ArticlePDF Available

Financial Decision Makers' Views On Safety What SH&E Professionals Should Know

Authors:

Abstract and Figures

IN 2006, A TOTAL OF 5,840 FATAL occupational injuries occurred in private industry in the U.S. (BLS, 2008). In addition, 4.1 million nonfatal workplace injuries and illnesses were reported, which means that 4.4 nonfatal occupational injuries or illnesses were reported for every 100 full-time-equivalent workers in the U.S. Rosenman, Kalush, Reilly, et al. (2006) have suggested that these statistics are a cause for employer concern, especially in light of a recent study which indicated that the BLS's system for recording work-related injuries and illnesses under-counts the total number of injuries associated with chronic or acute conditions. Most SH&E professionals are very much aware of these statistics and endeavor to reduce the numbers of occupational fatalities, injuries and illnesses. Often, however, there are limits as to what SH&E professionals can do to positively impact occupa-tional safety. For example, practitioners may not be in a position to ultimately determine what and how company resources are allocated to safety interven-tions. They may often have to find ways to convince higher-level managers—who set priorities and control the budget—of the need to fund occupational safety efforts, and of the critical role their support can play in their com-pany's occupational safety. Research has supported the concept that a positive asso-ciation exists between top management support and im-proved workplace safety and health outcomes (Cohen, 1977; Griffiths, 1985; Marsh, Davies, Phillips, et al., 1998). Griffiths (1985) found that top manage-ment commitment to safety and health was associated with reduced lost-time injuries in the industrial gas industry. Sawacha, Naoum and Fong (1999) found that top manage-ments' attitudes toward safety played a significant role in safe-ty performance. Despite these findings, re-search to assess the safety pri-orities and safety concerns of top-level executives/managers (such as corporate financial Yueng-Hsiang Huang, Ph.D., is a senior research scientist at Liberty Mutual Research Institute for Safety (LMRIS) in Hopkinton, MA. She holds a Ph.D. in Industrial/Organizational Psychology from Portland State University. She is a member of the Society for Industrial and Organizational Psychology, American Psychological Association, Society for Occupational Health Psychology, the ASSE Foundation Research Committee and the editorial board of Accident Analysis and Prevention.
Content may be subject to copyright.
I
36 PROFESSIONAL SAFETY APRIL 2009 www.asse.org
Business of Safety
Business of Safety
Financial Decision
Makers Views
on Safety
What SH&E professionals should know
By Yueng-Hsiang Huang, Tom B. Leamon, Theodore K. Courtney, Sarah DeArmond,
Peter Y. Chen and Michael F. Blair
IN 2006, A TOTAL OF 5,840 FATAL occupational
injuries occurred in private industry in the U.S. (BLS,
2008). In addition, 4.1 million nonfatal workplace
injuries and illnesses were reported, which means
that 4.4 nonfatal occupational injuries or illnesses
were reported for every 100 full-time-equivalent
workers in the U.S. Rosenman, Kalush, Reilly, et al.
(2006) have suggested that these statistics are a cause
for employer concern, especially in light of a recent
study which indicated that the BLS’s system for
recording work-related injuries and illnesses under-
counts the total number of injuries associated with
chronic or acute conditions.
Most SH&E professionals are very much aware of
these statistics and endeavor to reduce the numbers
of occupational fatalities, injuries and illnesses.
Often, however, there are limits as to what SH&E
professionals can do to positively impact occupa-
tional safety. For example, practitioners may not be
in a position to ultimately determine what and how
company resources are allocated to safety interven-
tions. They may often have to find ways to convince
higher-level managers—who
set priorities and control the
budget—of the need to fund
occupational safety efforts,
and of the critical role their
support can play in their com-
pany’s occupational safety.
Research has supported
the concept that a positive asso-
ciation exists between top
management support and im-
proved workplace safety and
health outcomes (Cohen, 1977;
Griffiths, 1985; Marsh, Davies,
Phillips, et al., 1998). Griffiths
(1985) found that top manage-
ment commitment to safety and
health was associated with
reduced lost-time injuries in
the industrial gas industry.
Sawacha, Naoum and Fong
(1999) found that top manage-
ments’ attitudes toward safety
played a significant role in safe-
ty performance.
Despite these findings, re-
search to assess the safety pri-
orities and safety concerns of
top-level executives/managers
(such as corporate financial
Yueng-Hsiang Huang, Ph.D., is a senior research scientist at Liberty Mutual Research Institute for Safety
(LMRIS) in Hopkinton, MA. She holds a Ph.D. in Industrial/Organizational Psychology from Portland
State University. She is a member of the Society for Industrial and Organizational Psychology, American
Psychological Association, Society for Occupational Health Psychology, the ASSE Foundation
Research Committee and the editorial board of Accident Analysis and Prevention.
Tom B. Leamon, Ph.D., is an adjunct professor of occupational safety at Harvard University and has directed
major ergonomics and safety organizations in the glass, coal mining and insurance industries. He holds a Ph.D. in
Industrial Engineering from the Institute of Technology, Cranfield. Leamon has published widely and is a Fellow
of the Ergonomics Society, the Human Factors and Ergonomics Society and the Institute of Electrical Engineers.
Theodore K. Courtney, M.S., CSP, is director of the Center for Injury Epidemiology at LMRIS and an instructor
on injury, safety and ergonomics at the Harvard School of Public Health in Boston. Recipient of the 2003 William
Floyd Medal and the 2006 NORA Partnering Award for his work in occupational injury research, he holds a B.S.
in Human Factors from Georgia Tech and an M.S. in Industrial and Operations Engineering from the University
of Michigan. Courtney is a member of the editorial boards for Professional Safety and the Journal of
Environmental and Occupational Hygiene. He is a member of ASSE’s Greater Boston Chapter.
Sarah DeArmond, Ph.D., is an assistant professor of human resources management at the University of
Wisconsin, Oshkosh. She holds a Ph.D. in Industrial/Organizational Psychology from Colorado State University.
