Safety Risks - Case Study #2

According to Safe Work Australia, in 05'-06' the cost of work-related injury and disease for Australian employers, workers and the community was an estimated total cost (direct and indirect) was $57.5 billion. This is equivalent to 5.9% of GDP.

To break down the costs and localise them to individual organisations, Professor Patrick Hudson, a safety specialist based the Netherlands Delft University of Technology, made the comments recently at a safety briefing in Melbourne “I have an estimate that a company may be losing up to 10 per cent of its turnover as a result of poor OHS and E (occupational health, safety and environment) performance, that is usually a whack of money,”

Again, Dr Ian Woods, Senior Research Analyst at AMP Capital Investors, said at the 2009 Safety Conference, "From an investors perspective, poor OHS performance reflects poor management of avoidable company costs. It also reflects that a company is not managing one of its important intangible assets, its people. Investors use OH&S performance to gain insight into company management, and what ... we expect companies to be doing"

As the average workplace injury is a direct cost and around 6 percent of profit, Woods contends that investors (and obviously potential purchasers of a business) cannot ignore the cost of workplace injury.

Proactively managing OHS:

1.    Reduces operating costs

2.     Increases worker productivity

3.      Increase profitability overall, and

4.     Increases shareholder value

Why wouldn’t you do it?