Cost-Benefit Analysis of Occupational Health and Safety: A Case Study

Abstract

Top management generally considers occupational safety and health as an extra cost instead of a benefit. The current work presents a case study in a company that produces and installs temporary structures for events, involving two sectors: warehouse and production (assembly and disassembly). The Analysis of the Return on Investment of Preventive Measures clearly proved that the Benefit-Cost (B/C) Ratio is a very valuable instrument for decision making in the context of occupational safety and health. A sensitivity analysis of the B/C ratio was also performed. The proposed measures were proved as efficient for both sectors, with a positive Net Present Value and a B/C ratio higher than 1 in both sectors. Furthermore, the results obtained from the sensitivity analysis allowed us to understand the importance of validating the preventive measures under different situations. Indeed, by varying the scenarios with the introduction of different factors and the level of efficiency of the measures, it became much clearer the conditions of viability of the different preventive measures.