New research by the European Agency for Safety and Health at Work suggests economic incentive schemes encouraging companies to invest in risk prevention are a cost-effective option for governments looking to curb work-related accidents and illnesses.
The EU-OSHA report on economic incentives was launched at a conference of the International Occupational Hygiene Association entitled ‘Health, Work and Social Responsibility’ in Rome on Wednesday. Many EU member states already offer various financial rewards for businesses investing in keeping employees safe. These range from lower insurance premiums, state subsidies and grants, to tax breaks, and preferential terms for bank loans for the best-performing businesses.
Three out of 14 case studies highlighted in the project provided sufficient data to conduct a cost-benefit analysis. All three resulted in a positive payout ratio, ranging from €1.01 to €4.81 return for every euro invested. Quantitative criteria covered accident rates, sick leave, and general improvement in working conditions.For instance, an incentive scheme introduced in the German butchery sector in 2002 led to a 28 per cent fall in reportable accidents over the following six years compared to a 16 per cent fall in the sector as a whole. This means there were about 1,000 fewer accidents per year in incentivised companies.
According to EU-OSHA director Jukka Takala, “our economic incentives project has already encouraged different EU member states to learn from each other, and exchange good practice in designing incen-tive schemes. The report shows economic incentives can be effective in all member states, regardless of wide differences in their social security and accident insurancesystems.”
As a result of the project, the Italian workers’ compensation authority INAIL has developed a new incentive scheme which takes into account the experiences and good practice of other countries. With a budget of over €60 million the INAIL scheme is particularly targeting small and medium-sized enterprises and, according to expert estimations, could lead to a benefit of €180 million at society level. The new EU-OSHA report reflects a growing interest in economic incentives as a means of motivating organisations to invest in occupational health and safety.
There is increasing recognition that enforcement of regulations is not enough on its own if the EU is to reach the target of a 25 per cent reduction in workplace accidents set out in its Community Strategy on Health and Safety.
The report and a factsheet are available at http://osha.europa.eu/en/topics/economic-incentives.