ADOSH-SF Guidance Document: Building the Business Case for Investing in OSH

Article-level navigation isn't available for this document — showing the full text as extracted.

Abu Dhabi Occupational Safety and
Health System Framework
(ADOSH-SF)
ADOSH-SF Guidance Document
Building the Business Case for Investing in OSH
Version 4.0
July 2024

ADOSH-SF – Guidance Document
Building the Business Case for Investing In Occupational Safety and Health
Version 4.0 – 15 th July 2024
Page 2 of 16
Table of Contents
1. Introduction ..................................................................................................................................................... 3
2. Costs and Benefits........................................................................................................................................ 4
3. Building the Business Case ....................................................................................................................... 5
4. Case Studies .................................................................................................................................................... 7
4.1. Personal Protective Equipment (PPE) ........................................................................................... 7
4.2. Occupational Health............................................................................................................................. 9
4.3. OSH Management Systems ............................................................................................................... 9
4.4. Building Management ......................................................................................................................... 9
5. Choosing where to invest? ...................................................................................................................... 11
5.1. Training / Competency Development.......................................................................................... 11
5.2. Personal Protective Equipment ..................................................................................................... 11
5.3. Wellbeing programs ........................................................................................................................... 11
5.4. Plant and Equipment ......................................................................................................................... 11
5.5. Leadership programs ......................................................................................................................... 12
5.6. Employee Engagement ..................................................................................................................... 12
5.7. OSH Management Systems ............................................................................................................. 12
6. References..................................................................................................................................................... 13
7. Document Amendment Record .............................................................................................................. 14

ADOSH-SF – Guidance Document
Building the Business Case for Investing In Occupational Safety and Health
Version 4.0 – 15 th July 2024
Page 3 of 16
1. Introduction
(a) If you could save money, improve productivity, and increase employee morale, would
you?
(b) Businesses spend a huge amount of money each year on costs associated with
occupational injuries and illnesses -- expenditure that come straight out of company
profit, yet when asked about how much money we are willing to invest in Occupational
Safety and Health to reduce those costs, it is often a very low figure.
(c) One of the main reasons for this could be due to the fact that the returns on investing
in Occupational Safety and Health are not always tangible and easy to calculate unlike
other investments we make in our business.
(d) Traditionally when we invest money, it is normal to expect a clear return on that
investment, normally shown in increased sales and profit, however when investing in
Occupational Safety and Health, the returns are generally hidden costs such as
reduced incidents or absenteeism.
(e) This should not deter investment within OSH, however it is vital that we measure this
correctly so that the return on investment can be clearly identified and demonstrated.
Without clear evidence on the returns, the likelihood is that the appetite for
investment will reduce within your entity.
(f) Studies around the world estimate that the average return for every euro (5aed)
invested in OSH there is a return of 2.2 euros (10aed). As impressive as this return is
it doesn’t include some of the hidden benefits and potential returns such as improved
morale, reduced illness etc.

ADOSH-SF – Guidance Document
Building the Business Case for Investing In Occupational Safety and Health
Version 4.0 – 15 th July 2024
Page 4 of 16
2. Costs and Benefits
(a) Costs will normally be divided into two general categories, insured and uninsured, or
direct and indirect and may include:
(i) Increased absenteeism
(ii) Loss of key staff
(iii) Poor staff retention
(iv) New staff hiring and training
(v) Increased insurance premiums
(vi) Higher production costs
(vii) Lower morale within staff
(viii) Property damage
(b) Another factor that might affect the long-term success of the company is that of
reputation. What do employees and the members of the local community think about
a company that does not provide its employees a safe and healthy workplace? Will a
company with a poor incident record be able to maintain a competitive advantage
when tendering for new works or will they even be disqualified from tendering?
(c) It has been estimated by the Health and Safety Executive (HSE) in the United Kingdom
that for every £1 pound that is recovered from insurance following an accident, the
employer will have to pay a further £3.50 for items that are not insured and cannot
be recovered.
(d) One of the most common mistakes made when looking for investment into OSH is to
only try and guess what the return may be or put forward or rough value range. This
approach will always generally fail, why would any Chief Financial Officer (CFO) or
senior manager give away money straight from their profit margin in the hope that it
will provide the rough guess around returns that has been made.

