OHS – the missing element in productivity debate

On 7 August 2012, the Victorian Premier, Ted Baillieu, verbally attacked the Federal Government over its COAG program and lack of support for  productivity initiatives.  The criticism of productivity sounded odd as the Victorian Government has dropped out of the reform program for occupational health and safety laws yet OHS is understood to have a positive effect on productivity. More clarification was needed on this understanding.

In April 2012 the Productivity Commission, an organisation favoured by Premier Baillieu, discussed OHS reforms in Australia.  that

“Improved health and safety outcomes achieved in practice would then lead to benefits for businesses (such as increased worker productivity, reduced worker replacement costs and reduced workers’ compensation costs), workers (increased participation, reduced medical costs among others) and society more generally (though reduced public expenses on health, welfare and legal systems).” (page 170)

For years there has been a debate about safety versus productivity.  Partly this stemmed from the taking of shortcuts on safety in order to satisfy production.  In the short-term, it was perceived that safety could be an impediment to production – take the guard of a machine, run the line speed faster than recommended, “don’t worry about the faceshield, just get it done”.  But safety professionals have been arguing that this risky behaviour masks the real problem of  not integrating safety management into the business operations and seeing safety as an optional add-on, or something applied when the boss is watching.

The recently released OHS Body of Knowledge provides some relevant insights on the productivity benefits of safety management that deserve better and broader communication.

Leo Ruschena  of RMIT University writes about cultural change in Australian’s mining sector:

“in the late 1990s when another large mining organisation in the Pilbara tried to follow this example to improve productivity and sought to force its employees onto individual employment contracts, it caused tremendous resentment in the workforce, which soured relations between management and workers for many years.  This subsequently resulted in OHS initiatives being adversely viewed by the workforce as merely management attempts to improve productivity, regardless of their OHS effectiveness (Ritter, 2004).” (page 14, emphasis added)

It can be argued that this level of worker suspicion is common and productivity initiatives are often perceived as “screwing the workers”.

Ruschena also states that:

“To achieve the best productivity and safety outcome, organizations need to optimize both technology and social sub-systems,” (page 15)

and

“Returning to the government’s desire to foster productivity and innovation in Australian workplaces (Boedker et al., 2011), there is evidence that an organisational culture focused on safety (Hopkins, 2005*; Zohar, 2010**) contributes to health and safety and organisational performance” (pages 11-12, link added)

Bill Pappas, Carlo Caponecchia and Eleanor H Wertheim, in their BoK paper The Human: Basic Principles of Social Interaction, acknowledge the lack of attention on OHS and productivity:

“A large amount of research has applied social psychology principles to organisational behaviour, such as leadership dynamics, decision-making and productivity in the workplace. However, the application of these principles to OHS has been limited and needs further development.” (page 2)

The paper on Psychosocial Hazards: Bullying, Aggression and Violence by Kïrsten A Way repeatedly states negative impacts on productivity through workplace bullying, an important consideration for the current national inquiry into workplace bullying in Australia.

The international context and support for the Australian evidence is not difficult to locate.

In 2009 Petra Ulshoefer, Regional Director, Europe and Central Asia, International Labour Office (ILO), Geneva, Switzerland told the International ILO Safety Conference in Düsseldorf, Germany (Abstracts) that

“Having a job in good and healthy conditions increases the quality of working life and contributes to higher productivity.”

Sylvie Siffermann, Labour Director, Ministry of Labour, Département L‘Indre-et-Loire, Tours, France said that

“Health is a crucial aspect that feeds back into company employment and productivity.”

Maureen Shaw, International Advisor and formerly President and CEO of IAPA (Industrial Accident Prevention Association),Ontario, Canada said

“Productive people equal productive organizations. When an individual suffers whether it be physical or psychological injury or illness, then their productivity and quality and effectiveness suffers and as a result, by extrapolation the organization’s productivity, quality and effectiveness suffer.”

Wiking Husberg, International Labour Office (ILO), Subregional Office for Eastern Europe and Central Asia, Moscow, Russia said

“Employers’ Organisations have realized the direct link between safe work and productivity.”

