Making Economic Social Decisions for Improving Occupational Health – A Predictive Cost-Benefit Analysis

Abstract

The few studies attempting to estimate costs of work-related disorders suffer from poor applied methodologies. Further, as the costs are often limited to the company, decisions about investment in improving the work environment are made at the company level. However, economic decisions on changing work environments and improving occupational health need to be made at the societal level. In an economic social decision, all direct and indirect costs imposed on society by work-related disorders are considered, regardless of who pays which cost. This study introduces and demonstrates a methodology appropriate for economic decisions at the societal level for preventing work-related disorders and promoting occupational health in the workplace. The methodology uses the concept of human capital in assessing productivity loss associated with the disorders. The empirical results show that Swedish society could have gained up to 442 855 537 SEK by preventing work-related disorders at the Swedish company Sandvik Materials Technology during 2014, 87% of which would have been captured by the company.

Marginal socio-economic effects of an employer’s efforts to improve the work environment

“…Satisfied and productive employees are necessary to create a successful company, while dissatisfied and unproductive workers jeopardize the company’s image, sustainability, competitiveness, and survival [ 1 ]. The well-being and productivity of the workforce is conditional on a well-functioning work environment with minimum risk factors for illness [ 1 – 6 ].…”

“…Satisfied and productive employees are necessary to create a successful company, while dissatisfied and unproductive workers jeopardize the company’s image, sustainability, competitiveness, and survival [ 1 ]. The well-being and productivity of the workforce is conditional on a well-functioning work environment with minimum risk factors for illness [ 1 – 6 ]. Many disorders in a company are related not only to the physical environment at the workplace [ 2 – 7 ], but also to the work conditions along a series of psychosocial and ergonomic factors that characterize the work culture in the company [ 1 – 6 , 8 – 13 ].…”

“…The well-being and productivity of the workforce is conditional on a well-functioning work environment with minimum risk factors for illness [ 1 – 6 ]. Many disorders in a company are related not only to the physical environment at the workplace [ 2 – 7 ], but also to the work conditions along a series of psychosocial and ergonomic factors that characterize the work culture in the company [ 1 – 6 , 8 – 13 ]. Efforts to create a pleasant and productive work environment can be made by employers, employees, and even society’s health policy makers.…”

“…Everything from optimization of the physical environment at the workplace for different work functions up to the improvement of ergonomic and psychosocial working conditions can increase workers’ health and well-being and thereby the company’s sustainability and future benefits. WHP intervention programmes have been shown to result in reduced stress and physical strain [ 14 ], less sick leave, improved psychosocial well-being and work satisfaction [ 15 ], better social support from supervisors and colleagues [ 16 ], and also reduced cost for work-related disorders [ 1 , 17 ]. Thus, there are many factors motivating employers to implement and integrate WHP programmes.…”

Economic Decisions on Proposed Work Environmental Studies – a Theory for Cost and Value of Information

“…work-related disorders [36]. In October 2015, a work environmental study involving 100 workers was suggested to SMT.…”