Study warns that companies providing safe workplaces are 20% more likely to go under than those that don’t
A study recently released by a global team of researchers including, Mark Pagell, Mary Parkinson, Michalis Louis and Brian Fynes of UCD Michael Smurfit Graduate Business School found that companies that provide safer workplaces are more likely to go out of business than those that do not.
“Our research suggests that businesses that enhance their own prospects over worker safety, will be more likely to survive as they will be both minimizing their costs and maximizing their cash-flow,” said Mark Pagell, Chair in Global Leadership and Professor of Sustainable Supply Chain Management at UCD Smurfit School.
“Meanwhile their more cautious competitors will in essence put their own survival at risk by better protecting the rest of us. This suggests that government and employer representative bodies need to think about rewarding those businesses that do protect their workers and protect them from being punished financially.”
The study, recently published in the journal Management Science, examined the short- and long-term survival of more than 100,000 Oregon-based businesses over a 25-year period. The study defined “survival” as ongoing operations, even in the face of a significant business event.
“We know from our previous research that there are firms who leverage protecting their employees into competitive advantage; creating positive outcomes for the firm, workers and society,” said Pagell, who is also the Co-Editor-in-Chief for The Journal of Supply Chain Management.
For instance, SIPTU’s IDEAS Institute has worked with numerous Irish organizations to find ways to improve productivity while enhancing worker wellbeing; often saving jobs or preventing plants from closing while doing so.
“Our research, unfortunately, suggests that such behaviour is not the norm and instead that the typical business enhances its own prospects at a cost to workers and society. To put that into the current context, some business will re-open the second they are allowed after COVID-19 restrictions ease and with the minimal legally mandated protections. Others will wait until they are sure they have plans in place to fully protect their workers and customers,” continued Pagell.
Pagell cites the situation in Irish food processing facilities in late March, when workers were worried over the safety of the work environment. At the time, the companies claimed they had made changes to protect the workforce, yet today there are virus clusters in multiple meatpacking plants.
The results of the study indicate that currently individual workers and society, not firms, bear most of the costs of poor safety; otherwise the safest organizations would on average be the most economically viable.
The study was an international collaboration between the UCD Smurfit School team; Anthony Veltri of Oregon State University; Frank Wiengarten of Universitat Ramon Llull in Spain; and John Gray, professor of operations management at Ohio State’s Fisher College of Business.
For further information contact:
Beth Gormley, UCD College of Business, PR: 087 170 1652, firstname.lastname@example.org