Most European countries can benefit from economic incentives in OSH

European countries could benefit from introducing more economic incentives to
promote workplace health and safety, rewarding those organisations that work
hardest to protect their employees. That is the message of the economic
incentive project, undertaken by the European Agency for Safety and Health at
Work (EU-OSHA).

Some EU Member States already offer various kinds of financial rewards for
businesses that invest in keeping their employees safe. These rewards range
from state subsidies and grants, through to tax breaks, preferential terms for
bank loans, and lower insurance premiums for the best-performing businesses.

The European Community strategy 2007-12 on occupational safety and health (OSH)
recognises that there is a need to use economic incentives to motivate
enterprises to apply good practice in their prevention work. EU-OSHA
contributes to meeting this need by providing information on the types of
economic incentives that are most likely to succeed. Research has shown that
external economic incentives can motivate further investments in prevention in
all organisations and thus lead to lower accident rates. For example:

  • An incentive scheme introduced in the German butchery sector in 2002 led to a 28% fall in reportable accidents over the following six years compared to a 16% fall in the sector as a whole. In total numbers this means there were about 1,000 fewer accidents per year in incentivised companies.

  • After the Italian Workers' Compensation Authority began to subsidise bank credits in order to stimulate investment in health and safety among small businesses, the companies taking part in the scheme reported a reduction in workplace accidents of between 13 and 25%.

  • An incentive scheme in the Finnish agricultural sector has slashed the accident rate by 10.2%, preventing over 5,000 accidents so far.

This project gives the clearest indication yet that these types of incentives
are effective, encouraging organisations to improve their occupational health
and safety. According to Elsler et al. 2010, for every euro spent through
incentive schemes, up to EUR4.81 is saved through reduced accident and disease
rates, and lower rates of absenteeism as working conditions improve.

Besides this business case for the incentive-providing organisations, there are
further arguments to introduce an economic incentive scheme, especially for
private or state-run insurance companies:

  • improvement of corporate social responsibility (especially in large companies)

  • improved reputation of the insurance company

  • creating win-win situations with clients

  • competitive advantage (for private insurance companies).

A recently published 'Guide on Economic Incentives Schemes' is intended to
serve as a practical and user-friendly guide to help incentive providers to
create or optimise their own economic incentive schemes. Incentives schemes
should not only reward past results of good OSH management (such as low
accident numbers), but should also reward specific prevention efforts that aim
to reduce future accidents and ill-health. Therefore the EU-OSHA expert group
on economic incentives suggested the development of compilations of innovative
and evidence-based preventive solutions, starting with three sectors:
construction, health care and HORECA.

More information - Source: European Agency for Safety and Health at Work