DeArmond was named the 2005 ASSE Foundation-Liberty Mutual Safety Research Fellow. She is a member of
the Society for Occupational Health Psychology, Society for Industrial and Organizational Psychology, Academy
of Management and American Psychological Association.
Peter Y. Chen, Ph.D., is a professor of psychology at Colorado State University and heads the occupational
health psychology training program in the Mountain and Plains Education and Research Center funded by
NIOSH. He holds a Ph.D. in Industrial/Organizational Psychology from the University of South Florida.
Michael F. Blair, M.M.S., is a technical consultant within the National Market Loss Prevention Department
at Liberty Mutual Insurance Group. During his career, he has led the Workplace Safety and Occupational
Disability Management group and conducted research at LMRIS. He holds an M.M.S. in Manufacturing
Engineering from the University of Massachusetts, Lowell, and a B.S. in Industrial Technology from the
University of Lowell. He is a member of the Human Factors and Ergonomics Society.
036_042_F2Huang_0409:Layout 1 3/11/2009 12:19 PM Page 36
www.asse.org APRIL 2009 PROFESSIONAL SAFETY 37
Topic 2: Perceived Financial Impact of Safety
Three questions were included to obtain insight
into the respondents’ perceptions of the financial
impact of occupational safety. These questions asked
about the ratio of direct costs (such as payments to
medical providers and the injured employees) ver-
sus indirect costs (such as lost productivity and
worker replacement costs) and what is the biggest
cause of indirect costs (Q4), the ratio of dollars spent
improving workplace safety versus dollars returned
(Q5) and the impact of workplace accidents on com-
pany financial performance (Q6).
Topic 3: Issues Regarding Safety Programs
Three open-ended questions were developed to
explore participants’ perceptions of issues related to
safety programs. These questions asked participants
what they perceived as the top benefitsof safety pro-
grams (Q7), the best single modification to improve
safety within their companies (Q8) and whether
they thought that safety engineers were necessary in
their companies (Q9).
Survey Results
Telephone surveys were conducted with 231 cor-
porate financial decision makers. This number rep-
resented about 20% of the total completed contacts.
The average survey lasted 12 minutes. Among the
respondents, 81% were male. In terms of job title,
49% were chief financial officers, 15% were con-
trollers, 10% were vice presidents and 8% were
directors of finance.
Using company information provided by the
respondent, each company’s major industry sector
was identified. In accordance with the 2002 NAICS
codes and titles, about 23% of the respondents were
in manufacturing, 13% were in healthcare and social
assistance, 10% were in the finance and insurance
industry, 8% were in construction and 8% were in
wholesale trade. Detailed demographic information
about the sample is shown in the sidebar on p. 38.
Topic 1: Perceived Leading Safety Priorities,
Concerns & Losses
The top safety priorities for future resource allo-
cation and efforts named by the corporate financial
decision makers in this sample were overexertion,
repetitive motion and bodily reaction injuries. Table
1 (p. 39) presents the ratings on safety priorities for
resource allocation for various injury causes.
When asked about the leading cause of workers’
compensation losses (Table 2, p. 40), the most com-
mon response was overexertion (34.4%), followed by
repetitive motion (13.5%) and bodily reaction
(11.6%).A few participants (2.3%) reported that they
had not had any losses/claims for some time.
For the single greatest workplace safety concern
for their company in the coming 12 months (Table 3,
p. 41), the most frequently reported were: 1) overex-
ertion (20.3%); 2) repetitive motion (14.6%); 3) high-
way accidents (12.7%); 4) falling on the same level
(9.9%); and 5) bodily reaction (5.7%).
decision makers) has been limited. For SH&E profes-
sionals, it can be anticipated that knowing something
about top management’s priorities and concerns
would help to improve communication with these
individuals.
This article is part of a larger study (DeArmond,
Huang & Chen, 2007; Huang, Leamon, Courtney, et
al., 2007) that attempted to address this issue by
exploring corporate financial decision makers’ per-
ceptions of safety issues. The purpose of this article
is to highlight results that identified corporate finan-
cial decision makers’ perceived leading safety prior-
ities, concerns and losses; their perceived financial
impact of safety; and issues regarding safety pro-
grams in order to help SH&E professionals commu-
nicate more effectively with decision makers. The
goal is to provide information that may help shape
communications between SH&E professionals and
financial managers.
The Survey
Participants & Procedure
This study focused on medium- to large-sized com-
panies (100 employees or more), anticipating that they
were more likely to have an individual dedicated to
corporate finance. Survey questions were developed
by the project team with additional contributionsfrom
research scientists, SH&E professionals and market
research professionals. A pilot study was conducted
with 11 financial decision makers to test the question-
naire and identify potential methods for increasing the
response rate (Huang, et al., 2007). The questions have
content validity as they were developed, verified and
tested by various subject-matter experts.
Nine core questions were formulated to assess
financial decision makers’ perceptions toward work-
place safety issues. A survey research/consulting
firm was hired to conduct the telephone interviews
using a computer-assisted telephone interviewing
lab. Experienced telephone interviewers contacted
the most senior executive or manager responsible for
making decisions about property and casualty risk
management or insurance-related services for their
organizations (e.g., CFO, director of finance).
Survey Topics
Topic 1: Perceived Leading Safety Priorities,
Concerns & Losses
Three questions were developed to explore finan-
cial decision makers’ perceptions of the leading safe-
ty priorities, concerns and losses. Participants were
asked about their companies’ safety priorities for
resource allocation for the upcoming year (Q1), lead-
ing cause of workers’ compensation losses (Q2) and
single greatest workplace safety concern (Q3).
The list of possible response options for a compa-
ny’s safety priorities (Q1) for the upcoming year
were generated using data from the 2005 Liberty
Mutual Workplace Safety Index (Liberty Mutual,
2007), which provides information about the most
costly occupational injury events on an annual basis,
and the event or exposure leading to injury or illness
categories used by BLS (2004).