ADOSH-SF – Guidance Document
Building the Business Case for Investing In Occupational Safety and Health
Version 4.0 – 15 th July 2024
Page 5 of 16
3. Building the Business Case
(a) A business case is an argument that supports an intervention for an OHS issue, e.g.
purchasing a new piece of plant, employing more staff in a particular area, staff
training, introducing a particular management system. It sets out the reasons for the
intervention and establishes the cost of the problem compared to the cost of
implementing a solution or a number of alternative solutions. Business cases will not
always relate to risk management; they may concern new management systems,
supervisory structures, organizational policies or legal requirements.
(b) When developing a business case, as mentioned previously, it is important to spend
time to quantify the benefits of the investment or what the actual returns may be.
(c) Your business case should identify a number of issues:
(i) The need for investment - What is the actual issue, why does your business need
to invest in this particular area?
(ii) The legal Requirements - You could already be meeting the minimum regulatory
requirements, however further investment would provide further benefits. Don’t
allow the business case to be led by legal requirements as this argument (alone)
will never drive forward OSH.
(iii) The Outcomes – what do you expect to achieve? This is the area where you should
drive forward the intended improvements but be careful not to overestimate this.
Also, when looking at what you want to achieve, link this to the overall business
vision and mission, try to link both.
(iv) Timescales – again it is vital that you identify this correctly. What are the
implementation timescales and also very importantly what are the payback
timescales.
(v) Costs – this is where you should outline what the costs are for the investment or
proposed changes. Normally these can be split into two categories:
1. Initial investment costs – what the actual set up costs are for the proposed
changes. It is very important here to capture all set up costs, such as new
equipment and/or materials, time required to develop procedures, and
training for staff on new procedures or equipment. Also ensure you include
other more hidden costs such as initial lost production during
implementation, staff time for training, costs of external trainers etc.
2. Reoccurring costs – this will be normal running costs such as maintenance
for the equipment, ongoing refresher training etc.
(vi) Benefits – here is where you can sell the investment to your business, what is the
actual return they will see form the investment. It is always tempting to add a
little more to the returns, however be careful not to make the investment sound
too good to be true!! When outlining the benefits of an investment, these can
normally be split into two categories:
1. Productivity Gains: this is where you can show the costs savings related to
improved productivity, such as less time spent by employees on a particular
task, lower costs within production etc. An issue to be aware of is that a
certain change may result in decreased productivity in a certain way, for

ADOSH-SF – Guidance Document
Building the Business Case for Investing In Occupational Safety and Health
Version 4.0 – 15 th July 2024
Page 6 of 16
example, the use of lifting equipment to prevent back injuries may result in
employees taking more time to complete a certain task, however the
benefits will be shown in other areas. It is important to capture this fact.
2. Avoided costs – this is the most common cost saving in relation to
Occupational Safety and health and can be the hardest to capture
accurately. These are the costs that do not occur following the change,
these can include:
• Reduced incidents
• Reduced absenteeism
• Reduced downtime
• Reduced retraining
• Reduced investigation time
• Reduced medical costs
• Improved staff retention
• Improved staff morale and participation

ADOSH-SF – Guidance Document
Building the Business Case for Investing In Occupational Safety and Health
Version 4.0 – 15 th July 2024
Page 7 of 16
4. Case Studies
(a) The following sections provide information on some of the factors that should be
considered when developing a business case and how this could be presented within
your organization.
(b) Section 4.1 below is a detailed example of a study that was undertaken to provide
further investment in PPE, whilst the subsequent sections provide information on
some of the factors that could be considered for other types of investment within an
organization.
4.1. Personal Protective Equipment (PPE)
(a) The HSE manager of a large construction company (2000 laborers) went to his general
manger to ask them to provide a better safety boot for employees as he had concerns
over the quality and durability of the current boot. The request was rejected due to
the lack of any data to back up the claims that the current boot was not the best
option.
(b) The OSH manager then decided to develop a business case for the additional
investment in safety boots compared to the current costs within the business. As part
of this he found that in the last financial year the company had paid 167,992AED for
safety boots and on further examination identified that over 85% of that was related
to replacement boots rather than for new employees. The average lifecycle of a safety
boot was approx. 4 months. The safety boot that they supplied to their employees
was one of the cheaper models in the market costing approx. 44 AED per pair.
(c) Following consultation with staff to determine any additional requirements and issues
they have with the current safety boot, the OSH manager then contacted a number of
suppliers and ran trials with different styles of boot, with the focus being on comfort
and durability.
(d) The trials were run over a period of four months with two different styles of safety
boot to allow the company to have comparable data for the lifespan of the trialed
boots. The company issued 100 pairs of each style of boot, including the current boot
and monitored the results. He then presented the following business case to his
General Manager.

