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Health and Safety Executive
Work and Enterprise Panel 2Business survey
Prepared by the Institute for Employment Studies and The Work Foundation for the Health and Safety Executive 2007
RR589 Research Report
© Crown copyright 2007
First published 2007
All rights reserved. No part of this publication may bereproduced, stored in a retrieval system, or transmitted inany form or by any means (electronic, mechanical,photocopying, recording or otherwise) without the priorwritten permission of the copyright owner.
Applications for reproduction should be made in writing to:Licensing Division, Her Majesty’s Stationery Office,St Clements House, 216 Colegate, Norwich NR3 1BQor by email to hmsolicensing@cabinetoffice.x.gsi.gov.uk
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Health and Safety Executive
Work and Enterprise Panel 2Business survey
Marc Cowling Principal Economist Institute for Employment Studies University of Sussex Brighton BN1 9RF
Stephen Bevan Director of Research The Work Foundation Peter Runge House 3 Carlton House Terrace London SW1Y 5DG
This report is intended to provide uptodate information on UK business attitudes, intentions and performance vis a vis health and safety in the workplace. In addition, it aims to provide robust empirical evidence concerning any linkages and impacts of health and safety strategy and expenditure on an array of hard and soft performance measures of intermediate and final business performance. We also consider how health and safety issues interact with key strategic decisions in other core business areas to achieve the greatest impact on observable performance.
This report and the work it describes were funded by the Health and Safety Executive (HSE). Its contents, including any opinions and/or conclusions expressed, are those of the authors alone and do not necessarily reflect HSE policy.
HSE Books
Contents
1. Executive Summary 4
1.1 Aims 4
1.2 Data 4
1.3 Health & Safety Risk and Strategy 4
1.4 Linking Health & Safety Strategy to other Business Areas 5
1.5 Performance Analysis 6
1.6 Conclusion 7
2. Introduction 8
3. Sample Characteristics 10
3.1 Firm Characteristics 11
3.2 Summary 15
4. Health & Safety Risk and Skills 17
4.1 Summary 19
5. Health & Safety Strategy 21
5.1 Linking Health & Safety index and other Strategic Indices 32
5.2 Modelling H&S Strategy 34
5.2.1 Managing Health & Safety is a Strategic Issue 34
5.2.2 Health & Safety Performance Is Cost Positive 36
5.2.3 Board Level Commitment and Responsibility for Health & Safety 40
5.2.4 Health & Safety is a Critical Part of Good People Management 41
5.2.5 Employees Empowered to Act on Health & Safety Issues 42
5.3 Summary of Health & Safety Modelling 44
6. Performance Analysis 46
7. Conclusions 48
8. Bibliography 51
9. Appendix 1 57
10. Appendix 2 59
11. Contact details 66
Figures
1. Employment Size Distribution by Industry Sector 11
2. Distribution of Head Quarters Location by Industry Sector 12
3. Governance by Size Class of Business 15
4. Skills and Health & Safety Risk 18
5. Health & Safety Strategic Issues 22
6. Average Employee Days Off Due to Illness or Injury 25
7. Average Employee Days Off Due to Illness or Injury 26
8. Average Expenditure Per Full Time Employee on Health & Safety 27
9. Average Expenditure Per Full Time Employee on Health & Safety 28
10. Median Expenditure Per Full Time Employee on Health & Safety 29
11. Bivariate Regression Models for the Impact of Health & Safety on Strategic Indices 33
12. Managing Health & Safety is a Strategic Activity (base=micro business) 35
13. Managing Health & Safety as a Strategic Activity by Sector 36
14. Health & Safety Performance is Cost Positive (base = micro) 37
15. Health & Safety Performance is Cost Positive and Business Age 39
16. Board Level Commitment and Responsibility for Health & Safety 40
17. Health & Safety is a Critical Part of Good People Management 41
18. Employees Empowered to Act on Health & Safety Issues 42
19. Business Age Effects on Employment Empowerment to Act on Health & Safety 43
20. Correlations between Business Objectives and H&S Strategic Index 45
21. Performance Measure Definitions 57
22. Performance Outcomes Summary Table 58
23. Sample Statistics 59
24. Business Performance 60
25. Business Performance, Part 2 63
Section1
Executive Summary
1.1 Aims
This report is intended to provide up-to-date information on UK business attitudes,
intentions and performance vis a vis health & safety in the workplace. In addition, it
aims to provide robust empirical evidence concerning any linkages and impacts of
health & safety strategy and expenditure on an array of hard and soft performance
measures of intermediate and final business performance. We also consider how
health & safety issues interact with key strategic decisions in other core business
areas to achieve the greatest impact on observable performance.