Abstract: Top-level
managers determine
high-level budgets,
resource allocation and
corporate priorities
about safety-related
issues, yet little research
has been done regard-
ing what they consider
to be important. Often,
SH&E professionals must
try to convince decision
makers to support safety
programs without
knowing much about
the thought processes
behind their decisions.
This study involved a
survey that explored
how 231 senior financial
executives or managers
for U.S.-based compa-
nies with 100 or more
employees perceive
important workplace
safety issues. This article
highlights some results
of that study.
036_042_F2Huang_0409:Layout 1 3/11/2009 12:19 PM Page 37
38 PROFESSIONAL SAFETY APRIL 2009 www.asse.org
create a safer and cleaner environment, removal of
hazards and additional personnel present at all
times to monitor safety.
Twenty-seven percent of the respondents believed
safety engineers were needed in their organizations.
A greater percentage of respondents from the larger
companies saw a need for safety engineers—50% of
participants from companies with 1,000 employees
and more agreed, while 22.3% of those from compa-
nies with 100 to 999 employees agreed.
Discussion
Data on financial decision makers perceived lead-
ing safety priorities, concerns and losses for their
companies were collected in this study. Participants
reported areas of safety priorities for organizational
resources and efforts in the next 12 months that were
consistent with their responses on their companies’
past workers’ compensation losses.
The three most commonly named areas for both
were overexertion, repetitive motion and bodily
reaction. This may demonstrate that these decision
makers tend to allocate financial resources to areas
associated with what they understand to be sources
of major losses.
When the participants were asked to name their
single greatest workplace concern, after citing
overexertion and repetitive motion, highway acci-
dents and falling on the same level were mentioned
more often than bodily reaction. It may be under-
standable that these financial executives are con-
cerned about highway accidents yet do not consider
them a top priority for resources because many fac-
tors that affect highway safety are not directly con-
trollable by their company.
It is curious that falling on the same level ranked
higher in the question about their single greatest
concern than it did in their top priorities for future
resources. Perhaps these respondents recognize this
as a great concern yet might not understand the
actual losses from falls. According to the Liberty
Mutual (2007) Workplace Safety Index, falls on the
same level was the second-leading cause of work-
place injury in 2005, the same year the survey data
Topic 2: Perceived Financial Impact of Safety
The average estimated ratio of direct costs to indi-
rect costs associated with occupational injuries was
$2.12 with a standard deviation (SD) of 1.9. This
means that for every dollar spent on direct costs,
participants believed about $2.12 would be spent on
indirect costs. The median ratio was $2:$1 (Figure 1,
p. 42). The biggest causes of indirect costs partici-
pants mentioned were: 1) workplace disruption,
downtime, loss of productivity (41.4%); 2) worker
replacement, training new employees (23.2%); and
3) workers’ compensation, increased insurance pre-
miums, attorney fees (16.7%).
Participants perceived that, on average, for every
dollar spent improving workplace safety, about
$4.41 (SD = 12.0) would be returned. The median
was $2 (Figure 2, p. 42). For the question, “How
would you characterize the impact of workplace
accidents on your company’s financial performance,
using a scale of: 1 = below average impact, 2 = aver-
age impact; 3 = above average impact; 4 = well
above average impact; 5 = one of the highest
impact?”, 43% of the respondents reported below
average impact and 57% reported average and
above (a score of 2 to 5).Among all participants, only
10.8% reported that workplace accidents have well
above average or one of the highest impacts on their
company compared to other factors.
Topic 3: Issues Regarding Safety Programs
The top benefits of an effective workplace safety
program were perceived to be: 1) increased produc-
tivity (42.5%); 2) reduced costs (28.3%); 3) greater
retention of employees (7.1%); and 4) better employ-
ee/company morale and greater job satisfaction
among employees (5.8%).
The most preferred occupational safety interven-
tion reported by participants centered around intro-
ducing more/better safety-focused training and
programs (26.6%). No other intervention reported
was named by more than 8% of the respondents.
Among these interventions, in descending order,
were safer/better/updated equipment and work-
space, more safety management, more enforcement
of policies and procedures, improvements made to
Descriptive Information of Respondents & Their Companies
Job Title
Job Title
49.1% Chief financial officer
15.2% Controller
9.6% Vice president
8.3% Director of finance
3.5% Chief operating officer
3.0% Risk manager
11.4% Other (e.g., treasurer, finance manager)
Industry Type
23.4% Manufacturing
12.6% Healthcare and social assistance
9.5% Finance and insurance
7.8% Construction
7.8% Wholesale trade
7.4% Educational services
6.9% Retail trade
5.2% Hospitality
19.4% Other (4.3% or less each)
Number of Employees
43.7% 100 to 245 employees
25.5% 250 to 499 employees
13.4% 500 to 999 employees
4.8% 1,000 to 1,999 employees
12.6% 2,000 or more employees
Approximate Annual Revenue
10.4% Less than $10 million
19.7% $10 to $24.9 million
37.3% $25 to $74.9 million
15.5% $75 to $199.9 million
10.9% $200 to $499.9 million
3.1% $500 to $999.9 million
3.1% $1 billion or more
Gender
81.4% Male
18.6% Female
036_042_F2Huang_0409:Layout 1 3/11/2009 12:19 PM Page 38
www.asse.org APRIL 2009 PROFESSIONAL SAFETY 39
itive impact on a company’s financial perform-
ance. Of these executives, 61% believed that their
companies received a return on investment of $3 or
more for each $1 they invested in workplace safety.
ASSE (2002) has concluded that a direct, positive
correlation exists between investment in SH&E and
its subsequent return on investment. OSHA (2007)
asserts from its own evidence that companies imple-
menting effective safety and health programs can
reduce injury and illness rates by 20% or more—and
generate a return of $4 to $6 for every $1 invested.
