osh and corporate competitiveness in a global … · osh and corporate competitiveness in a global...

PEROSH - seminar

25 November 2010, Brussels

OSH and Corporate Competitiveness in a Global Context Guy Ahonen Research Professor FIOH

Presentation heading / Työterveyslaitos / MM / 26-11-2010 2

The Cost-Effectiveness of Work Health Promotion

•  Abundant evidence of economic feasibility of WHP - Pelletier review study (1995-2001 ) - Aldana review study (2001) - Chapman meta-analysis (2005) - Baicker review study (2010)

•  Major benefits: - productivity increase - pension cost reductions - sick leave reductions - health care cost reductions

•  Benefit/Cost-ratios 3-10


Lindström, Schrey, Ahonen, Kaleva (2000 ).

Correlation between WAP and productivity and profitability in 218 SMEs in Finland 1996 - 1998

WAP Productivity Profitability Customer service R = 0,18 ** Multitasking r = 0,19 ** R = 0,21 ** Leadership r = 0,19 ** R = 0,18 ** Cooperation R = 0,24 **


The Druvan case

•  Municipality of Dragsjärd Finland

•  Multi-dimensional promotion of work- wellbeing 2002-5

•  20-fold increase of OSH = 46 % ROI

•  http://www.tyoturva.fi/ files/1166/ wellbeingproductivity.pdf


Estimated costs of early retirement in the OECD, % of potential GDP

Herbertsson et.al 2001

OECD average: 6,3 %


The cost of sick-leaves in selected OECD countries

Country % of GDP Austria 2,2

Belgium 3,1

Bulgaria 0,4

Chech 3 %

Deutschland 3 %

Estonia 5,5

Spain 1,21

Ireland 1 %

Latvia 2,8

Netherlands 2,96

Poland 0,29

European foundation for the improvement of living and working conditions: Absence from work, 2007

Mean: 3,8 % of GDP


The Contribution of Health to the Economy in EU: U.K. Direct and indirect costs

Suhrcke et.al. 2005

Direct costs well measured

Indirect costs greater, less well measured


The Contribution of Health to the Economy in EU: Mental illness

Suhrcke et.al. 2005

About 2 % of health expenditure


The Contribution of Health to the Economy in EU: The value of life-expectancy

Suhrcke et.al. 2005

Estimated ROI of health expenditure: 47%-252 %


Health & Economy Research findings

Suhrcke et.al. 2005

Arora,A (2001)

Barro,R. (1996)

Beraldo,S, Montolio,D Turati,G (2005)

Bhargava,A, Jaminson,D, Lau,L, Murray,C (2001)



Suhrcke et.al. 2005

Bloom,D, Canning,D Sevilla,J (2001, 2004)

Bloom,D, Canning, Jamison,D.T. (2004)

Brinkley,G (2001)

Fogel, R (1994)

Jamison,D.T; Lau,L; Wang,J (2004)



Suhrcke et.al. 2005

Knowls,S; Owen,P (1995)

Rivera,B; Currais,L (1999)

Rivera,B; Currais,L (1999)

Suhrcke,M; Urban,D (2005)

Wei,D (2004)



Suhrcke et.al. 2005

Andren,D; Palmer,E (2001)

Averett,S; Korenmann,S (1996)

Bartel,A; Taubman,P (1979)

Bartel,A; Taubman,P (1986)

Bloom,D; Canning,D Sevilla,J (2002)



Suhrcke et.al. 2005

Chiricos,T; Nestel,G (1985)

Contoyannis,P; Rise,N (2001)

Currie,J; Madrian,B (1999)

Fukui,T; Iwamoto,Y (2003)



Suhrcke et.al. 2005

Gambin,L (2004)

Gustman,A; Steinmeier,T (1986)

Hansen,J (2000)



Suhrcke et.al. 2005

Heinek,G (2004)

Judge,T; Cable,D (2003, 2004)

Luft,H.S. (1975)



Suhrcke et.al. 2005

Pelkowski,J.M; Berger,M.C. (2004)

Persico,N; Postlewaite,A; Silverman,D (2003)

Schultz,P (2002)


Social cost of early retirement in Finland 2008

The official retirement age 63-68 = 65

Number of new pension takers 77.109

Average age of new pension takers 58.1

Average los of productive work years per pension taker

65-58,1 = 6,9 v

Total annual loss of productive yers 532.052

Average value (cost) of one work year 45.405 €

Total annual cost of early retirement (cf. State budget 49 Bill. €, GNP 180 Bill. €)

24 Bill. €

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WA Index and early retirement Municipal workers 1981, % of cohort

Source: Ilmarinen, et.al.(1997), Scand J W E H

%

WA-index


Investment in Strategic Well-being in Finland 2009

Total sum 1,9 billion euros in a year

Aura,O, Ahonen,G, Ilmarinen,J: "Strategic Wellness Management in Finland - the first national survey of the management of employee well-being,",Journal of Occupational and Environmental Medicine 2010 (forthc.)


The "Balance of Horror" in the Finnish Labour Market

Training OHS

WA promotion Recreation and culture

Corporate fitness Communication

Early retirement Sick-leaves Accidents

****

(Presenteeism)

30 Bill € / year 2 Bill € / year


Corporate Social Responsibility (CSR)

•  - the economics dimension •  - the environmental dimension •  - the social dimension - the personnel - human rights - the local community - product responsibility

www.gri.com

22


Tripple-bottom-line-performance

•  The Financial performance + environmental performance

+ social performance ____________________

= Total performance ===============

23


GRI Community on what reporting should disclose

24 The Transparent Economcy 2010


The European Commission on CSR

•  Definition: A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.

•  In March 2010 the European Commission made a commitment to “renew the EU strategy to promote Corporate Social Responsibility as a key element in ensuring long term employee and consumer trust”.

http://ec.europa.eu/enterprise/policies/ sustainable-business/corporate-social-responsibility/index_en.htm


CSR and competitiveness at micro-economic level

•  Cost-structure (mixed evidence, cost savings in HR, risk management, access to finance)

Europen Competitiveness Report 2008


CSR and competitiveness at micro-economic level: HR-effects


(Montgomery and Ramus 2003)

MBAs from Europe and USA:

Research summary:


CSR and competitiveness at micro-economic level: HR-effects (2)



CSR and competitiveness at micro-economic level: Financial performance



Reasons to increased external transparency

•  The role reputation in the market is increasing •  Leads to reduced risk-premiums on investments •  Leads to higher stock prices •  Increased consumer awareness •  Demand for qualified labour •  Aging population

30


Conclusions

•  Inadequate health and safety causes enormous costs in industrialised countries

•  All costs eventually harm corporate competitiveness •  The positive economic effects of OSH measures well

documented •  Knowledge-intensity of work amplify the economic role of

OSH •  OSH is important because:

- it promotes Human Capital (knowlegde) - it promotes Structural Capital (organisations, risk mgmt) - it promotes Relational Capital (trust, responsibility)


A workplace: Google main office, Zürich

osh and corporate competitiveness in a global … · osh and corporate competitiveness in a global...

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