1.2 Data
Derived from an extensive telephone survey of 3,000 UK businesses, the sample
reflects the size and sectoral distribution of the UK business population, albeit with a
top-up sample of very large businesses. We also allowed for geographical
representation according to Government Office Regions. The telephone interviews
were carried out in June and July 2004, and the sample was generated by random
digit dialling. Interviews were carried out with Chief Executive Officers, managing
Directors, Chief Finance Officers or Human Resource Directors in the UK. The study
was conducted using Computer Assisted Telephone Interviewing (CATI) and
interviews lasted an average of 23 minutes. The response rate was 23.7 per cent.
1.3 Health & Safety Risk and Strategy
We considered how the nature of the industry sector a business operates in affects
their strategic positioning vis a vis health & safety. The key survey questions we
posed relating to health & safety strategy were;
− Our business views managing health & safety as a strategic activity
− We see good health & safety performance as being cost positive
− There is board level commitment and responsibility for the health & safety track
record of our business
− Our business sees health & safety as a critical part of good people management
− We empower our employees to act if they encounter health & safety risks, even if
it means stopping work
4
In each case the respondent is required to state the extent to which they agree or
disagree with these statements. One further question is relevant and relates to
perceived risk;
− Our business manages significant health & safety risk
As before, respondents state the extent to which they agree or disagree on a five
point scale. The basic statistics reveal that;
− Certain sectors, namely construction, retail/hotels/catering, agriculture, other
community and utilities all perceive there to be a higher degree of risk
− Medium sized businesses (50-249 employees) tend to operate in environments
where they manage health & safety risks to a greater degree than other size
classes of business
− We identify a strong correlation between a strategic commitment to health &
safety and the belief that health & safety performance is boosting the bottom-line
− Micro businesses, in particular, may be failing to address strategic issues
surrounding the management of health & safety in the workplace because they
are less likely to believe that it will improve their bottom-lines
− It is also true that key decision-makers in micro firms are reluctant to accept
responsibility for health & safety
− The median expenditure on health & safety per annum is £200 per full-time
employee.
− Only 29% of businesses have an explicit health & safety budget.
− It appears that businesses make their budgetary decisions first (i.e. do we want to
spend any money on health & safety?), then decide how strong their strategic
commitment is going to be, which in turn determines the size of the budget
allocation.
1.4 Linking Health & Safety Strategy to other Business Areas
In line with our a priori hypothesis that integrated and complementary strategy
making will yield better performance than isolated decision-making we then tested for
basic associations between our health & safety strategy index and five other strategy
indices covering shareholders, stakeholders, innovation, customer & markets and,
people. This is important as health & safety is not commonly seen as having equal
status as other business areas.
− Our health & safety index can explain a significant amount of the variation in our
five strategic indices (shareholder, stakeholder, innovation, customer & markets,
and people).
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− It is more strongly associated with the stakeholder and people indices, and less
so with the shareholder index.
− In short, better health & safety index scores are associated with higher index
scores in our five other strategic domains.
1.5 Performance Analysis
We tested for the impact of strategy and strategic bundles on a total of 13 alternative
measures of intermediate and final business performance. In addition we also tested
for any performance enhancements derived from health & safety expenditure, an
additional measure of hard commitment to employee welfare. However, as our
survey data is essentially cross-sectional in nature, the results should be interpreted
as associations rather than indicative of absolute causality. Further research using
longitudinal data would provide more robust conclusions. Our key results are as
follows:
− In no cases was spending more on health & safety associated with a worsening
of performance. The same was true for the H&S strategy index.
− Higher H&S strategic index scores were associated with helping businesses to
create a workforce whose skills base are above their industry benchmark.
