budget and consequently is only accessible to big corporations? On the contrary, as per a study by the OPPBTP (French professional organization promoting prevention in the fields of construction and public works), the most profitable preventive actions are the least expensive, less than $6500. For example, the employee handbook and sponsorship of a new employee, training on tasks safety analysis and working at heights, safety meeting at the beginning of each work shift or on a weekly basis and changes in work methods. Small and medium-sized enterprises therefore have much to gain in including them in their prevention program. Even more as they take advantage of a return on investment that is higher than three.
These findings clearly show that every company has an interest in investing in prevention. Gains are quite substantial, excluding those related to the direct reduction of accident costs. Indeed, the driving force of prevention is ethical and occupational health and safety has a social value that should become part of the employment conditions. However, in times of economic turmoil, a financial demonstration can be used as a clear reminder.
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OHS Performance Director, SPI Health and Safety