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Cost mitigation


Calculating the Costs and Benefits of Investments in Occupational Safety and Health in Companies

Occupational safety and health (OSH) programmes benefit employees by preventing work accidents and occupational illnesses. Although essential to the social security of workers, even the best compensation and rehabilitation programmes cannot make up for the loss in quality of life that results from a work-related accident or illness. And over the long term, such programmes have to be financially sustainable. It is only on the strength of effective workplace prevention strategies – geared to reduce the frequency and severity of insured workplace risk events – that potential losses in quality of life can be minimized and the financial sustainability of workers’ compensation and rehabilitation programmes be ensured.


An important question for companies is whether adopting a workplace prevention strategy is beneficial also at a microeconomic level. In this regard, in analysing the economic benefits of prevention measures, a distinction has to be made among the different types of effects of prevention measures: direct (i.e. prevention of accidents at work); indirect (i.e. improvement of public image); short-term (i.e. operating expenses for prevention measures); and long-term (i.e. sustainability of the benefits of prevention measures). 

In 2010, the International Social Security Association (ISSA), the German Social Accident Insurance (DGUV), and the German Social Accident Insurance Institution for the Energy, Textile, Electrical and Media Products Sectors (BG ETEM) initiated an international study on “Calculating the international return on prevention for companies: Costs and benefits of investments in occupational safety and health”. 

The international study looked at the question of how occupational safety and health is beneficial to companies. Answering this core question required that conceptual consideration was given to the idea of prevention accounting. It also required the collection of qualitative and quantitative data regarding the success of prevention. This report summarises the initial results of the study.