OSHAreported that employers investing in work-
place safety and health can expect to reduce fatalities,
injuries and illnesses. This will result in cost savings
in various areas, such as lowering workers’ compen-
sation costs and medical expenses, avoiding OSHA
penalties, and reducing costs to train replacement
employees and conduct accident investigations. In
addition, employers often find that changes made to
improve workplace safety and health can produce
significant improvements in their organization’s pro-
ductivity and financial performance.
The information from the current study presents
a good starting point for SH&E professionals to
approach their company financial decision makers to
find out how they perceive company safety costs and
priorities. After identifying their company’s actual
direct and indirect injury costs, the returns on safety
investment and the impact of workplace accidents on
the company’s financial performance, SH&E profes-
sionals can compare the actual figures with their
managers’ perceptions and see how those compare
with the survey data. Practitioners can then deter-
were collected. Knowing this, SH&E professionals
can explore whether their own financial executives
perceptions on losses and concerns coincide with
data from other sources (e.g., OSHA/OSHA record-
ables, workers’ compensation data, medical records,
company safety records). Are their financial man-
agers’ perceptions consistent with company reality?
The results of this study demonstrate that the par-
ticipants recognized that there are indirect costs in
addition to the direct costs associated with occupa-
tional injuries and that these costs can be substan-
tially larger than the direct costs. Further, it is clear
that the participants believed that the money spent
improving workplace safety would have significant
returns. The average perceived return on safety
investments was $4.41 (SD = 12.0). This might sug-
gest that corporate financial decision makers might
encourage or be receptive to safety improvement
interventions. Conversely, it is possible that it could
suggest that these decision makers have an expecta-
tion of return on investment if they choose to direct
resources toward a given issue. Nonetheless, the
majority thought that workplace accidents had only
an average impact on company financial perform-
ance compared to other factors.
Although research in this area is very limited, the
findings of the current study are similar to those
found in other sources. For example, in terms of
management views on investment in workplace
safety and health, one survey project (Liberty
Mutual, 2001), which collected data from American
business executives, reported that 95% of business
executives believed that workplace safety has a pos-
Top Safety Priorities for Resource Allocation
Ranking of priorities for resource allocation NM SD
1) Overexertion from lifting, pushing, pulling, holding, carrying or 227 3.31 1.29
throwing an object
2) Repetitive motion (e.g., injuries due to repeated stress or strain) 228 3.18 1.16
3) Bodily reaction (e.g., injuries due to bending, climbing, slipping or 229 3.16 1.23
tripping without falling)
4) Exposure to harmful substances or environment 223 2.63 1.46
5) Falling on the same level 228 2.62 1.31
6) Highway accidents 218 2.37 1.44
7) Being caught in or compressed by equipment or objects 217 2.34 1.42
8) Being struck by an object (e.g., a tool falling on a worker from above) 224 2.27 1.38
9) Workplace violence 227 2.26 1.30
10) Falling from heights 223 2.22 1.26
11) Striking against an object (e.g., employee walking into a door frame) 229 2.20 1.19
12) Contact with high/low temperature 214 1.94 1.17
Note. Number of respondents answering out of 231 participants (N), means (M) and standard deviation (SD) of 5-point
Likert scale responses to Q1 regarding the top safety priorities for resource allocation. Respondents were asked to rate their
choices with a scale ranging from 1 as below average to 5 as one of the highest.
Table 1
Table 1
These results
give SH&E
professionals
a good starting
point from
which to
approach
financial
decision
makers to find
out how they
perceive safety
costs and
priorities.
036_042_F2Huang_0409:Layout 1 3/11/2009 12:19 PM Page 39
40 PROFESSIONAL SAFETY APRIL 2009 www.asse.org
nize the importance
of safety training
and programs, it is
also important that
they understand the
importance of other
safety interventions.
Research has shown
the limited effective-
ness of education
and safety interven-
tions to increase
awareness in reduc-
ing various inci-
dences of unsafe
behavior (Connelly,
Conaglen, Parson-
son, et al., 1998).
In addition,
Amick, Robertson,
DeRango, et al.
(2003) found that
training alone did
not reduce muscu-
loskeletal symptoms
among office work-
ers, but average pain
levels were reduced
when training was provided in conjunction with sup-
plying adjustable office furniture and equipment.
Training works better when coupled with a well-
designed workplace and a high level of manage-
ment commitment. Training is only one of several
important organizational responses to safety con-
cerns. Examples of others are good housekeeping,
active safety auditing, active participation of work-
ers in safety programs and decision making, and the
application of engineering safety controls (Hunt &
Habeck, 1993; Shannon, Walters, Lewchuck, et al.,
1996; Shannon, Mayr & Haines, 1997). SH&E profes-
sionals need to explore whether their financial deci-
sion makers recognize the importance of these other
factors documented in the literature and identify
ways to bring these factors to their attention.
Results showed that about one-quarter of the
financial decision makers surveyed recognized the
need for safety engineers. It was also found that
decision makers from larger companies were more
likely to identify this need. The application of engi-
neering safety controls is recognized within the
SH&E profession as fundamental to ensuring occu-
pational safety. Therefore, it is important for SH&E
professionals to ensure that their financial managers
are fully informed about the importance of safety
engineers’ roles within an organization.
Overall, the findings of this study showed that
the financial decision makers of U.S. companies sur-
veyed recognized the importance of occupational
safety and the need for and benefits of occupational
safety interventions. While their reported percep-
tions of safety may not necessarily be the same as
those of the SH&E professional’s own company,
mine whether these areas are consistent
or whether discrepancies exist that need to
be addressed.
Since financial decision makers usually
focus on the financial impact of decisions,
providing actual financial evidence of the
impact of safety investment for their com-
panies can aid SH&E professionals in their
efforts to find ways to improve top-level
managers’ perceptions of the importance
of workplace safety. It has been shown that
safety professionals need to understand an
organization’s financial losses in order to
help senior management understand the
financial benefit the safety department
provides (Behm, Veltri & Kleinsorge, 2004;
LaBelle, 2000). To work more effectively
with other financial and operations man-
agement personnel, SH&E professionals
would benefit from becoming more famil-
iar with the common language of business
(Adams, 2002).
