1. PUTTING
safety to work
THE BUSINESS CASE FOR PSYCHOLOGY-
BASED SAFETY TRAINING PROGRAMS
Tristan Casey
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2. Putting safety to work: The business case for psychology-based safety training programs
Key Points P.2
• Safety continues to be a serious workplace issue
- Worldwide: A worker dies from a workplace safety issue every 15 seconds3
- Australia: 500,000 safety incidents recorded during 20094
- USA: 3.1 million safety incidents recorded during 20095
• The costs of mismanaged safety borne by employers are typically divided into two camps —
direct and indirect
- Direct costs: Compensation payouts, legal fees, recruitment, investigation, etc.
- Indirect costs: Moral, reputation, productivity, prevention initiatives, etc.
• Mismanaged safety costs national economies billions of dollars annually
- Australia: $60 billion per year 7
- USA: $249 billion per year 8
• Mismanaged safety costs employers thousands of dollars annually
- Australia: $5,000 - $25,000 depending on industry and injury type7
- USA: $27,000 per incident in the construction industry2
- However, figures vary markedly between industries and employers9
• However, safety can do much more for the organisation’s bottom line than simply ‘pay for itself’
- Psychology-based safety training programs have been shown to produce returns of between
46% and 1277%11,12,13,14
- Survey data suggests that safety training has spill-over effects on organisational
performance and revenue, via increased productivity and morale
• Three particular psychology-based safety interventions represent the best ‘bang for your safety buck’
in terms of carry-over effects to cost reductions (via injury reduction) and productivity increases
- Safety citizenship training programs:
Encouraging employees to adopt safety tasks and duties that sit outside what is expected as
minimum standard on the job
- Safety leadership training:
Equipping leaders with the soft skills required to motivate, inspire, and support employees
to achieve strong safety performance
- Safety coaching:
Supporting employees and leaders to take ownership of safety across an organisation,
and drive the changes necessary to achieve strong safety performance
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3. Putting safety to work: The business case for psychology-based safety training programs
Putting safety to work: to dealing with the murkiness of attitude and behaviour
change, and how these changes translate to a dollar P.3
The business case for value. For example, what is the value of a one-unit
psychology-based increase in safety climate? Or, to what dollar figure
does a ‘pass’ versus a ‘fail’ on a safety knowledge
safety training test equate? Clearly, an approach that unites
programs. financial accountability with the powerful positive
change of psychology-based safety interventions is
It’s time to revisit the view that safety is a cost. For far desperately needed.
too long, safety and production have been considered
by many as two extremes on the same continuum In this article, we build a convincing financial case
— two incompatible objectives locked in a tug of for organisational investment in psychology-based
war for the organisation’s resources. So, it is not safety interventions. First, a suite of safety statistics
surprising that safety training is commonly perceived is presented to highlight the ongoing prevalence
as a significant outlay that has little utility above the of workplace injury and illness. Next, these data
prevention of costs associated with workplace injuries1. are evaluated in light of the exorbitant costs of
The pervasiveness of this view has been compounded mismanaged safety, which we believe rationalises
by a notable lack of research on the economic organisational expenditure on safety. We then argue
utility of safety interventions: an oversight that has that organisations should instead view safety as an
persisted for decades and has only started to be investment that if done right, pays off in dividends.
addressed recently2. In closing, we summarise emerging research on
safety training and present a list of the ‘Top Three
Thinking about safety as a cost threatens to derail any Safety Payoffs’.
attempt to achieve the holy grail of safety performance
— Zero Harm. Safety should instead be considered Safety Refuses to Play Nicely
an asset. Safety is something that, if done well, There is little disagreement that safety continues to be a
protects the organisation and its employees from serious workplace issue. Despite decades of progress
adverse events (both financial and personal) and may in the science and practice of safety management,
even carry over into productivity and performance. many organisations continue to experience safety
Mediocre safety interventions minimise the cost of incidents that result in serious consequences. To
injuries, whereas good safety interventions touch each highlight the prevalence of the global safety problem,
part of an organisation to achieve true and lasting consider these sombre statistics3:
change, and produce tangible financial gains.
