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6 Reasons Why Big Companies Don't Spend Money on Safety

Greg de la Cruz works in the tech industry and is the author of two published titles on Amazon.

Why don't big companies see value in creating a safe work environment?

Why don't big companies see value in creating a safe work environment?

Don’t Be a Safety Officer if You're in It for the Money

You’re not likely to find a handsomely paying job as a Safety Officer on any job board.

Let me try to express this in the least offensive way possible, but bereft of sugarcoating—if you’re a safety professional with either zero, multiple, or even significant years of experience, companies will rarely pay you what you deserve.

In most cases, your job’s just a regulatory requirement. Or a nice-to-have because of some certification your company’s chasing for marketing and PR. And this means you’re likely to get a smaller slice of the pie that is a company’s staffing budget.

Should this discourage you from pursuing a career in the field of health, safety, and environment (HSE)? I sure hope not. Because your value in the business world is still intact—you just have to make your organization see it. And this, unfortunately, is not an easy ask. And sometimes, your company’s leaders will choose to turn a blind eye when it comes to safety. Worse—they’ll communicate their commitment to safety but not actually do things or provide resources to support it.

What follows are six reasons why companies don’t put money into safety—whether it’s towards personnel, programs, or equipment. Supporting the assumption that investing in safety just isn’t worth it, a 2020 study from Oregon State University that was published in the Management Science Journal indicated that “in general, organizations that provide a safe workplace have significantly lower odds and length of survival.” And in addition, these organizations that had better survival odds would benefit most from not providing a safe workplace.

A 2020 Study Suggests: More Worker Injuries Means the Survival of Your Business

In the construction industry, it makes total sense to care about safety. The job is hazardous by nature, and more importantly (for the business), lost days on the job means delays, inefficiencies, and more cost and hassle. In this field, it’s normal to employ multiple safety personnel—and there’s an ideal ratio for how many safety people per productive people.

In the automotive industry, manufacturing, and logistics—it probably still rings true that lost days on the job means lost dollars, but probably not as much as in construction. But how about the rest of the other fields? What if a study pointed to the conclusion that allocating more money to keep a workplace safe doesn’t make it likely that the business will survive?

That’s what the collaborative study between researchers from Oregon State University Public Health and Human Sciences, Ohio State University, University College Dublin, and Universitat Ramon Llul found. In the paper “The Tension Between Worker Safety and Organization Survival,” published in May 2020, the researchers found “that employers with workers compensation claims survived up to 56 percent longer than those employers who filed no claims,” says F.J. Thomas of the Workers’ Compensation Institute.

The researchers analyzed more than 100,000 Oregon-based businesses and reviewed survival over the course of 25 years. The indicator for survival was whether the company was able to continue operations or not.

They found that businesses with workers’ compensation claims survived up to 56 percent longer than those who filed no claims—and the results were stronger among larger, well-established organizations.

Younger and smaller businesses were more likely to be impacted by high claim costs than the larger, more established ones—and this caused the former to invest in safety programs. But the researchers believed that these small businesses had fewer resources.

Summing it up, one of the researchers, Anthony Veltri, who is an associate professor from Oregon State University, says, “Organizations that do not provide a safe workplace gain an economic advantage over those that do. The goal of improving the longevity of a business conflicts with the goal of protecting the workforce.”

With this surprising idea in mind, it’s easier to understand why there’s little commitment from company executives when it comes to putting money on safety—and here are six reasons why they don’t.

6 Reasons Why Companies Don’t Invest in Worker Safety

  1. Safety is an afterthought
  2. Ease of risk management
  3. Safety is perceived as auxiliary and non-essential
  4. Benefits don’t apparently translate to business results
  5. Tendency to create unproductive bureaucracy
  6. Innate but false belief in common sense

1. Safety Is an Afterthought

Caring about workplace environment, health, and safety is an afterthought for company leaders.