In terms of the best safety interventions,
the modification respondents mentioned
most often was to have more/better safety-focused
training. Corporate financial decision makers might
believe that training-related changes in workers
would have the greatest impact on safety or they
may think that safety training is less costly—and,
therefore, better—than other modifications. This may
also indicate that financial decision makers would
more readily support intervention proposals related
to safety training.
While it is good that these decision makers recog-
Responses Regarding Top Cause of WC Losses
Rank Frequency Percent Valid percent
1) Overexertion 74 32.0 34.4
2) Repetitive motion 29 12.6 13.5
3) Bodily reaction 25 10.8 11.6
4) Falling on the same level 19 8.2 8.8
5) Highway accidents 11 4.8 5.1
6) Falling from heights 6 2.6 2.8
7) Being struck by an object 5 2.2 2.3
8) Being caught in or compressed by equipment or objects 5 2.2 2.3
9) Carelessness, not paying attention 5 2.2 2.3
10) Cuts, abrasions, lacerations 5 2.2 2.3
11) Back injuries 4 1.7 1.9
12) Exposure to harmful substances or environment 2 0.9 0.9
13) Employees not adhering to safety regulations/policies 2 0.9 0.9
14) Bites, scratches 2 0.9 0.9
15) Contact with high/low temperature 1 0.4 0.5
16) We have not had any losses/claims for a while 5 2.2 2.3
17) Fraudulent claims 4 1.7 1.9
18) Other (e.g., knee injury, cumulative trauma disorder) 11 4.8 5.1
Number of responses to item 215 93.1 100.0
Number of no response 16 6.9
Total participants 231 100.0
Table 2
Table 2
While it is good
that these decision
makers recognize
the importance of
safety training
and programs, it
is also important
that they
understand the
importance of
other safety
interventions.
036_042_F2Huang_0409:Layout 1 3/11/2009 12:19 PM Page 40
www.asse.org APRIL 2009 PROFESSIONAL SAFETY 41
safety: Cost analysis model helps build business case for safety.
Professional Safety, 49(4), 22-29.
Bureau of Labor Statistics (BLS). (2004). Event or exposure
leading to injury or illness. Washington, DC: U.S. Department of
Labor, Author. Retrieved Feb. 25, 2009, from http://www.bls
.gov/iif/oshdef.htm.
BLS. (2008). Census of fatal occupational injuries: Current and
revised data. Washington, DC: U.S. Department of Labor, Author.
Retrieved from http://www.bls.gov/iif/oshcfoi1.htm.
Cohen, A. (1977). Factors in successful occupational safety
programs. Journal of Safety Research, 9, 168-178.
Connelly, M.L., Conaglen, H.M., Parsonson, B.S., et al.
(1998). Child pedestrians crossing gap thresholds. Accident
Analysis and Prevention, 30, 443-453.
DeArmond, S., Huang, Y.H., & Chen, P.Y. (2007, March).
How do we stack up? Corporate financial decision makers’ per-
ceptions of safety performance, safety programs and safety per-
sonnel. Professional Safety, 52(3), 28-34.
Griffiths, D.K. (1985). Safety injuries of management.
Ergonomics, 28, 61-67.
Huang, Y.H., Leamon, T.B., Courtney, T.K., et al. (2007).
Corporate financial decision makers’ perceptions of workplace
safety. Accident Analysis and Prevention, 39, 767-775.
Hunt, H.A. & Habeck, R.V. (1993). The Michigan disability
prevention study. Business Outlook, 10(1).
LaBelle, J.E. (2000, April). What do accidents truly cost?
Professional Safety, 45(4), 38-42.
Liberty Mutual. (2001). A majority of U.S. businesses report
workplace safety delivers a return on investment [News Release].
Boston, MA: Author.
Liberty Mutual. (2007). 2005 Workplace Safety Index. Boston,
MA: Author. Retrieved Feb. 25, 2009, from http://www.liberty
mutual.com/omapps/ContentServer?cid=1078447727400&page
name=CMInternet/Document/ShowDoc&c=Document.
Marsh, T., Davies, R., Phillips, R.A., et al. (1998). The role of
management commitment in determining the success of a behav-
knowing how financial executives in general per-
ceive safety priorities, concerns and other safety
issues creates an opportunity for expanding and
enriching the dialogue between SH&E professionals
and their financial decision makers.
Conclusion
Financial executives who were surveyed said that
the top benefits of an effective workplace safety pro-
gram were predominately financial in nature (e.g.,
increased productivity, reduced costs). This finding
should act as a reminder to SH&E professionals
about the perspective from which financial decision
makers view safety programs. Awareness of this per-
spective may help practitioners to better communi-
cate with their own organizations’ financial decision
makers. However, it also identifies an important
challenge for SH&E professionals—the need to com-
municate all of the important benefits of effective
safety programs to financial decision makers.
References
Adams, S. (2002, Aug.). Financial management concepts: Mak-
ing the bottom-line case for safety. Professional Safety, 47(8), 23-26.
Amick, B.C., Robertson, M.M., DeRango, K., et al. (2003).
Effect of office ergonomics intervention on reducing musculoskel-
etal symptoms. Spine, 28, 2706-2711.
ASSE. (2002). The return on investment in safety, health and
environmental management programs [White paper]. Des Plaines,
IL: Author. Retrieved Feb. 25, 2009, from http://www.asse.org/
practicespecialties/bosc/bosc_article_6.php.
