Do less profitable construction companies have more injuries?
This investigated business performance measures and occupational injuries (OIs) in Swedish construction companies.
>13k companies between 2003 – 15 were investigated.
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Extracts:
· They observe that OIs “tend to rise during periods of economic growth and decrease during recessions”
· Single-year snapshots of data can mislead because “single point-in-time measurement of business performance is likely to misclassify some companies”, hence they used “group-based model trajectories”
· Their method “allows identification of companies that present similar patterns of business performance and OIs over time” instead of imposing arbitrary cut-offs
· The clearest effect was with labour efficiency, where “low labor-to-revenue ratio were associated with a high injury rate” with a pooled estimate of “1.43 (95% CI 1.22–1.64)”
· “companies following trajectories of low labor-to-revenue ratio presented a higher likelihood of belonging to the trajectory of high injury rates for all company sizes”
· And profitability was important where “low returns on equity were associated with high injury rate patterns across all company sizes, excluding small enterprises”
· They argue that “companies that performed economically poorer according to two business indicators -low returns on equity and low personnel costs- had higher likelihood of experiencing high injury rate trajectories”
· “Less profitable companies and companies that find themselves in constant financial distress over time, may not be able to afford investment in preventive measures or health and safety”
· They also identify an issue of biased reporting: “less profitable companies have a higher risk of under-reporting, leading to an underestimation of the impact of business performance on workplace injuries”
· For severity, “smaller companies present a higher share of severe injuries compared to larger companies” while larger companies are “more likely to have in-place work environment committees and better intervention strategies”
· Organisational structure was also found to be influential, where subcontracting chains are “often difficult to track”, making it hard to know “who has or should have primary responsibility for prevention”
· Overall they say that “construction companies with constant-lower business performance are associated with higher OIs rates”
Study link: https://doi.org/10.1016/j.ssci.2022.105772
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Ref: Kreshpaj, B., Bottai, M., Matilla-Santander, N., Axén, M., Orellana, C., Burström, B., … & Bodin, T. (2022). Business performance and occupational injuries trajectories in the construction sector in Sweden. Safety science, 152, 105772.
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