Healthy work environments slash costs of workplace injuries and illnesses, study finds

University of South AustraliaJul 4 2024

A new study published this week shows how the global economy could claw back billions of dollars lost each year due to workplace injuries and illness.

In Australia, more than 500,000 employees sustain injuries or illnesses relating to work and in 60% of cases, this requires time off work. That equates to around $30 billion, equivalent to the annual output of Australia's agricultural sector.

In Canada, their annual costs are equivalent (CAD $29.4 billion); the United Kingdom comes in at GBP £18.8 billion each year and across the European Union (EU), a staggering €467 billion a year.

New research published in Safety Science reveals that companies that offer healthy working conditions to employees, including supportive relationships with supervisors, valuing skills and job autonomy, and minimizing work stress, report far fewer days lost per workers' compensation claim.

Researchers from the University of South Australia's Psychosocial Safety Climate Global Observatory compared working conditions in 100 Australian organizations to 12,000 injured workers' compensation claims, identifying the root cause of delays in people returning to work after workplace-related injury or illness.

Organisations with a poor psychosocial safety climate (PSC) reported 160% more days off due to workplace injury or illness, compared to high PSC organizations (177 days vs 68 days).

Likewise, costs for the injury or illness were 104% greater in very low PSC organizations versus high PSC organizations ($67,260 vs $32,939 per employee).

Our findings show that a healthy psychological climate in workplaces is essential if companies want to reduce working time loss and costs related to workplace injuries and illnesses."

Maureen Dollard, UniSA ARC Laureate Fellow Professor

The researchers avoided individual bias by correlating data sets at the organizational level rather than surveys with injured employees on retrospective work conditions.

"Aside from a strong PSC, the most important factors in predicting a quicker return to work included how satisfying and rewarding their job was, how supportive their supervisor was, whether their skills were potentially adaptable, and how much autonomy they had in their role."

In Australia, during 2017-18, an estimated 563,000 people had an injury or illness related to work, representing 4.2% of the workforce. In 60% of cases, this involved taking time off work, costing the equivalent of Australia's annual agricultural output, or 1.6% of the nation's GDP.

The most common occupations featured in the claims data included nurses, police officers and personal assistants. Muscle-related injuries comprised the bulk of the claims.

"These findings provide more evidence that 'healthy' workplaces matter," says Prof Dollard. "They are not only important to our psychological health and to prevent injury to workers, but PSC is just as important following injury or illness.

"Building an organization with strong PSC will help to reduce time lost and also cut costs through better injury prevention and management."