Study finds positive ROI in workplace safety and health in three key sectors

Toronto — A study of large employers in the manufacturing, construction and transportation sectors in Ontario found average returns on investment in workplace safety and health ranging from 24% to 114%.

Researchers from the Institute for Work and Health attempted to build on a 2017 study that looked at what 334 organizations in Ontario spent on occupational health and safety practices. Their study had three phases. The first was estimating the average cost of lost-time workers’ compensation claims (direct and indirect costs).

In the second phase, the researchers sought to identify establishments with 100 or more full-time equivalent employees that had the lowest incidence of work-related injuries and illnesses in the manufacturing, construction and transportation sectors.

The third phase used four steps to estimate the financial benefit of OSH expenditures:

• Estimating OSH expenditures
• Estimating tangible financial benefits
• Estimating intangible financial benefits
• Calculating ROI on OSH expenditures

Results show that the transportation sector had the highest average ROI percentage when it comes to OSH expenditures, at 114. The estimated average financial benefit in that sector was $2,980, compared with $1,326 in average expenditures per employee each year. In the construction and manufacturing sectors, that percentage was 34 ($4,851 in estimated average financial benefits vs. $3,625 in average expenditures) and 24 ($1,884 in benefits vs. $1,551 in expenditures), respectively.

The study was published in a May Issue Briefing from IWH.