Safety Inspections: Bad for Business, or Improving the Bottom Line?

Although no one really likes OSHA inspections, and complaints abound about the expense of compliance with regulations, a recent study conducted by the journal Science shows that workplace safety and health inspections by OSHA not only save lives, they also decrease workers compensation costs and actually do not hurt the bottom line.

OSHA frequently receives criticism from both organized labor and big business, with one side claiming that the organization doesn’t do enough to protect workers, and the other bemoaning what it says are unnecessary costs.

Three professors from the University of California, Harvard Business School and Boston University say they set out to answer a simple question: Do government regulations kill jobs… or protect the public?

The study took 409 California industries that had high injury rates and were inspected by California OSHA from 1996 through 2006, and compared the results of those businesses with 409 similar companies that were not inspected in that time period. Companies undergoing random inspections saw a 9.4% decline in injury rates, and a 26% reduction in injury costs.

“Our study suggests that randomized inspections work as they’re meant to, improving safety while not undermining the company’s ability to do business,” says Michael Toffel, environmental management expert at Harvard Business School. “Now we’d like to get more data to see exactly how inspections reduce injuries, and to investigate what kinds of companies would get the most or least benefit from safety regulation.” According to Toffel, his interviews show that injuries decrease after inspections because the inspectors talk with operators and make sure they understand what the problems are and then discuss ideas for fixing them.

Read the full article at the Insurance Journal.