Report identifies link between performance and health and safety strategy
Published: 10 June 2008
The Health and Safety Executive (HSE [1]) recently commissioned the Work Foundation and the Institute for Employment Studies (IES [2]) to examine UK business attitudes, intentions and performance, and their relationship to health and safety [3] strategies and expenditure in the workplace. The final report – Work and enterprise panel 2 (833Kb PDF) [4] – was published by HSE in September 2007. It also analyses survey evidence to assess how health and safety issues interact with key strategic decisions in other core business areas to achieve the greatest impact on observable performance.[1] http://www.hse.gov.uk[2] http://www.employment-studies.co.uk/main/index.php[3] www.eurofound.europa.eu/ef/observatories/eurwork/industrial-relations-dictionary/health-and-safety[4] http://www.hse.gov.uk/research/rrpdf/rr589.pdf
A recent survey reveals that health and safety is afforded considerable attention by many companies in the United Kingdom, although smaller organisations are less likely to have positive attitudes towards related issues or strategies. This is a significant finding, given that workplace fatalities, injuries and ‘lost days’ due to illness or injury remain high despite the UK’s comparatively good health and safety record within the EU and recent legislative developments.
The Health and Safety Executive (HSE) recently commissioned the Work Foundation and the Institute for Employment Studies (IES) to examine UK business attitudes, intentions and performance, and their relationship to health and safety strategies and expenditure in the workplace. The final report – Work and enterprise panel 2 (833Kb PDF) – was published by HSE in September 2007. It also analyses survey evidence to assess how health and safety issues interact with key strategic decisions in other core business areas to achieve the greatest impact on observable performance.
About the study
The report draws on an extensive telephone survey of 3,000 UK businesses which reflect the size and sectoral distribution of the UK business population, albeit with a top-up sample of very large companies. The company sample, which was generated by random digit dialing, also allows for a geographical representation, according to Government Office Regions. The response rate was 23.7%, and telephone interviews were carried out with chief executive officers, managing directors, finance or human resources directors in June and July 2004. The study used Computer Assisted Telephone Interviewing (CATI) to structure the survey’s fieldwork.
Main findings
Health and safety risk and strategy
As it may be expected, certain economic sectors – such as construction, retail trade and hotels and restaurants, agriculture, other community services and utilities – carry a higher degree of health and safety risks than others. Moreover, medium-sized enterprises employing 50–249 workers tend to operate in environments where they have to manage health and safety risks to a greater extent than other size classes of companies (see table).
| Sector | % companies below industry skills benchmark | Companies manage significant health and safety risks (Scale 1 to 5)1 |
|---|---|---|
| Agriculture | 15.48 | 4.30 |
| Construction | 0.83 | 4.49 |
| Personal household activities | 5.43 | 3.77 |
| Retail, hotels and catering | 1.64 | 4.40 |
| Transport and communications | 5.66 | 4.04 |
| Financial services | 12.24 | 3.04 |
| Real estate | 11.57 | 3.10 |
| Education | 7.41 | 3.33 |
| Health | 10.34 | 4.21 |
| Other community services2 | 10.14 | 4.23 |
| Mining | 18.52 | 3.78 |
| Manufacturing | 17.24 | 3.76 |
| Utilities | 21.43 | 4.29 |
| Company size | ||
| 0–9 employees | 9.01 | 3.67 |
| 10–49 employees | 9.82 | 3.80 |
| 50–249 employees | 5.84 | 3.94 |
| 250 employees | 8.99 | 3.77 |
Notes: 1 Respondents were required to state to which extent they agreed or disagreed with the statements, with responses ranging from (1) strongly disagree to (5) strongly agree.
2 Other community services include: sewage and refuse disposal and sanitation; activities of membership organisations; recreational, cultural and sporting activities; other service activities; and private households employing staff.
Source: HSE, 2007, p. 18
Furthermore, the study findings reveal that:
a strong correlation exists between a strategic commitment to health and safety and the belief that health and safety measures are boosting a company’s financial performance;
micro-enterprises in particular may be failing to address strategic issues surrounding the management of health and safety at work because they are less likely to believe that it will improve their financial performance;
the average annual expenditure on health and safety amounts to GBP 200 (€251 as at 26 May 2008) per full-time employee;
only 29% of companies have an explicit health and safety budget;
companies appear to make their budgetary decisions first, then decide how strong their strategic commitment is going to be, which in turn determines the size of the budget allocation.
Links between health and safety strategy and other business areas
Recognising that health and safety is not commonly seen as having an equal status with other business areas, tests were carried out to clarify basic associations between a health and safety strategy index and five other strategy indices covering shareholders, stakeholders, innovation, customer and markets, and people. A health and safety strategy was found to be more strongly associated with the stakeholder and people indices and less so with the shareholder index. In general, better health and safety index scores were associated with higher index scores in the five other strategic domains.
Performance analysis
The research also found that:
greater health and safety expenditure was in no case associated with a worsening of performance. The same outcome held true for the health and safety strategy index;
higher health and safety strategic index scores were linked with supporting companies in creating a workforce whose skills base is above their industry’s benchmark;
higher health and safety spending was connected with companies having an increased probability of attracting good quality employees from their industry pool, suggesting that higher health and safety expenditure ‘sends a positive signal to potential employees’;
higher health and safety expenditure was also linked to improved employee commitment within the existing workforce, and to faster sales growth over three years.
Commentary
The UK has a good workplace health and safety record within the EU and is second only to Sweden in terms of fewest fatalities as a result of occupational accidents and diseases. However, despite certain legislative developments, in 2006–2007, the UK still recorded 241 fatalities (a rate of 0.8 per 100,000 workers), 141,350 other non-fatal injuries (535.1 per 100,000 employees) and 36 million lost working days (1.5 days per worker), 30 million of which were due to work-related ill health and six million due to workplace injury (see HSE statistics on work-related ill health, injuries, dangerous occurrences, enforcement and gas safety). The statistics support the study’s general finding that health and safety ranks as a significant issue for most UK companies, although smaller enterprises are less likely to have a positive attitude towards health and safety issues or to consider it a key strategic area.
The findings also reveal a level of complementarity between health and safety strategies and broad business objectives, such as creating a great place to work, innovation, stakeholder value and business growth. According to the study’s authors, this suggests that health and safety commitment is strongly aligned with a desire among employers to deliver high levels of job enrichment, to create a working environment that is supportive of creativity and innovation, and to engage with the wider community, including suppliers. Finally, the performance results conjointly indicate that health and safety spending or a strategic health and safety commitment are clearly associated with tangible improvements to employee-related features, which in turn can feed into a measurably better financial performance.
Reference
CMS Cameron McKenna LLP, EU and UK health and safety law and policy calendar (238Kb PDF), prepared by the Health and Safety Law Group, October 2006.
Jane Parker, University of Warwick
Eurofound recommends citing this publication in the following way.
Eurofound (2008), Report identifies link between performance and health and safety strategy, article.
