Adhering to health and safety standards 'can save firms money'

21 May 2012

Posted by John Bull

Meeting high health and safety standards can save money for an organization, it is claimed.

A new study carried out by researchers in California found that rather than harming profits, Government enforcement of regulations can save lives without affecting revenues.

Covering hundreds of sites in the state over a decade, the Harvard Business School examination looked at workplace safety inspections conducted by the California Division of Occupational Safety and Health.

It looked at the cost to companies of compliance and discovered that within high-risk industries, those that had been inspected reduced injury claims by 9.4 per cent and saw compensation costs to employees cut by 26 per cent, with no apparent impact on profits as a result of inspections and improvements.

Reporting the findings in the journal Science, Harvard Business School Professor Michael Toffel stated: "The overall message of our research is that these inspections worked pretty much the way one would hope. They improved safety and they didn't cost firms enough that we could detect it."

One area in which British companies can save money and still ensure they are compliant with health and safety regulations is to reduce the level of wasted electrical safety tests carried out each year.

The Health and Safety Executive (HSE) reported recently that an estimated £30 million per annum is being spent on unnecessary testing in this area, with the agency noting it is a myth that all electrical appliances in workplaces must be tested each year.

Some testing companies were criticised for misleading advertising and advice leading to businesses having more stringent maintenance regimes than the law requires, with legislation simply stating that electrical equipment must be maintained to safeguard against danger.

New guidance states that in a low-risk environment, checking gadgets for signs of damage such as frayed cables can safeguard employees and Judith Hackitt, Chair of the HSE, explained the body has "always advocated a proportionate, risk-based approach to maintenance".

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