Occupational Health and Safety

Occupational Health and Safety

Introduction

Occupational Health and Safety (OHS) is a term used to describe the laws and processes that help to protect employees from death, disease and injury while at work (Splash Toolbox, 2010). This topic is gaining importance in corporations as it can have a great impact on revenue in the form decreased absenteeism from injuries and the subsequent compensation. It has been targeted by many companies as an area for improvement. The traditional belief is that OHS creates more expenses for companies than savings, but recent studies recognize that OHS programs can have a positive impact on the profitability and long term growth of corporations. Buy-in from management and employees, as well as corporate culture, play an important role when implementing a successful OHS program. This paper will discuss how and why an OHS program can affect these areas positively and how to implement a successful OHS program.

Profitability and Long-Term Growth

OHS is strongly correlated to profitability through expenses. On the surface managers may only see the direct cost of accidents, such as increased worker’s compensation costs. However, the indirect cost of workplace accidents is much higher. A recent statistic from the Workers Compensation Board of Canada shows for every dollar spent on direct costs of a workplace accident, four to eleven dollars are spent in indirect costs (Cowan, 2010). An older Australian study shows a ratio of $1:$6-$53 for direct to indirect costs such as production downtime (Nelson, 1994). Other indirect costs from workplace accidents include facility repair, environmental cleanup, and a poor safety record.

A poor safety record may negatively affect a corporation greatly. For example, a company may be eliminated in the bid process with a poor safety record, even if it offers higher quality goods and services for a substantially lower price than its competitors. As a result, a company’s social license to operate...