US research report from 2008 stated there was a notable correlation between OHS and productivity and called for further research to provide conclusive proof

“Following workplace safety initiatives, the studies revealed an average increase of 66% (2%104%) in productivity, 44% (4%73%) in quality, 82% (52%100%) in safety records, and 71% (38%100%) in cost benefits. In a few reported cases, it took only 8 months to obtain a payback in terms of monetary investment in the safety initiative. Although the studies did display a correlation between safety, productivity, and quality, there is insufficient evidence to categorically state that the improvements in productivity, quality, and cost efficiency were brought about by the introduction of an organization-wide safety culture.

Notwithstanding, there is demonstrable evidence to indicate that safety as a business objective can assist an organization in achieving the long-term benefit of operational sustainability, that is, achieve a long-term competitive advantage by balancing business costs against social costs.”

It would have been good if one of the safety associations had entered the COAG/productivity debate pointing out the lack of support from the Victorian Government for the productivity benefits that could be gained by the active implementation the OHS reforms through the harmonisation process.  The trade union movement may have been better equipped to enter the fray but it rarely argues on productivity issues from the safety perspective.  Perhaps this blog can make a difference.

Kevin Jones

* Hopkins, A. (2005). Safety, culture and risk: The organisational causes of disasters. Sydney, NSW: CCH Australia.

** Zohar, D. (2010). Thirty years of safety climate research: Reflections and future directions. Accident Analysis & Prevention, 42(5), 1517–1522.

reservoir, victoria, australia

3 thoughts on “OHS – the missing element in productivity debate”

  1. We really liked how your post sends the message that there is a direct connection between work safety and productivity. Your contrast of the safety versus productivity perception, that was in place for years, to the productivity by integrating safety it strikingly true. And it really does make a difference when one actually realizes that.

  2. The line I most often use from a movie is, \”Hindsight is 20/20 vision straight out of an a…hole.\” Can\’t remember the movie title, but the line is gold. Recognising that I gotta say, in hindsight, it would seem that OHS-World quite possibly caused a problem for itself, and the cred\’ of work safety by developing what I suggest is an antithetical safety culture: safety as something separate from productivity.

    Wind-back to the 70\’s and it seemed that we had a Western cultural proclivity to look a bit harder at the \”big picture\”, and along with that social environment it became obvious that work safety needed a major kick along. Anyone with a tradie parent would have lots of family stories of how workers were treated as all but disposable back in the 60s.

    So, was the wake-up time about safety the time that we started to get locked into an antithetical safety culture? Quite possibly. Was there a practical alternative to going in with a simplistic, \”safety must always come first\” approach? Quite possibly not. We know that when it comes to monolithic attitudes (e.g. get the job done, bugger safety) sometimes there is no alternative but to keep whacking the big dumb monolith with an even bigger stick and to keep the message simple. Hence, it\’s also pretty likely that the 20/20 aphorism certainly rings true when criticising generation of an antithetical safety mentality. But times change, we learn stuff.

    We know that treating work safety as something \”other\” is not effective. It\’s bleedingly obvious that the best safety is all but seamlessly integrated into the host of productivity oriented decisions that have to be made. I harp on about arborists a lot, but I do that because the best of them are beautiful examples of how safety and productivity is integrated in such a way that it can often be hard to distinguish between a task that is exclusively a safety action and one that\’s a productivity action. And that integration of safety into the work task flow, as opposed to using an antithetical safety approach, isn\’t a modern invention, it just makes sense. But we seem to very slow to make the transition to recognising how integral good safety is to good productivity.

    Yep, we are seeing more reports and studies on the safety/productivity nexus, but it looks as if we in OHS-World, generally speaking, are still locked into safety as \”other\”.* Or perhaps it\’s just a new paradigm, integrated safety, and we are really only just getting our head around it.

    It\’s a pity it took us so long to get our head around it. But then again, hindsight is 20/20 vision straight out of… etc etc.

    * The fairly recent ISSA co-ordinated report finding a 1:2.2 safety cost benefit ratio is a ripper example: http://tinyurl.com/curdy9l

    Col Finnie
    col@finiohs.com

  3. The Australian newspaper reports that Comcare has stated in a submission to the workplace bullying inquiry that:
    \”The increasing cost and complexity of mental harm claims from bullying and harassment puts the federal workers compensation scheme under pressure,\”
    http://t.co/yl4LNcoK

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