Behm, M., Veltri, A. & Kleinsorge, I. (2004, Apr.). The cost of
Responses About Top Workplace Safety Concern
Rank Frequency Percent Valid percent
1) Overexertion 43 18.6 20.3
2) Repetitive motion 31 13.4 14.6
3) Highway accidents 27 11.7 12.7
4) Falling on the same level 21 9.1 9.9
5) Bodily reaction 12 5.2 5.7
6) Being caught in or compressed by equipment or objects 11 4.8 5.2
7) Exposure to harmful substances or environment 9 3.9 4.2
8) Falling from heights 8 3.5 3.8
9) Employee carelessness or lack of focus 7 3.0 3.3
10) Flu, disease, viruses, bacteria, infection 5 2.2 2.4
11) Creating a safe work environment 4 1.7 1.9
12) Cuts, abrasions, lacerations from needles, knives
or sharp object 4 1.7 1.9
13) Striking against an object 3 1.3 1.4
14) Workplace violence 3 1.3 1.4
15) Safety education and training 3 1.3 1.4
16) Being struck by an object 2 0.9 0.9
17) Contact with high voltage/electricity 2 0.9 0.9
18) Contact with high/low temperature 1 0.4 0.5
19) All concerns are equally important 2 0.9 0.9
20) No concerns 3 1.3 1.4
21) Other 11 4.8 5.2
Number of responses to item 212 91.8 100.0
Number of no response 19 8.2
Total participants 231 100.0
Table 3
Table 3
036_042_F2Huang_0409:Layout 1 3/11/2009 12:19 PM Page 41
42 PROFESSIONAL SAFETY APRIL 2009 www.asse.org
Sawacha, E., Naoum, S. & Fong, D. (1999). Factors affecting
safety performance on construction sites. International Journal of
Project Management, 17(5), 309-315.
Shannon, H.S., Mayr, J. & Haines, T. (1997). Overview of the
relationship between organizational and workplace factors and
injury rates. Safety Science, 26, 201-217.
Shannon, H.S., Walters, V., Lewchuck, W., et al. (1996).
Workplace organizational correlates of lost-time accident rates
in manufacturing. American Journal of Industrial Medicine, 29(3),
258-268.
ioral safety intervention. Journal of the Institution of Occupational
Safety and Health, 2(2), 45-56.
OSHA. (2007). Safety and Health Management Systems eTool:
Module 1–Safety and Health Payoffs, Helpful Statistics. Washing-
ton, DC: U.S. Department of Labor, Author. Retrieved from http://
www.osha.gov/SLTC/etools/safetyhealth/helpfulstatistics.html.
Rosenman, K.D., Kalush, A., Reilly, M.J., et al. (2006). How
much work-related injury and illness is missed by the current
national surveillance system? Journal of Occupational and Environ-
mental Medicine, 48(4), 357-365.
19.9%
27.3%
21.1%
15.5%
5.0%
8.1%
0.6% 0.6% 1.2% 0.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Percent of parcipants
Perceived indirect cost per dollar of direct cost (dollar)
Figure 1
Figure 1
Perceived Ratio of Direct Cost vs. Indirect Cost
Note. The average estimation of the ratio of direct cost versus indirect cost was $2.12 (SD = 1.9); the arrow indicates the
median score (the 50th percentile) ($2).
The 50th percentile
12.8%
26.7%
25.0%
14.0%
3.5%
8.7%
5.2%
0.6% 0.6% 0.6% 1.2% 1.2%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Percent of parcipants
Perceived indirect cost per dollar of direct cost (dollar)
Figure 2
Figure 2
Perceived Dollar Return on Each Dollar
Spent Improving Workplace Safety
Note. The average perceived return on safety investment was $4.41 (SD = 12.0). The arrow indicates the median score (the
50th percentile) ($2).
The 50th percentile
Study
participants
recognized
that there are
indirect costs
in addition
to the direct
costs associ-
ated with
occupational
injuries and
that these
costs can be
substantially
larger than the
direct costs.
036_042_F2Huang_0409:Layout 1 3/11/2009 12:19 PM Page 42
... The competence approach as a tool for improving the production management efficiency, increasing labor productivity, reducing production and professional risks is considered in various countries (Boyatzis, 2008;Eeckelaer & Treutlein, 2010;Elin, 2014;Huang et al., 2009; "Mainstreaming OSH into business management", 2010; "A majority of U.S. businesses report workplace safety delivers a return on investment", 2001; Radyuk & Basinskaya, 2013;Subetto, 2006;Targoutzidis et al., 2014; The return on investment in safety, health and environmental management programs", 2002). ...
... The investments costs and benefits comparison in labor protection according to the various countries estimates shows that 1 dollar of direct enterprise losses associated with unsatisfactory labor protection organization entails at least 2 dollars of indirect losses (Dyukina et al., 2020). The such losses ratios were obtained as 1:2, 1:3, 1:4 in the works of foreign colleagues ("A majority of U.S. businesses report workplace safety delivers a return on investment", 2001; Dyukina et al., 2020;Huang et al., 2009;Elin, 2014;). At the same time the assessment, as a rule, was carried out only on the most significant indicator -the occupational injuries indicator. ...
... We therefore conclude that there is strong evidence that reduced accident/incident rate is dependent on the implementation of participatory hazard management system in the bonny NLNG construction project as buttressed by the 82% large extent response of the sample respondents. This conclusion is supported by the empirical studies of Huang et al., 2009, which observed a 28% reduction in costs associated with work related injuries/illnesses as a result of the implementation of effective workplace safety programs (participatory hazard management system) in 231 U.S. companies with 100 or more employees. ...
... We therefore conclude that there is a strong evidence that increased organizational productivity is dependent on the implementation of participatory hazard management system in the bonny NLNG construction as buttressed by the 81% large extent response of the sample respondents. This conclusion is also supported by the empirical studies of Huang et al., 2009, which observed a 43% increase in productivity as a result of the implementation of effective workplace safety programs (participatory hazard management system) in 231 U.S. companies with 100 or more employees. ...
