Companies Facing Financial Pressure Experience More Workplace InjuriesOctober 25, 2018
It is extremely important for businesses to meet their earnings forecasts. In a study conducted by the Harvard Business Review, it was tested as to whether there is a correlation between workplace safety and managers’ attempts to meet earnings expectations.
Rates of Injury vs. Performance Against Analyst Forecasts
The rates of work injury or illness are five to fifteen percent higher during periods where a business meets or barely exceeds its analyst forecasts. These rates are much higher than those businesses that miss or comfortably beat their forecasts. Data from OSHA shows that one in every 24 employees is injured in companies that barely miss or just make analyst earnings, while only one in 27 is injured at companies that miss or comfortably beat them.
There are two ways in which earnings forecast relate to workplace safety:
- High workload
- Cuts to safety-related expenditures
Safety Often Compromised in Exchange for Higher Efficiency
When businesses become aware of a high likelihood that they may miss their forecasted earnings, they are likely to push their employees to work harder and faster, often including long hours. Additionally, in an effort to improve efficiency, often times employees may compromise their safety by overexerting themselves and ignoring proper protocols if they slow down the ability to get things done quickly.
With so much pressure and attention focused on the company’s financials, the safety of the company often suffers. Managers may not pay as much attention to any existing safety issues and may not spend the time and resources to keep employees safe. Without making safety a priority, injuries often increase.
Unionization and Injury
Companies that beat their benchmark in industries that have high unionization, usually have 6.4 percent lower injury rates than those with low unionization. Unions often work to protect the employee. They often negotiate safer protocols and encourage safer work environments. They can also report any safety issues to their union representatives.
Workers’ Compensation Premiums and Injury
Of the companies that beat their benchmark, which are also located in states with high workers’ compensation premiums, injury rates are almost five percent lower than those in states with low workers’ compensation premiums. This demonstrates that in states where injuries cost the company more money, they appear to also be more diligent and aware of employee safety.
State Contractors and Injury
Additionally, companies that do a lot of work with the state or federal government are usually ordered to maintain adequate workplace safety benchmarks if they are to be allowed to submit bids. These requirements seem to encourage companies to pay attention to employee safety.
When companies focus more on financial benchmarks than employee safety, it often costs the company fines, litigation, bad publicity, and higher premiums for workers’ compensation. In these situations, it may cost employees pain, lost wages, and in the worst of cases, their lives.
What Can You Do?
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