Why are companies reluctant to invest in prevention?

Even though the link between employee health and company performance has been demonstrated (see our article “Ergonomics and the Prevention of Musculoskeletal Disorders: What Are the Challenges for Companies?”), many employers are still reluctant to invest in preventive measures and solutions. According to two studies conducted in France and Germany (3), exposure to occupational risks is closely linked to a company’s workforce size. In fact, microbusinesses and small and medium-sized enterprises (SMEs) are much more affected by these risks: they account for 83% of workplace accidents and 91% of work-related deaths. This can be explained by the fact that, unlike large companies, microbusinesses and SMEs generally do not adopt prevention strategies, thereby more readily exposing their employees to occupational risks.

"Microbusinesses and small and medium-sized enterprises are much more affected by these risks, as 83% of workplace accidents and 91% of work-related deaths occur in these sectors."

There are several reasons why companies may be reluctant to invest in the prevention of musculoskeletal disorders (MSDs). First, the challenging economic climate and competitive market encourage companies to prioritize projects that yield quick, tangible benefits and results. Second, these smaller organizations often believe that a prevention strategy would not be cost-effective for them in terms of return on investment. Finally, many of them view their business as being less at risk than a large organization and believe that the likelihood of an accident occurring is minimal.

Furthermore, the positive results of the preventive measures put in place are only visible over the long term, primarily in terms of economic benefits (2). Investing without being able to demonstrate a positive return on investment is therefore a major obstacle for companies that are reluctant to implement a prevention strategy, and most prefer projects whose benefits are felt in the short term.

Prevention is better than cure…

Admittedly, risk prevention is costly, but failing to take preventive measures often proves even more costly for the company. Indeed, implementing solutions to prevent occupational illnesses or workplace accidents is a costly undertaking, and this investment generally takes some time to pay for itself. However, it is even more costly for a company to fail to implement a prevention strategy and leave employees vulnerable to the risk of musculoskeletal disorders.

In the event of an accident or a health issue, the employer will face various types of costs:

• Direct costs : health insurance premiums proportional to the number of recognized claims per year, wage compensation, workplace and job accommodations, on-site medical care, etc.
• Indirect costs : absenteeism rates, replacement of absent employees, loss of productivity, decline in production quality, longer delivery times, etc.
• Intangible costs : increased internal tensions and the risk of conflict, employee burnout, loss of customers, management burnout, etc.

These costs, which affect not only the organization’s performance but also its financial health, could be avoided by implementing a prevention strategy early on.

"It is even more costly for a company not to implement a prevention strategy and to leave employees vulnerable to musculoskeletal disorders."

Yes, prevention pays off for businesses!

Several studies have recently been conducted at various companies to quantify the profitability of the measures implemented (4). These companies have implemented occupational risk prevention measures. The return on investment is then calculated based on the costs incurred relative to the benefits obtained.

In 2010, the International Social Security Association (ISSA) conducted a study of 300 companies from 15 different countries on the following topic: “Calculating the Return on Prevention for Companies at the International Level: Costs and Benefits of Investments in Occupational Safety and Health,” which is based on a cost-benefit analysis. Following this study, the ISSA was able to affirm in 2011 at its 19th World Congress on Occupational Safety and Health (5) that the prevention of occupational hazards is cost-effective:

"In practical terms, this means that companies can expect a potential return of 2.20 euros for every euro invested in prevention, per year and per employee."

The effectiveness of risk prevention has also been demonstrated by the Professional Organization for Prevention in the Building and Public Works Sector (OPPBTP) in its study “An Economic Approach to Prevention—Based on 101 Cases Studied in Companies” (6), which highlights the correlation between prevention and performance. By conducting an economic assessment of the prevention measures implemented at the companies they advised, the agency’s staff found that for 80% of them, the prevention results were rated as “excellent,” with a significant reduction or elimination of risk. Furthermore, for more than 90% of them, the actual economic impact of the prevention measures implemented was deemed positive. In the remaining cases, benefits were indeed observed, but they were not sufficient to cover the investments made.

The results of the OPPBTP study are, however, promising:

• The return on investment for every €1 invested is €2.19, a ratio that is nearly identical to that achieved by the AISS
• One-quarter of the stocks cost less than €5,000 and have returns 10 times higher than average
• The average payback period is 1.5 years, and 1.2 years for small businesses.

What economic benefits can be derived from preventive measures?

While the various studies conducted clearly demonstrate that prevention is cost-effective for organizations that implement concrete measures, it is also important to identify the benefits achieved. The companies participating in the studies cited above noted the following:

• An increase in productivity, which in turn boosts the company’s overall economic performance
• A reduction in the number of workplace accidents
• A reduction in the number of occupational illnesses and musculoskeletal disorders (MSDs)
• A Decrease in Absenteeism
• A reduction in employer contributions to Health Insurance, proportional to the number of recognized workplace accidents and occupational illnesses during the year
• A reduction in operating costs resulting from improved working conditions and the development of new skills in-house, thereby reducing outsourcing costs.

Beyond the Economic Benefits

Risk prevention is therefore economically beneficial and can be measured using the various indicators mentioned above. However, other benefits—which are less quantifiable—are generally felt at the same time. Improving working conditions thus helps to foster a good quality of life for all employees. Adapting their work environment—for example, by setting up ergonomic workstations—generally brings a breath of fresh air and, with it, a surge of motivation that positively impacts the organization’s productivity and the quality of its products or services.

Employees’ physical and mental well-being has also improved, which has the positive effect of increasing both individual and collective engagement, and thus reducing employee turnover. This improvement in working conditions strengthens the company’s internal culture as well as its CSR (Corporate Social Responsibility) policy, and has a direct impact on the company’s brand image and the public’s perception of it.

"Employees' physical and mental well-being has also improved, which has the positive effect of increasing both individual and collective engagement, and thus reducing employee turnover."

"The return on investment is by no means insignificant, as it is estimated to average 2.20 euros for every euro invested."

(1) Source: INRS
(2) Source: ANACT
(3) Source: National Health Insurance Fund for Salaried Workers (CNAMTS) / DGUV Statistics
(4) Source: Study summaries available upon request at communication@azergo.fr
(5) Source: “Calculating the Return on Prevention for Companies at the International Level: Costs and Benefits of Investments in Occupational Safety and Health”
(6) Source: “An Economic Approach to Prevention—Based on 101 Case Studies in Companies”

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