The actual money-making operation of a business comes first, and everything else comes second. Well, of course, except for safety—because it usually comes last. Business support such as human resources, information technology, property management, and administrative functions all serve to ensure that business operations remain intact, unhampered, streamlined, and running in the best shape it can be. But safety? Meh. Maybe when a work accident finally happens that costs the business something—maybe then, will company executives pay close attention to safety.

Sadly, safety is an afterthought for many businesses. There’s no exact figure on how many companies consider safety as non-essential in running the business, but there are informative figures from the Bureau of Labor Statistics on the money they spend on safety management. And for the Philippines which is where I come from, there’s the Department of Labor and Employment (DOLE) which requires every employer to self-declare its annual expenses on occupational safety and health (OSH).

There are mandatory OSH programs. There are also penalties for not having or implementing OSH programs. This means that if your company doesn’t spend upfront to keep the workplace safe, they’re going to spend it anyway in the form of fines.

But does all of this stop safety from becoming an afterthought? Nope. I see job openings for Health, Safety & Environment Officer, and they pay near minimum wage. Most postings are entry-level unless they’re for safety managers who oversee entire conglomerates. There’s hardly a C-Suite position on any company for EH&S. Well, there may be C-Suite seats available for ESG VPs—but not for safety alone. Because ESG is the sexy term, and it’s woke, and it gets investors interested.

But safety? It’s probably cheaper to pay those injury claims.

2. Ease of Risk Management

Accepting safety risks is easier to manage than spending money to go beyond what’s required by regulations.

Also known as risk retention, risk acceptance “occurs when a business or individual acknowledges that the potential loss from a risk is not great enough to warrant spending money to avoid it,” says Will Kenton in a 2021 Investopedia article.

Kenton adds that risk acceptance “posits that infrequent and small risks . . . are worth accepting with the acknowledgment that any problems will be dealt with if and when they arise.”

Risk acceptance is a technique in business management that aids leaders in prioritizing their budgets. And that’s the thing about putting money on safety—at the end of the day, it’s just a line item. Executives will either mitigate the risk by flushing it with cash or accept most of the risk by paying the minimum.

In the construction industry, for example, especially in colossal infrastructure projects, it’s simpler to allocate for the cost of human lives from work accidents than it is to allocate resources, hire, design, and incorporate safety in all of the work. There’s a little bit of both at play, but just how much investment is enough?

The common practice is to simply meet regulatory requirements and stop there—hire the minimum number of safety engineers, for example, buy just enough PPE (and reuse, even recycle), hire outside consultants to create safety documentation as required by law, but all in all barely go beyond the statutory minimum.

3. Safety Is Perceived as Auxiliary and Non-Essential

Safety management in the workplace is viewed as a non-core, non-essential business function.

The Department of Labor and Employment made it clear under its Department Order 198-18 that safety officers must be organic, regular employees of the company. And if they weren’t clear enough, they released FAQs, wherein one answer said:

“No. Safety Officer as certified by the company must be a regular/organic employee or officer of the company who has knowledge on the operation of the company and tasked to oversee the overall management of the OSH program in coordination with the OSH committee.”

The need to explicitly state this in not just the law itself—but in the implementing rules, the FAQs, and in seminars—shows you the perception on the ground. Company leaders view safety as auxiliary to the business; they don’t see it as an essential part. To echo Reason No. 1, safety is an afterthought, and the view was that you could hire contractors to “do safety for you” the way security, housekeeping, and gardening workers are hired on an as-needed basis.

Some leaders will overcommunicate the message that the company truly cares about employee safety with a buzz phrase like safety first but actually view it as outside of a normal business operation, as shown by the idea that you can outsource duties to an outside party.

4. Benefits Don’t Apparently Translate to Business Results

The benefits of implementing better safety practices and putting money into it are not tied well with business outcomes.

Seasoned safety professionals believe in safety metrics and KPIs, but do company executives buy them? The problem with the benefits that organizations get from good safety management is that they don’t translate to business results, at least in an apparent way.