• Every 15 seconds,
Many safety initiatives, while deemed cost-effective,
a worker dies from an incident
are ultimately less effective over the long-term because
or disease incurred at work.
they do not deal with the core issue — the attitudes
and behaviour of people. In this case, the intervention • Every 15 seconds,
tends to focus on environment and practices-related 160 workers experience a work-
issues, such as upgrading equipment, introducing new related incident.
safety systems, or automating risky tasks. Although
these initiatives can be clearly linked to financial These figures translate to 2.3 million work-related
returns (such as increased volume or speed of work), deaths and 317 million incidents each year. Regional
the underlying element of risk — the person — has not statistics, while improving for developed countries, are
been considered and so remains within the system. still nowhere near the elusive Zero Harm target aspired
to by industry.
Another issue faced by financial decision makers is that
many developers and providers of psychology-based In Australia, over half a million employees experienced
safety interventions are simply not used to thinking a work-related incident or illness during 20094. The
in economic terms. Therefore, it is difficult for them Accommodation and Food Services; Utilities; Arts
to articulate the concrete financial returns achieved and Recreation Services; and Transport, Postal and
through programs such as safety training. Likewise, Warehousing industries experienced the highest rates
people with a largely fiscal outlook are unaccustomed of safety incidents (see Table 1). In the United States
over the same period, roughly 3.1 million nonfatal
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4. Putting safety to work: The business case for psychology-based safety training programs
workplace injuries and illnesses were reported. Also, Table 2. Direct and indirect costs to the employer
4,690 workers were killed while on the job — 13 associated with safety incidents. P.4
deaths per day5. Together, these figures show that
DIRECT COSTS INDIRECT COSTS
safety management has a significant way to go before
Zero Harm is achieved.
Worker’s compensation Morale
payouts
The Price of Mismanaged Safety
From a social perspective, safety-related tragedies Legal fees Organisational
have ongoing aftershocks that ripple outwards commitment
from the family epicentre and impact colleagues, Recruitment Turnover
friends and entire communities. Notwithstanding
these terrible personal and social consequences, Retraining Productivity
mismanaged safety carries a huge cost to business. Administrative/ Competitiveness
Often these costs are hidden or, worse, purposefully supervision time
concealed, which means that the true nature and
Emergency Reputation
impact of a safety event is often miscalculated. services
The costs of mismanaged safety borne by employers Investigation Injury prevention/
are typically divided into two camps — direct and safety initiatives
indirect6. Direct costs are those that are tangible, Insurance administration Overtime payments
and for the most part, easily estimated. Examples of to other staff
direct costs include worker’s compensation payouts,
Property damage Over-hiring
property repair or replacement, and fines/penalties
from regulatory bodies. Indirect costs are less Payouts until insurance claim Insurance premiums
visible and tangible, and can be difficult to articulate is processed
in financial terms. Examples of indirect costs are
Sick leave Compensating workers
decreased morale and reputation. There are also for high risk jobs
flow-on costs such as increased wages for high risk
jobs and over-hiring of staff (see Table 2). Fines/penalties
Return to work program
Table 1. Top four Australian industries according to administration
rate of safety incidents between 2009/10.
Immediate production loss
Rank INDUSTRY RATE OF INCIDENCE
Intra-organisational
communication
ACCOMMODATION
84 per
1 AND FOOD
1,000 employees
SERVICES
These direct and indirect costs quickly accumulate.
From a national perspective, safety incidents cost
79 per the Australian economy over $60 billion per year, or
2 UTILITIES
1,000 employees
4.8% of the gross domestic product for the 2009-10
financial year7. Workplace injuries and illnesses also
ARTS AND
3 RECREATIONAL
77 per impact markedly on the US economy: a recent study
1,000 employees estimated these costs at over $249 billion, which
SERVICES
is equivalent to the national health costs of major
TRANSPORT,
74 per diseases such as cancer8.
