SafetyInsights.org

Is good safety good business? According to data from >500 Spanish construction sites – not so much.

A study to be posted evaluated the relationship between economic performance and a composite risk indicator comprised of incidents and 10 site risk variables.

Overall, they found a quadratic relationship between safety investment and economic performance.

That is:

·        “When the number of accidents is relatively low, increments in accident rates will be associated with increments in [return on investment]”, such that allowing unsafety/accidents is more profitable than investing in prevention

·        However, this relationship changes at a tipping point of high accidents, where the direction becomes negative; resulting in decreases in profitability

In all, “there seems to be an optimal number of accidents, from a purely private economic point of view, which would differ from the optimal social objective of reducing or even eliminating accidents on constructions sites”.

Their data indicates that “the associated costs for accidents are not enough to affect negatively the profitability of the companies”, and that companies in the construction sector “. This can be ”might be able to bear most accident costs during long periods”.

Thus, it may be “economically profitable maintaining high accident rates, especially in context of increasing production and consequently profits, which implies a clear conflict of interest from a social perspective”.

Then they argue the importance of social and ethical logics for investing in safety rather than just economic.

Although this may not be a trade-off most large, mature organisations face – it may be a day-to-day challenge for small to medium businesses with less resources.

So in all, good safety isn’t necessarily good economic business until the accident rate hits a high tipping point. But, of course, there’s other non-financial costs.

Authors: Forteza, F. J., Carretero-Gomez, J. M., & Sese, A. (2017). Safety science, 94, 61-76.

Study link: http://dx.doi.org/10.1016/j.ssci.2017.01.003

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