“Who cares if you completed regular audits and addressed unsafe conditions, did they get us more money?” argues a pragmatic yet narrow-minded company leader, who we’ll call Whitehead for illustration purposes. Here’s what I mean:

  • Zero accidents for the whole project duration? Whitehead’s interpretation: Congrats, your workers finished the project with their limbs intact, and everyone’s still breathing. Now what?
  • Lost Time Injury Incident Rate (LTIIR) of less than 1? Whitehead’s interpretation: Convert LTIIR to USD, then you have my attention.
  • A very high eNPS (Environment Net Promoter Score) after a round of surveys? Whitehead’s interpretation: Leave worker satisfaction to HR. You work in safety; you shouldn’t care whether workers are happy.

There’s a clear gap between the safety metrics that professionals are measuring and the kind of metrics that company executives appreciate. Much work still has to be done to reconcile this difference in perspective.

5. Tendency to Create Unproductive Bureaucracy

Investing in safety is seen as spending money to promote bureaucracy in people’s work due to strict processes and methods that need to be followed.

Adding to the resistance of paying more for safety is the tendency to make work far more bureaucratic than it needs to be. International safety standards such as ISO 45001 are all for making the workplace safe in a world-class way, but if applied in the wrong manner, all these “controls” will end up being piles of paperwork.

Some organizations are already bureaucratic by default, and to implement (and pay for) safety programs that worsen this bureaucracy just doesn’t hold up. Take for example work permit systems—common sense dictates that if you have a documented approach to making sure that work, especially hazardous work, have safety measures integrated and are only performed by competent people under the safest of conditions, then work permit systems must be implemented without question, right?

But on the other hand, there’s an argument that work permit systems are implemented only so you can pin blame in the end on someone or something that goes wrong along the way. It’s like a manual black box that’s recorded by hand.

Common sense dictates that competent workers won’t do anything stupid, and so says the detailed work instructions and declarations outlined on your novelette-thick work permit.

You see why companies don’t want to spend on safety—there are some safety professionals out there who make the whole process bureaucratic just so they can feel important, because when the paperwork’s thick enough, so is their ego fed enough.

6. Innate but False Belief in Common Sense

When businesses can’t spare a dime for safety, there’s an innate belief that a worker’s common sense will ultimately keep them safe at work.

Unfortunately, common sense isn’t as common as we’d like it to be. With new technologies that pose their own novel hazards, you just can’t trust people’s common sense anymore. We’re not evolved enough for that. But why does management argue that, ultimately, common sense will prevent work accidents?

It’s a symptom of a company leader being out of touch with its constituent workers, and we can hardly blame them for it. They’ve got the investors, the members of the board, the competition, the yacht on rental, the country club membership, and maybe a timeshare on a private island?

The point here is not to hate on the perks that come with being a high-ranking corporate leader—instead, it’s acknowledging that these are people of high privilege we are dealing with. They shouldn’t be expected to know on a personal level what ordinary orderlies go through on a regular basis. They’re way too high up.

That’s why their innate belief in common sense often ends up being false—because common sense is different for them.

Should You Pursue a Career in EH&S?

If you’ve reached this point of the article, having diligently read through everything, then maybe you’re thinking of not pursuing a career in EH&S anymore. Or perhaps you now want a course correction and would like to work in a field where your job function is valued.

And if you ask me, there’s nothing wrong with that. If you started as a lowly safety officer being paid borderline minimum wage and trying to work your way up to an entry-level salary, up until they can’t raise your pay any more—it’s not your fault for wanting to try something else.

The key message of this article has been that companies just don’t see the value in putting money into safety. They’d rather spend for fines, settlements, and class action lawsuits—as they did with asbestos and lead-acid battery factories. The system needs changing, and we need more evidence to fight a stubborn system.

This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

© 2022 Greg de la Cruz