Risk-Based Framework for Safety Investment in Construction Organizations

Abstract

The costs of construction injuries can have a substantial impact on the financial success of construction organizations and increase the overall costs of construction up to 15%. Following the Occupational Safety and Health Act of 1970, construction firms began to implement a variety of management techniques to reduce the frequency of injuries. Although these strategies decrease the cost of injuries, they consume time and other significant resources. Thus, it is imperative for construction organizations to objectively evaluate the cost-benefit of investments in injury prevention through formal and robust processes. This paper presents a risk-based framework that can be used to evaluate the incremental return on investment of a series of investments in highly effective injury prevention strategies. The framework was developed using foundational risk quantification and analysis techniques and is illustrated using a hypothetical case study that is based on archival data published by United States government agencies. The conclusion of this study is that the optimal investment strategy can be identified through a formal analysis and that optimization depends on the frequency and cost of injuries, the sequence in which the specific injury prevention techniques are implemented, the risk mitigated by each strategy, and the organization’s attitude toward acceptable risk.