Health and Safety
Occupational health and safety PDF Print E-mail
Written by BSI Management Systems, July 2004   
Defined within the Occupational Health and Safety Assessment series of standards as: "The conditions and factors that affect the wellbeing of employees, temporary workers, contractor personnel, visitors and any other person in the workplace", occupational health and safety affects every workplace, employee and employer.

The business case

At a macroeconomic level there is substantial evidence1 that poor health and safety practices represent a significant cost to the economy and that improving health and safety has a positive impact on economic performance. However, the costs to companies are hidden by the fact that the National Health Service provides free treatment at the point of delivery. Costs only become visible in the form of insatiable demands for NHS funding through the taxpayer.

Accidents and injuries grab the headlines and inevitably, companies focus on prevention in the form of various high-profile safety initiatives. The UK's Health and Safety Executive (HSE) is now keen to shift the focus to health. While less spectacular, the social and economic damage caused by work-related ill health is in many ways more significant than accidents. Stress, bad backs, repetitive stress injury (RSI) and other largely work-related conditions are estimated to affect some two million workers in the UK.

Statistics published in the Occupational Health Bulletin 2002/2003 show that an estimated 33 million working days were lost from the UK economy. The two main causes are stress/depression/anxiety and musculo-skeletal disorders resulting in 13.4 million and 12.3 million days lost respectively.

Occupational health and safety can no longer be viewed as the exclusive domain of a small team of 'OHS' experts. All employees and organisations are affected and risk profiles can have a significant impact on the bottom line. A poor safety record means that today's insurance premiums will be high. Tomorrow, the business may no longer be viable and a brand that has taken many years to create might be destroyed overnight by hostile publicity. All other factors being equal, who would choose to travel with an airline known to have a poor safety record or buy a new car with low crash-test ratings?

Legislators and regulators

The World Health Organisation (WHO)2 recognises occupational health as one of its fundamental priorities, and has set out a global strategy with eight major priority areas:

   1. Strengthening of international and national policies for health at work;
   2. Promotion of a healthy work environment, healthy work practices and health at work;
   3. Strengthening of occupational health services;
   4. Establishment of appropriate support services for occupational health;
   5. Development of occupational health standards based on scientific risk assessment;
   6. Development of human resources;
   7. Establishment of registration and data systems and information support;
   8. Strengthening of research.

Occupational health is a fundamental part of the European Community strategy on safety and health at work. This is made apparent in communications from the Commission. A new Community strategy3 on health and safety at work 2002-2006 advocates that we adopt a global approach to wellbeing at work, taking account of changes in the world of work and the emergence of new risks, especially of a psychosocial nature. With proposals for a directive on bullying and violence in the workplace, and consultation with social partners on the issue of stress-related conditions, the Commission is establishing stress as a key issue in the management of occupational health and safety.

Following a series of high-profile accidents on the UK's rail network, there is growing public concern at the lack of success of UK criminal law in convicting companies of manslaughter where a death has occurred due to gross negligence by the organisation as a whole. The debate on accountability rages, with the Government and many business leaders preferring to hold organisations to account while critics argue the case for a 'Corporate Killing' bill to focus on individual directors.

The investors' perspective

Historically most pension funds have had little focus on health, safety and environmental issues. However, recent pension fund regulation on the topic of disclosure has meant that both the pension fund and investment management community are more interested in socially responsible investments.

Mainstream pension funds now expect the boards of companies in which they invest to work to the spirit of Turnbull4 guidelines. This means that they expect the boards to have considered and be actively managing risks associated with these issues. Occasionally, fund managers may raise social and environmental issues with companies, checking that the board is properly managing such issues.

A smaller but growing number of funds take social and environmental issues into account when they are selecting companies for their investment portfolios. This can be driven from two perspectives: ethical funds require exemplary management of social and environmental issues as a prerequisite whilst other investors see them as indicators of well-managed businesses. This is of particular interest where health and safety data can be linked to financial performance.

From a negative perspective, investors consider that poor health and safety risk management suggests a generally weak approach to risk management and therefore an increased financial risk of unexpected liabilities. It can also be seen as an indicator of employee morale and the respect shown by the company to staff, potentially linking to the concept of measuring human capital and the state of corporate culture.

A clear message from investors is that they do not see themselves as "policemen" in this area. A growing number of investors are concerned that they are being pressurised by Government to "enforce" health and safety within companies.

The skills gap

Occupational health means far more than providing conventional primary healthcare to workers (and at the workplace). It is a preventive activity aiming at identification, assessment and control of hazardous factors in the workplace and generation of competent and effective actions to ensure a healthy work environment and healthy workers. Such activity cannot be carried out with primary health care competence alone; specialised occupational health competence and knowledge of the real needs (e.g. knowledge on industrial and other chemicals, physical factors at work, ergonomics, safety, work psychology, occupational medicine) of the working life are needed.

It is apparent that the scope of occupational health embraces a wider variety of issues, skills and competencies, much more so than what is traditionally labelled safety issues. The health and safety professional needs to be fully aware of these issues, they cannot be ignored as statistics show that ill health is now a much larger problem to tackle than in the past. The old guard of health and safety professionals generally come from backgrounds in high safety risk industries (building and construction, petrochemicals), not necessarily the high health risk industries (transport, food, waste). With the rise of the service sector bringing issues such as the increase of peripatetic working and emergence of issues such as stress, awareness and knowledge needs to be increased. The majority of professional bodies and stakeholders have recognised this.

