Cost benefit analysis of safety aspects

Cost benefit analysis of safety aspects

Cost benefit analysis of safety aspects is very essential methodology to maintain a safety and healthy workplace environment. Generally speaking, cost benefit analysis is to measuring costs and benefits that enables broad comparisons to be made and imposes and accounting framework. The comparison of cost benefit analysis of safety aspects is monetary or safety valuation of the risk of performing a task vs. benefit of performing the task.

There are several advantages of cost benefit analysis of safety aspects including direct and indirect benefits.   Firstly, Cost saving is one of the direct benefits of cost benefit analysis of safety aspects. From the research provided by a nationwide insurance, there are about 60% of companies claim that they save about $3 for every dollar spent on safety programs. Secondly, companies can increase productivity and quality of the products. The Ritrama Company is good example when they measured cost benefit analysis as their business strategy, which made them to decreased injuries and illness, increased profits and improved the job satisfaction. Moreover, there is a direct and positive relationship between investment in safety, health, and the environment and its subsequent return on investment. For example, as illnesses, injuries and fatalities decline so to do health care and workers compensation costs.

However, the limitation of conducting a cost benefit analysis could be found that the government is not completely aware of all the cost and benefit associated with safety programs. Even through, all of companies should be awareness about importance of safety engineering, and try to put all relevant costs and benefits on safety programs to ensure a safety and health environment for all employees. Hence, to valuing costs and benefits by following the safety rules that will bring many direct and indirect benefits to companies.