4 POSTAL AND
1,000 employees
WAREHOUSING
Moreover, the costs to employers per safety incident
are rising. In the US, the average cost per safety
incident in the construction industry was estimated
at $27,000, which is roughly double the figure
reported in 20022. Australian estimates are more
conservative, yet still sizeable at $5,000-$25,000 per
workplace safety incident (see Table 3) and increasing
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5. Putting safety to work: The business case for psychology-based safety training programs
each year7. Researchers have shown that these Safety as a Cost
estimates vary significantly by company, industry, According to some, safety programs are seen as P.5
and incident type — in one study, the cost per a way to minimise unnecessary costs9,10. From
workplace incident ranged from $1,440 to $10,7409. In this perspective, expenditure on safety is justified
Australia, the average total cost of injury and disease because it reduces wastage of resources and avoids
is highest in the communication, mining, finance expenditure on people, equipment, and regulatory
and insurance, and utilities industries (see Table 4). penalties in the aftermath. As long as the outlay on
safety is less than the combined cost of injuries and
Table 3. Estimated costs of workplace injuries and illnesses, the initiative is deemed to be a success.
disease, borne by employers, per incident.
However, this approach effectively stalls the
INJURY DISEASE organisation’s progression along the safety maturity
curve. Without investment in safety training and
SHORT ABSENCE $630 $770
development, employees and leaders can, over time,
develop unhelpful or hindering attitudes, beliefs, and
LONG ABSENCE $7,950 $9,910
behaviours relating to safety.
PARTIAL INCAPACITY $16,160 $12,170
Safety as an Investment
FULL INCAPACITY $16,970 $14,800 Safety can do much more for the organisation’s
bottom line than simply ‘pay for itself’. In fact,
FATALITY $25,000 $63,350 organisations can put safety to work and generate
returns over and above the cost of conducting
AVERAGE $3,930 $9,670
the training.
Note: These data represent all Australian industries, therefore the Although firm economic utility data on psychology-
estimates will vary depending on average salary within the particular
based safety training is lacking, a mounting body of
industry and other contextual factors, such as fines/penalties and
insurance premiums. research evidence shows that targeting underlying
attitudes and behaviour in combination with traditional
Table 4. Top five industries according to total combined investments in environment and practices produces
costs of workplace injury and disease. the greatest effect on safety outcomes. Of the limited
work done to date, studies have shown that the return
TOTAL COMBINED on investment (ROI) of safety training interventions
RANK INDUSTRY
COST* PER CASE is positive, and in some cases, particularly lucrative
COMMUNICATION (see Table 5).
1 $175,200
SERVICES
2 MINING $170,000
3 FINANCE AND INSURANCE $157,100
4 UTILITIES $147,400
AGRICULTURE, FORESTRY
5 $126,100
AND FISHING
Note: Total combined cost includes the estimated costs borne by the
worker, the community, and the employer.
To avoid these significant financial, social, and
personal costs, increased and ongoing investment in
safety — particularly for interventions that target the
less visible, indirect costs — is paramount.
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6. Putting safety to work: The business case for psychology-based safety training programs
Table 5. ROI of selected safety management initiatives.
RETURN ON
$ Training Programs:
Safety Citizenship
P.6
SAFETY INITIATIVE Organisational citizenship refers to employee
INVESTMENT
behaviours that go ‘above and beyond’
Safety education about musculoskeletal
disorders with a focus on injury 46%
expected tasks and duties as detailed on the
prevention11. job description18. Applied to safety, employees
Training in the use of a health risk
show citizenship behaviours when they help
assessment tool to prevent back 179% others to complete tasks safely, keep up to
injuries12. date on safety knowledge by attending non-
Employee well-being program for mandatory training, and volunteer for safety
251%
offshore petroleum workers13. committees19. Interventions that stimulate
Training program aimed at increasing 1277% citizenship behaviours are particularly promising
employees’ general safety behaviours14. (after two years) from a financial perspective. Not only can they
reduce the prevalence of injuries, and hence, lost
In addition, safety training and related interventions, time and production, citizenship behaviours also
such as coaching, produce many spill-over effects increase the quality and quantity of production20.
that are often hidden from employers. For example,
a survey of 45 contractor organisations operating Therefore, safety interventions that promote
in the US construction industry revealed that 79% citizenship behaviours (e.g., team-building,
reported increased employee productivity and 83% safety communication skill development) not
reported increased workplace morale following a only reduce the costs of workplace injuries,
safety training event15. Further, 73% reported that but may also increase the productivity of
safety training contributed greatly to increased profits entire groups of workers in one swoop.
and work quality.
