The Economics of Safety in Construction

Health and safety in the construction industry are not to be taken lightly. This seems like a given due to the high-risk nature of the industry. However, one study shows that 17% of employees report that they have never received proper safety training for the workplace.

What’s more, around $5 billion is lost on economic activity in the industry each year. And this is only with regard to worker fatalities. This does not even include the other costs associated with non-fatal safety fails, accidents, and non-compliance.

It is clear, then, that money is one of the main driving factors of health and safety conditions in construction. There are a number of economic forces that work together and impact health and safety in the industry. These include things such as worker’s compensation, OSHA, and ergonomics.

In this article, we’ll be taking a closer look at the nature of construction work as well as at these economic forces of safety.

The Nature of Construction Work

Construction work is, at its core, transient. This is because construction workers may not always have work to do. They rely on contractors to supply them with projects. As such, there is a great deal of uncertainty surrounding the amount of work and therefore the amount of money earned.

The amount of money earned by those working as employers in the construction industry is also greatly affected by safety. Profit margins for construction work are generally quite low, averaging between 3 and 4 percent. However, without the proper safety precautions in place, injuries or OSHA violations can often occur. This costs the employer even more money and results in a significantly reduced profit margin.

Therefore, keeping a close eye on the costs and economics of safety can really benefit a business in the long run. As such, there is also a need for a simple and efficient way of maintaining and tracking the things that cost money in safety.

Key Economic Forces of Safety in Construction

While there are many economic forces that relate to safety in construction, here are 3 key areas to focus on.

Worker’s Compensation

This key economic force refers to the money spent on claims made by workers or their families for occupational diseases, injuries, and fatalities. Because the construction industry is so high-risk, this has a significant effect on economics in construction. Often, an entire profit margin can be significantly affected by one single injury on site.

One study shows that upwards of $1 million is spent per worker fatality in the US alone. This makes it clear that the opportunity is high for smaller businesses to go bankrupt or have their sustainability reduced.

Safety is therefore tantamount to ensuring that worker’s compensation is a measure that (although necessary to have in place) is avoided at all costs. Rather avoid the need to compensate at all than find yourself in a difficult and costly situation when the time comes.

OSHA Standards

Another key aspect that drives money spent on safety in the construction industry is OSHA. The Occupational Safety and Health Administration conducts checks along with its state OSHA partners on construction sites. Violations can cost anywhere between $13,653 and $136,532. The amount depends on the severity of the violation and whether or not it is a willful or repeat offense.

It is therefore extremely important to keep up-to-date with OSHA standards. It is vital to comply with OSHA standards at all times. This may seem like an extra weight on your shoulders. But, considering the cost of violations, it definitely saves money in the long run. Non-compliance can end up costing you so much more than one violation penalty fine.


Ergonomics also plays a big role on construction sites. In today’s world, optimized materials, planning, and tools are all things that companies try to get the best out of. After all, they increase worker performance and productivity and therefore boost profit as well.

However, there is another reason ergonomics are so important: safety. About 38% of workday injuries in construction are the result of sprain and strain injuries. Good ergonomic setups will greatly decrease this number and therefore reduce the associated costs.

Investing in processes, products, and systems that work together to ensure safety and compliance in the workplace can reduce the probability of worker injuries. There is therefore a need for planning that does not skimp on safety. This is where SkillSignal comes in.

How can SkillSignal help?

The economics of safety in construction are all greatly influenced by things such as ergonomics, OSHA standards, and worker’s compensation. These are all forces that may often seem out of the control of the employer. However, there is a construction safety software solution to the seemingly daunting task of getting the costs of these forces under control: SkillSignal.

SkillSignal is an all-in-one construction management app that helps its customers to simplify efficiency, safety and compliance. The need to invest in safety is something that truly matters if you are looking to decrease costs and improve sustainability. Safety is an investment with a quick payback period.

The more you focus on the economics of safety in the construction field, the better your economic turnaround can be. Using SkillSignal can help you on your way to success! Check out our website to find out more about how the site safety app works and how one investment can actually save you money in the long run.

Final thoughts

In this article, we discussed the different things that affect the economics of safety in the world of construction. It is clear that the money you spend on safety is, more often than not, money saved. Keeping in mind the nature of the construction industry and the economics of safety therein, you can help your business increase productivity as well as lower costs.

It is also important to remember the value of human health and safety when making decisions that affect your business. It is this consideration that will help your business to flourish financially too.


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