ADOSH-SF – Guidance Document
Building the Business Case for Investing In Occupational Safety and Health
Version 4.0 – 15 th July 2024
Page 8 of 16
2014 Data for Safety Boots
Total Issued 3818
Total Replaced 3287
Total Cost (AED) 167992
Average cost per employee (AED) 84.00
Current Trial 1 Trial 2
Issued Costs Issued Costs Issued Costs
Total issued 100 4400 100 5800 100 6500
Total replaced 71 3124 23 1334 5 325
Number
requiring
replacement in
next month
25 1100 15 870 3 195
Total Cost 8624 8004 7020
Av cost per
person (100) 86.24 80.04 70.20
(e) The results showed that the average costs for trial boot 2 was 70.20 AED per
employee which worked out to a saving of 16 AED per employee over the trial period
which is a 22% saving. The costs were presented to the General Manager and it was
agreed that the company would provide the trial boot 2 going forward for all
employees.
(f) Despite increasing the investment in safety boots by 50% per pair, the company was
able to show an 18% decrease on the purchase costs for safety boots, which equated
to a saving of 30,240 over one year.
(g) Further to this, a survey was carried out across all employees on the new safety boots
being provided and this reported a 68% increase in the satisfaction of employees with
safety boots.

ADOSH-SF – Guidance Document
Building the Business Case for Investing In Occupational Safety and Health
Version 4.0 – 15 th July 2024
Page 9 of 16
4.2. Occupational Health
(a) Your company has identified large increases in the amount of sick leave being taken
by employees during the winter months. On further examination it was shown that flu
or colds are the most common cause of sick leave. After some research, the company
decides to invest in a flu vaccination program which would be implemented during the
early part of the year and would be a one-off annual cost to the company.
(b) The return that the company should see from this investment would include:
(i) Reduced absenteeism
(ii) Maintained production levels
(iii) Reduced need to provide cover for absent staff
(iv) Increased staff morale as less illness and an increased sense of value
4.3. OSH Management Systems
(a) The company has regularly tendered for work through local government organizations
and this has in the past provided over 25% of the ongoing revenue within the
business. A new law has recently been released stating that all companies must
ensure that they have an approved OSH Management system in line with the local
regulatory requirements.
(b) Although the company does have a loose OSH management system in place, it will
require major upgrade to comply with local requirements and gain approval. This
upgrade will entail a significant investment from the business, including the use of
external consultants and hiring of internal resource to manage the system.
(c) The return on this investment can be seen through continued revenue from local
government organizations. The investment may also open other opportunities to
tender for works that the company may have been excluded for in the past.
(d) The implementation of a more robust management system will also provide further
benefits including reduced incidents etc.
4.4. Building Management
(a) The building your company operates from is old and has a full fire alarm system
installed within. The fire alarm system is still functional and is maintained, however
due to the age of the system it has started to show a lot of faults. The faults have
resulted in a number of issues including:
(i) Loss of production due to increased fire alarms
(ii) Increase in complaints from staff around the systems installed
(iii) Increase in complaints from neighbors due to the number of fire alarms
(iv) Development of staff attitude in ignoring alarms
(v) Threats of punitive action from the local fire service due to the number of times
they are called out to false alarms at your premises.
(b) Given the information gathered around the fire alarm systems and following a cost
benefit analysis, it is decided to upgrade the fire alarm system. The return on this
investment will be seen in a number of areas, including:

