We’ve all had that one class in school where the possibility of a pop quiz seemed to always keep us on our toes. You studied harder, stayed awake during lectures and always showed up to that class on time. The workplace equivalent to a pop quiz would be the feared random OSHA inspection. Scary as they might sound, it seems they might actually have the same effect on us. A recent study from Harvard University and the University of California showed that random safety inspections save lives and money of those who receive them.
The Study
The study, “Randomized Government Safety Inspections Reduce Worker Injuries with no Detectable Job Loss,” was published in Science, one of the top scientific peer-reviewed journals. The group of researchers included Professor Michael Toffel of Harvard Business School, Professor David Levine of the Haas School of Business at the University of California, Berkeley and Boston College doctoral student Matthew Johnson. They examined safety inspections conducted by California’s Division of Occupational Safety and Health (Cal/OSHA), on 409 California businesses selected randomly from 1996 through 2006. For comparable data the team examined 409 similar workplaces that were eligible for inspection but weren’t inspected during that time period.
The randomized inspections provided a perfect natural experiment that uses the power of randomization just like a medical clinical trial. Because Cal/OSHA typically inspects facilities following complaints or recent accidents, you can’t study those inspections to get an unbiased understanding of whether they make a difference. By studying the inspections Cal/OSHA conducted at workplaces selected at random, we were able to overcome this problem to learn the actual impact of inspections.
-Michael Toffel
Critics have argued for some time that OSHA regulations destroy jobs without making meaningful improvements in workplace safety. However, the results say otherwise.
The Results
Some of the key results from the study are as follows:
- Workplace injuries dropped 9.4% at randomly chosen businesses in the four years following the inspection, compared with employers not inspected.
- The randomly chosen businesses saved an average of 26% on workers’ compensation costs compared with employers not inspected.
- The average employer saved $355,000 (2011) as a result of an OSHA inspection.
- No discernible impact on companies’ profits.
The study took several years to compile the necessary data needed to complete the research. They used data on injuries, which was important, but also focused on other factors to see if in fact inspections led to problems they are often accused of. Of most concern was whether or not inspections led to increased costs that lead to the elimination of jobs. The three researchers looked at company survival, employment, sales and total payroll to see if in fact inspections are a cause of job loss.
Across the numerous outcomes we looked at, we never saw any evidence of inspections causing harm. 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.
-Michael Toffel
In fact, Toffel’s first estimate was that if OSHA inspections like these were implemented nationwide it could save employers up to $6 billion annually. A revision to that statement has been changed to include a new estimate of a $20 billion annual savings to employers.
OSHA’s Response
The conclusion strongly backs OSHA’s claim they have been making for years that its practice of random inspections not only prevents job loss but make the workplace a safer for employees. If anything the random inspections are actually adding value to the organizations they inspect.
This came as no surprise to Dr. David Michaels, head of the Occupational Safety and Health Administration who through the Official Blog of the U.S. Department of Labor responded to the findings.
The findings should finally put an end to the criticisms that OSHA inspections make running a business more expensive without adding value. The results are in: OSHA save lives and jobs!
-Dr. David Michaels
My guess is the criticism will never go away, most small and large business owners dislike the idea of someone else telling them how to run their business. I would hope however, that the study will at least allow those that are opposed to OSHA inspections to open themselves up for discussion. The benefits are there and have been there for employers to use for years. The difference is, now there’s clear evidence.
Additional Resources
- Workplace Safety Inspections & Audits– creativesafetysupply.com
- Do Companies Save Money by Outsourcing?– 5snews.com
- Warning Tapes Ensure Safety and Help Save Money– blog.creativesafetysupply.com
- Lack of Sleep Costing Employers Billions– safetyblognews.com
- The Benefits of Equipment Inspections– blog.5stoday.com
- Safety – Good for People and Business– realsafety.org
- Toyota Donates What Money Couldn’t Buy: Efficiency– kaizen-news.com
- What you Need to Know About OSHA– bridge-to-safety.com
- Safety and Productivity Works Together– lean-news.com