A new study from the University of South Australia reveals how the global economy could recover billions of dollars lost each year due to workplace injuries and illnesses.
In Australia, over 500,000 employees suffer work-related injuries or illnesses annually, with 60% needing time off work. This costs around $30 billion, equivalent to the yearly output of Australia’s agricultural sector. Similarly, Canada spends CAD $29.4 billion annually, the United Kingdom incurs GBP £18.8 billion, and the European Union faces a staggering €467 billion each year.
Healthy conditions
The study found that companies with healthy working conditions, including supportive supervisors, valuing employees’ skills, job autonomy, and minimizing work stress, report significantly fewer lost workdays per workers’ compensation claim.
Researchers compared working conditions in 100 Australian organizations to 12,000 workers’ compensation claims, identifying the root causes of delays in returning to work after a workplace-related injury or illness. Organizations with poor psychosocial safety climates (PSC) reported 160% more days off due to workplace injury or illness compared to those with high PSC (177 days vs. 68 days).
Similarly, the costs for injury or illness were 104% higher 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,” the researchers say.
Cost savings
To avoid individual bias, the researchers correlated data sets at the organizational level instead of surveying injured employees about retrospective work conditions.
“Apart from a strong PSC, the most important factors in predicting a quicker return to work included job satisfaction, supportive supervisors, adaptable skills, and job autonomy,” they explain.
In Australia, during 2017-18, an estimated 563,000 people had a work-related injury or illness, 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 in the claims data included nurses, police officers, and personal assistants, with muscle-related injuries comprising the bulk of the claims.
“These findings provide more evidence that ‘healthy’ workplaces matter,” the authors conclude. “They are not only important for our psychological health and to prevent injury, but PSC is just as important following injury or illness. Building an organization with strong PSC will help reduce time lost and cut costs through better injury prevention and management.”