ADOSH-SF – Guidance Document
Building the Business Case for Investing In Occupational Safety and Health
Version 4.0 – 15 th July 2024
Page 10 of 16
(i) Maintained production levels
(ii) Increased staff confidence and security levels
(iii) Compliance with local regulations
(iv) Increased staff morale

ADOSH-SF – Guidance Document
Building the Business Case for Investing In Occupational Safety and Health
Version 4.0 – 15 th July 2024
Page 11 of 16
5. Choosing where to invest?
(a) Choosing how you invest in Occupational Safety and Health will be very particular to
your own company and the ongoing issues within. As highlighted throughout this
document it must be based on facts and figures from your own situation to support
this.
(b) Below are some examples of areas you may choose to investigate to identify what
additional investments may be required.
5.1. Training / Competency Development
(a) Training is one of the most popular areas companies choose to invest in. The benefits
of robust training programs are well document and provide not only a quantifiable
return on investment through improved process or production but also provide the
additional benefits of ensuring your staff feel valued and part of the company’s future
success.
5.2. Personal Protective Equipment
(a) Very often we overlook the need to ensure that the people who are wearing the PPE
provided are comfortable and able to undertake their role without any additional
burden. Investing in better PPE will help employees to undertake their roles safely.
5.3. Wellbeing programs
(a) One of the hardest investments to quantify returns on is the provision of well-being
programs for your staff. Most companies, when looking to invest in wellbeing
programs generally look at the provision of subsidized gym or health club
memberships. Although these are part of a wellbeing program we should also look at
other areas such as:
(i) Nutritional programs and provision of advice on healthy eating
(ii) Internal fitness competitions that challenge staff to be more active or take more
steps during the day
(iii) Health screening for employees
(iv) Stop smoking programs
(b) There are numerous programs that can be introduced for your staff with no huge cost,
although some costs will be involved. It can be difficult to see the financial return on
Wellbeing programs however benefits of these include:
(i) Reduced absence
(ii) Improved morale
(iii) Improved staff retention
(iv) Company brand and reputation increase
5.4. Plant and Equipment
(a) Investing in improved or new plant and equipment can have many benefits for
occupational safety and health, however they can also directly improve productivity.

ADOSH-SF – Guidance Document
Building the Business Case for Investing In Occupational Safety and Health
Version 4.0 – 15 th July 2024
Page 12 of 16
5.5. Leadership programs
(a) Investing in the leadership of your business is just good common sense, as is ensuring
that it also entails occupational safety and health.
5.6. Employee Engagement
(a) Spending money on engaging your employees will help improve your business.
Companies who have invested in this area have shown that over a period of time,
production levels and overall income have increased. This is in the main due to the
fact that those who are undertaking the task have a clear, meaningful input into how
they are delivered.
5.7. OSH Management Systems
(a) This is an area often overlooked for continual investment and improvement. Ongoing
investment in our management systems or perhaps the manner in which we
implement their requirements can help improve Occupational Safety and Health in a
business and provide returns on investment.

ADOSH-SF – Guidance Document
Building the Business Case for Investing In Occupational Safety and Health
Version 4.0 – 15 th July 2024
Page 13 of 16
6. References
•
The business case for safety and health at work: cost-benefit analyses of
interventions in small and medium-sized enterprises - ISBN: 978-92-9240-495-6
- EU-OSHA.
•
Investing in Health and Safety - A Guideline for New Zealand Business
•
The Business Benefits of Health and Safety – A Literature Review – May 2014 –
British Safety Council

ADOSH-SF – Guidance Document
Building the Business Case for Investing In Occupational Safety and Health
Version 4.0 – 15 th July 2024
Page 14 of 16
7. Document Amendment Record
Version Revision Date Description of Amendment Page/s Affected
4.0 15th July 2024
System acronym updated from OSHAD-
SF to ADOSH-SF to accurately reflect
document title
Throughout
Change from OSHAD to ADPHC
Change of Logo
Minor editorial changes throughout the
document without changing requirements.

ADOSH-SF – Guidance Document
Building the Business Case for Investing In Occupational Safety and Health
Version 4.0 – 15 th July 2024
Page 15 of 16