Article
Full-text available
The paper examined participatory hazard management system and accident prevention in the bonny NLNG construction project. The research question addressed the extent at which reduced accident/incident rate and increased organizational productivity is dependent on the implementation of participatory hazard management system in the bonny NLNG construction project. It is based on the fundamental behavioural cybernetic principle that those directly affected by workplace hazards, should be primarily responsible for managing and controlling them. The core aspect of the study is the use of cross-sectional survey research design in generating the required primary data. The place of study is the bonny NLNG construction project while the duration of study is between March, 2012 and February, 2013. A sample of 396 (35 supervisors, 98 foremen and 263 workmen) respondents determined at 5% level of significance for sample error, using Yamane’s formula, was selected from a population of 40,568 employees using stratified random sampling method for the purpose of questionnaire administration. The results indicated that reduced accident/incident rate and increased organizational productivity is to a large extent dependent on the implementation of participatory hazard management system in the Bonny NLNG construction project as buttressed by the 82% and 81% large extent response rate respectively. It therefore recommends among others: regular site safety audits to identify/eliminate sub-causes of accident, regular staff training to improve their hazard identification skills, formation of health and safety committee to identify/eliminate potential hazards at the task level and making hazard identification/reporting everyone’s responsibility.
... Además, debe tenerse en cuenta que las personas que laboran en este entorno permanecen largos periodos de pie, en turnos de trabajo que en ocasiones son rotativos, e incluso han sido sujetas a condiciones de inseguridad, como asaltos o agresiones físicas o verbales. En lo relativo al riesgo ocupacional, si bien es imposible evitar la ocurrencia de hechos violentos, la organización tiene la capacidad y la responsabilidad de otorgar seguridad laboral con medidas preventivas (Huang et al., 2009), y dar apoyo psicológico o terapéutico a los empleados que viven estos eventos. ...
Article
Full-text available
El objetivo fue indagar el efecto de tres variables estresantes sobre el agotamiento laboral, su efecto sobre el cinismo organizacional y la intención de rotación. El método fue la modelación de ecuaciones estructurales PLS. Los resultados mostraron que la carga laboral y el riesgo ocupacional afectan significativamente al agotamiento emocional, influyendo en el cinismo y finalmente en la intención de rotación. La originalidad radica en el uso de la teoría de la conservación de los recursos del estrés, a través de tres estresores: condiciones laborales, carga laboral y riesgo ocupacional en un sector poco estudiado en el contexto mexicano. Los hallazgos destacan a la sobrecarga laboral y al riesgo ocupacional como antecedentes que conducen al agotamiento emocional, posteriormente al cinismo y llevan al trabajador a tener la intención de abandonar la organización. Las limitaciones se encuentran en que el estudio se llevó a cabo solo en una cadena y transversalmente.
... Both 3 productivity and the costs incurred resulting from worker injuries makes performing work safely a vital characteristic of a profitable company (Huang & Hinze 2006). A study done in 2009 supports this idea that the more a firm spends on workplace safety, the lower its worker's compensation rates (Huang 2009). ...
Article
The United States Army Corps of Engineering Manual 385 (EM 385) has become a vital part of construction operations on all Department of Defense (DOD) construction projects to create a safer work environment. With tremendous effort on developing and enforcing the EM 385, the question of whether the EM385 provides any value for project safety is critical to the construction industry at large. This study looks for causation between the EM 385 and mishap reduction by isolating three dependent variables and a variety of explanatory variables. The data was compiled using both the OSHA Data Initiative (ODI) and the Federal Spending Database. A structural equation is developed to conduct multiple regression analysis assuming EM 385 will reduce the number of mishaps and the severity of mishaps. However, the result shows the effectiveness of EM 385 on reducing the number and severity of mishaps is not significant.
Article
In the context of a dynamically developing digital economy in Russia, the labor protection management system in organizations is integrated into production management processes, based on the principles of social partnership and digitalization of labor protection processes. Emerging new and existing problems of finding tools for effective management of labor protection in modern socio-economic conditions can also be solved based on a competence-based approach. In order to study the impact of professional competence of specialists in the field of labor protection on the effectiveness of labor protection management and the development of social and labor relations in the field of labor protection in the organization, there was conducted an analytical study using empirical material from more than 1,600 organizations. There was studied state of professional competence of more than 2,600 specialists in the field of labor protection. The expert method identifies various levels of professional competence of specialists in the field of labor protection: high, medium and low. The method of mathematical analysis (main components) is used to assess the factors of formation of their professional competence, such as basic education, experience and work experience, professional development, and the availability of additional competencies. Using the methods of analysis and synthesis, the authors justified and proposed indicators of social and labor relations in the field of labor protection, which are influenced by the professional competence of specialists in the field of labor protection. The main indicator was the rate of accidents at work. As a result, the method of factor analysis determined the complex influence of the level of professional competence of specialists in the field of labor protection on the development of social and labor relations in the field of labor protection. From the positions of various categories of personnel, this influence is estimated as directly proportional, constructive, nominal and destructive. The authors obtained a quantitative assessment of the impact of the level of professional competence of specialists in the field of labor protection on the level of injuries as one of the indicators of social and labor relations in the field of labor protection in organizations on the example of one of the factors of its formation - basic specialized education. The article shows the positive impact of improving the professional competence of specialists in the field of labor protection on the economic efficiency of the enterprise.
Article
Electrical workplace fatalities for the calendar year 2014 (January 1, 2014-December 31, 2014) were evaluated from the federal Occupational Safety and Health Administration's (OSHA) list of workplace fatalities and catastrophes. Electrocutions in U.S. workplaces continue to be a concern, especially for nonelectrical workers where electrical hazards may not be sufficiently recognized. This study includes a comparison between electrical fatalities of electrical and nonelectrical workers. The most common fatality from electrocution for nonelectrical workers was contact with power lines followed by contact with an energized machine, tool, appliance, or light fixture. The most common cause of a fatality among electrical workers was contact with wiring, a transformer, or other electrical components. Possible design interventions for the prevention of electrical fatalities are suggested. Design interventions are also needed for nonelectrical workers who may work near overhead power lines. Human costs are also considered in this study.