The Confederation for British Industry advocated in December 2001 that business management of occupational health and rehabilitation should be improved, remarking that 30 per cent of employers do not give occupational health provision5. Unfortunately, a subsequent report on preventive services, prepared by Laurent Vogel and published within the TUTB Newsletter of June 20036, paints a rather damning picture. Although the report embodies a trade union slant, it suggests that the number of UK workers with access to preventative services was found to have fallen "dramatically". Specialised health and safety staffs exist in about half of the firms with organised prevention activities and it claims that companies "do not have the development of preventative services as a priority".

Management attitudes

Given that business schools can be considered as the source of the next generation of business leaders, it is perhaps surprising that so little time is devoted to the topic of health and safety. Coverage of occupational health and safety on full-time MBA courses in UK business schools was commissioned by the HSE7, which found that "the explicit occupational health and safety content of the eight MBAs was either nonexistent or very limited" and "MBA staff tended to think that occupational health and safety was vitally important in major hazard industries but a bureaucratic, legalistic imposition for most other organisations". Even where they recognised that occupational health and safety was an important corporate goal, business educators had not fully made the link between safety management and the management skills taught on MBA programmes. They questioned the academic rigour of the subject, and did not perceive occupational health and safety as a topic worthy of inclusion in a postgraduate course.

Fortunately, employers are generally beginning to take a more enlightened attitude towards the subject. For example, the Engineering Employers Federation (EEF) recognises that occupational health is such a serious issue for UK Manufacturing and Engineering Companies, that it appointed a Chief Medical Advisor in 2002 and has in place an Occupational Health Strategy.

Tools, techniques and standards

Research by Manley8 suggests that companies should report against the following set of indicators to demonstrate best practice levels of health and safety management. These indicators have been chosen because they satisfy the data needs of investors whilst offering comparability across various economic sectors. They provide a broad overview of health and safety performance at a company level, and should allow investors to work out whether the issues are being managed appropriately:

   1. Appointment of a director with the responsibility to be the health and safety champion;
   2. The levels at which health and safety management systems are reported;
   3. Number of fatalities;
   4. Lost time injury rate;
   5. Absenteeism rate;
   6. Cost of health and safety losses.

A standard methodology needs to be agreed to calculate and report indicators 4,5 and 6, with significant input from qualified accountants on indicator 6.

Organisations are generally able to identify and calculate the direct costs associated with injury and illness. They find it far more difficult to relate specific incidents to indirect costs borne by separate departments. These include lost production caused by an accident, lost revenue where a client cancels a delayed order and damage to tangible assets including product and plant. Indirect costs can be between 6 and 53 times as large as the direct costs. For a company that has lost £20,000 in one year due to injury and illness costs, typically it will incur additional losses of £120,000 to £1,060,000. The scale of the costs will depend on the type of industry in which the organisation operates.

Meanwhile, the Environmental Standard ISO14001 and the Occupational Health and Safety System OHSAS18001 have introduced the concept of a risk-based approach to management systems standards. The standards are designed to enable organisations to identify, evaluate and manage (through reduction and elimination of) the risks they face.

As a result of adopting these process- and risk-based approaches, organisations improve their focus on the requirements and expectations of their stakeholders including customers, regulators and employees. They are also in a better position to manage the way in which they interact with their physical environment as well as looking after the health and safety of people at work. Thanks to the use of performance measures, organisations can measure progress against objectives. This in turn can be used to help drive continual improvement, competitiveness and therefore success in an increasingly demanding environment.

Organisations that have successfully applied ISO 14001, the environmental management system standard, have undertaken an environmental review of which an integral part is to consider significant environmental aspects relating to emissions to air, releases to water, waste management, contamination of land, use of raw materials and natural resources as well as local environmental and community issues. The mindset in such an organisation is repositioned to manage its environmental risks in a systematic manner and what is often a key stakeholder expectation: managing risk and preventing loss with respect to the environment.

The use of OHSAS18001, the occupational health and safety management system specification, by organisations demonstrates that they have identified hazards, performed a risk assessment relating to personnel and facilities in the workplace as well as having put in place programmes to manage these risks. Organisations working in this way address another key stakeholder - the people within the organisation, helping to establish a culture of risk management.

Conclusion

Harming employees is socially unacceptable and increasingly expensive. Legislation has meant that safety in the workplace has received a considerable amount of attention and accident rates are being driven down. Potential legislation regarding Corporate Killing will reinforce the need to take safety seriously at board level. Similarly, tough safety requirements are being built into products to ensure that they won't harm the user. Building on this success, the focus now is switching to risk management in the context of occupational health and safety. Long-term chronic injuries caused by repeated exposure to apparently minor irritants including dust, noise and stress are now coming under the microscope. Insurers, investors, Turnbull and the Combined Code require companies to have clear systems for managing risks, reporting to stakeholders and shouldering responsibility.

References

   1. Davies & Teasdale, "The costs to the British economy of work accidents and work related disease", HSE Books, 1994
   2. World Health Organisation Global Strategy on Occupational Health for All The Way to Health at Work
   3. Communication from the Commission, "Adapting to change in work and society: a new community strategy on health and safety at work 2002-2006"
   4. "Internal Control: Guidance for Directors on the Combined Code" (Turnbull Report), Institute of Chartered Accountants in England & Wales (ICAEW)
   5. CBI Healthcare Brief, Confederation of British Industry, December 2001
   6. European Trade Union Technical Bureau for Health and Safety, "Special report: Preventive services", TUTB Newsletter, June 2003, No.21
   7. Summary and findings of a research project carried out by the Royal Society for the Prevention of Accidents in conjunction with Professor Richard Booth and Janine Hawkins, Aston University http://www.hse.gov.uk/policy/mba.htm
   8. Mark Manley, "Health & safety indicators for institutional investors", HSE, February 2002
 
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