Indeed, our own research on the efficacy of ZIP
Safety for Teams showed that participation in
$ Leadership Training:
Safety
the program enhanced employees’ general well- Leaders are a natural point for safety intervention.
being, as evidenced by significant decreases in In particular, frontline leaders (e.g., supervisors,
depression, stress, and anxiety, and significant team leaders) exert a powerful force over the
increases in general life satisfaction. Although behaviours of workers, motivating increased
performance outcomes were not captured in this productivity and driving the achievement of
study, other researchers have shown that well-being organisational goals21. So, it makes financial
translates to increased productivity16, and decreased sense to target leadership as the effects are
stress-related compensation claims and use of likely to flow ‘down the chain’ to workers across
uncertified sick leave17. Translated to economic the organisation. Initial results from studies of
terms, these outcomes exert a direct effect on revenue safety leadership training are promising, as
and profitability. the effects on workers seem to be marked and
long-lasting. Of these training interventions,
programs that equip leaders with advanced ‘soft
‘Bang for your Safety Buck’ skills’ seem to produce the greatest effect on
Of the gamut of safety interventions available to employee performance. Example interventions
organisations, we have identified the top three include safety-by-walking-around22, safety
programs that we believe provide the largest ROI. conversations23, and direct training of safety
These interventions show the most promise of going leadership skills that motivate, inspire, and
beyond traditional safety initiatives by reducing costs generally establish higher quality relationships
associated with workplace injury and contributing to between leaders and subordinates24.
increased performance and revenue.
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7. Putting safety to work: The business case for psychology-based safety training programs
$ Coaching:
Safety
Conclusions P.7
Coaching-based safety interventions equip Safety is an ongoing challenge across all industries.
internal stakeholders with the skills and In fact, safety is actually costing organisations
knowledge required to successfully ‘own’ and more as time goes on. At one level, the traditional
‘drive’ increased safety performance across view of safety as a cost rather than an investment
an organisation. Coaching also consolidates is holding many businesses back from achieving
and intensifies the effects of traditional training the next level of safety performance and a raft of
interventions. Outside the safety domain, performance and financial benefits. At another
the ROI of coaching has been established25, level, safety training providers and financial
and in some cases, coaching has increased decision makers need to consider the issue from
productivity by nearly 90%26. Emerging research new perspectives. An integration of worldviews
on safety coaching has mirrored these results, here would do much to help psychologists and
with outcomes such as decreased near-misses trainers to be more financially accountable, and
and injuries, and enhanced organisational safety accountants and economists to better appreciate
culture27 following implementation. Further, the complexity and power of psychology-based
these effects seem to persist for years post- safety interventions. Although much work remains
intervention. to be done to explicitly link safety interventions
to tangible and measureable financial outcomes,
Focussing on the person element represents a research shows that safety training works, and
promising attitude for many organisations to more importantly, influences employee attitudes,
‘have their cake and eat it too’ when it comes beliefs and behaviours to produce positive safety
to safety. As psychologists continue to work and financial outcomes.
with organisations and become increasingly
‘business savvy’, evidence of the financial return
of such programs should start to emerge from the
academic literature and the work of consulting
firms. Nevertheless, the evidence shows that
these programs work, and partnerships between
safety training providers and organisations will
stimulate in-depth ROI research to demonstrate
the economic value of these interventions.
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8. Putting safety to work: The business case for psychology-based safety training programs
TRISTAN CASEY
Currently completing a Doctoral degree in Organisational Psychology, Tristan is an experienced and skilled
applied researcher. Tristan’s primary research interests include: safety climate, safety leadership, training
transfer and evaluation, and online survey methods. Tristan is passionate about synthesising and translating
empirical state-of-the-art for the purposes of practical application. P.8
is a global business dedicated to creating sustainable organizational change in the world
around us. Our mission at Sentis is to assist individuals and organizations change their lives for the better and
we do this through the application of psychology to safety, leadership and well-being in the workplace.
Brisbane Office Perth Office Denver Office
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