Article
Full-text available
Three gender-balanced groups of 16 school children (5-6 years, 8-9 years, 11-12 years) participated in individual pretests of vision, hearing, and time to walk across a 12-m wide urban street and back. Each child then completed 10 roadside trials requiring judgement of the threshold point at which they would no longer cross in front of traffic approaching from their right. The judgements were made from a site immediately in front of a parked car at a point 2 m from the kerb and 4 m from the centre of the road. Traffic speeds and distances were measured using a laser speed and distance detector. The results indicated that, overall, distance gap thresholds remained constant regardless of vehicle approach speeds. Analysis of the thresholds for distance gap judgements for the 4-m half-street crossing showed that some of the older children could be expected to make safe decisions, but this was not so for the 5-6- and 8-9-year-olds at vehicle approach speeds above 60 kph. Almost two-thirds of the children reported using distance to judge gaps, which proved the least adequate strategy in terms of proportion of resultant safe decisions. The findings are discussed in relation to developing effective child pedestrian safety strategies.
Article
This 3-year collaborative research project was designed to provide empirical evidence to substantiate the impact of various employer policies and practices on the prevention and management of workplace disability. It studied a random sample of 220 Michigan establishments with more than 100 employees from seven different industries who responded to a mail survey in the first half of 1991. The study correlates differences in employer-reported levels of achievement on policy and practice dimensions with performance on disability outcome measures, while controlling for a set of establishment characteristics in a multivariate regression analysis. There are three sets of policy and practice interventions evaluated here. First is safety intervention, that is, the attempt to prevent injuries from happening at all (measured as Safety Diligence, Ergonomic Solutions, and Safety Training). Second is disability management, the set of strategies to minimize the disability consequences of a given injury or disease arising from the workplace (measured as Disability Case Monitoring and Proactive Return-to-Work Program). Third is health promotion, which represents an attempt to intervene directly with individuals to encourage more healthy lifestyles, in the expectation that this will reduce the likelihood of a workplace accident or disease, or reduce the lost worktime resulting from a given injury or disease (measured as Wellness Orientation). In addition, a fourth dimension was included to capture the general environment of the firm and the orientation of its management in areas relevant to the study (measured as People Oriented Culture and Active Safety Leadership). These interventions and the general environment of the firm were scored on this set of eight variables which represent self-rated firm achievement of the policy and practice dimensions. The marginal effect of these interventions is determined by comparing firm performance on the incidence of work-related disability (Los
Article
This study, through a random national survey, explored how senior financial executives or managers (those who determined high-level budget, resource allocation, and corporate priorities) of medium-to-large companies perceive important workplace safety issues. The three top-rated safety priorities in resource allocation reported by the participants (overexertion, repetitive motion, and bodily reaction) were consistent with the top three perceived causes of workers' compensation losses. The greatest single safety concerns reported were overexertion, repetitive motion, highway accidents, falling on the same level and bodily reaction. A majority of participants believed that the indirect costs associated with workplace injury were higher than the direct costs. Our participants believed that money spent improving workplace safety would have significant returns. The perceived top benefits of an effective workplace safety program were increased productivity, reduced cost, retention, and increased satisfaction among employees. The perceived most important safety modification was safety training. The top reasons senior financial executives gave for believing their safety programs were better than those at other companies were that their companies paid more attention to and emphasized safety, they had better classes and training focused on safety, and they had teams/individuals focused specifically on safety.
Financial management concepts: Mak-ing the bottom-line case for safety
  • S Adams
Adams, S. (2002, Aug.). Financial management concepts: Mak-ing the bottom-line case for safety. Professional Safety, 47(8), 23-26
How do we stack up? Corporate financial decision makers' perceptions of safety performance, safety programs and safety personnel Safety injuries of management
How do we stack up? Corporate financial decision makers' perceptions of safety performance, safety programs and safety personnel. Professional Safety, 52(3), 28-34. Griffiths, D.K. (1985). Safety injuries of management. Ergonomics, 28, 61-67.
Event or exposure leading to injury or illness. Washington, DC: U.S. Department of Labor, Author. Retrieved Feb Census of fatal occupational injuries: Current and revised data Factors in successful occupational safety programs
: Cost analysis model helps build business case for safety. Professional Safety, 49(4), 22-29. Bureau of Labor Statistics (BLS). (2004). Event or exposure leading to injury or illness. Washington, DC: U.S. Department of Labor, Author. Retrieved Feb. 25, 2009, from http://www.bls .gov/iif/oshdef.htm. BLS. (2008). Census of fatal occupational injuries: Current and revised data. Washington, DC: U.S. Department of Labor, Author. Retrieved from http://www.bls.gov/iif/oshcfoi1.htm. Cohen, A. (1977). Factors in successful occupational safety programs. Journal of Safety Research, 9, 168-178.
Census of fatal occupational injuries: Current and revised data
www.asse.org APRIL 2009 PROFESSIONAL SAFETY 41 safety: Cost analysis model helps build business case for safety. Professional Safety, 49(4), 22-29. Bureau of Labor Statistics (BLS). (2004). Event or exposure leading to injury or illness. Washington, DC: U.S. Department of Labor, Author. Retrieved Feb. 25, 2009, from http://www.bls .gov/iif/oshdef.htm. BLS. (2008). Census of fatal occupational injuries: Current and revised data. Washington, DC: U.S. Department of Labor, Author. Retrieved from http://www.bls.gov/iif/oshcfoi1.htm. Cohen, A. (1977). Factors in successful occupational safety programs. Journal of Safety Research, 9, 168-178.
Safety injuries of management
  • D K Griffiths
Griffiths, D.K. (1985). Safety injuries of management.
A majority of U.S. businesses report workplace safety delivers a return on investment
  • J E Labelle
LaBelle, J.E. (2000, April). What do accidents truly cost? Professional Safety, 45(4), 38-42. Liberty Mutual. (2001). A majority of U.S. businesses report workplace safety delivers a return on investment [News Release].