− In three instances we observed that spending more on health & safety was
associated with improved outcomes. Firstly, higher spending was associated with
businesses having an increased probability of attracting good quality employees
from their industry pool, which may suggest that higher H&S spend sends a
positive signal to potential employees.
− Within businesses existing workforces, higher H&S spend was associated with
improved employee commitment.
− Higher H&S spend was associated with faster sales growth over three years.
− Taken together, our performance results, across a range of measures, strongly
suggest that spending on health & safety (or making a strategic commitment)
does no harm to a business and most certainly is associated with tangible
improvements in employee related aspects of the business, which in turn can
feed through into measurably better bottom line outcomes.
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1.6 Conclusion
Our start point was that the key to achieving high levels of business performance is
to develop complementary strategies across all areas of the business because it is
the overlapping and mutually reinforcing effect of multiple, synergistic practices that
have, potentially, the largest impact. To test this hypothesis, we surveyed 3,000 UK
businesses. Our initial finding was that health & safety as an issue generally ranks as
important or very important for UK businesses. However, we also found that smaller
businesses are less likely to have a positive attitude towards health & safety issues,
or regard it as a key strategic area.
In terms of complementarities with broad business objectives, we found that health &
safety strategy was associated with creating a great place to work, innovation,
stakeholder value and business growth. This could suggest that a commitment to
health & safety is strongly aligned to a desire to deliver high levels of job enrichment,
to create an environment supportive of creativity and innovation, and to engage with
the wider community, including suppliers.
On business performance, we find that our health & safety strategic index has one
positive association (with helping businesses create a highly skilled workforce). But
actual health & safety expenditure is associated with observably higher performance
in three areas; having a greater capacity to attract quality employees; higher
employee commitment, and; faster sales growth. Taken overall, our performance
models, across a wide range of indicators, suggest that a strategic commitment to
good health & safety practice does businesses no harm, and a spending commitment
is strongly associated with tangible improvements in employee related aspects of the
business.
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Section 2
Introduction
This report is intended to provide up-to-date information on UK business attitudes,
intentions and performance vis a vis health & safety in the workplace. Further, it will
then go on to provide robust empirical evidence concerning any linkages and impacts
of health & safety on an array of hard and soft measures of intermediate and final
business performance. This is of great importance given that health & safety has
been an area of secondary concern to businesses historically, and a key focus of
legislation in recent times.
In a comparative sense the UK has a good health & safety record within the EU, and
is second only to Sweden in terms of fewest fatalities. Yet we still recorded 235
fatalities in 2003/04 and 159,809 other non-fatal injuries (Health & Safety Executive).
Further, there is tremendous variation across industry sectors, with construction,
agriculture and transport being sectors with relatively poor records on health & safety
(Health & Safety Executive). With this in mind, sectoral patterns in terms of the
importance of health & safety as an area of strategic decision-making will be a
primary focus of this report. In addition, we will also investigate how strategy varies
across different size classes of business. This is an area where robust statistics are
less available, yet of huge importance given the numerical dominance of very small
businesses in the economy who represent 46.8% of employees in work. However,
what research there is (see for example Fenn and Ashby, 2004; Pegula, 2004)
suggests that the self-employed and smaller businesses have higher accident rates,
as do non-unionised businesses or those without health & safety committees
In terms of the background and thinking behind our work, the current study intends to
build upon a 2003 Work Foundation report that looked in detail at how synergistic
business strategies, when combined together over a wide range of functional
managerial and strategic areas, could improve the productivity of UK businesses
(Harding et al, 2003). This was deemed of vital importance to the UK economy, as it
is only improvements in the productivity of UK business that can deliver sustainable
increases in competitiveness, incomes and welfare for the UK and its population.
In 2004 a new study was commissioned which took an even broader remit in terms of
its strategic scope (Cowling et al, 2005). However, the basic premise remained the
same, that the key to achieving high levels of productivity and performance is to
8
develop complementary strategies across all areas of the business because it is the
overlapping and mutually reinforcing effect of multiple, synergistic practices that
have, potentially, the largest impact. The current study can be seen to have two
fundamental objectives: Firstly, it can be seen to provide up-to-date evidence of the
current state of UK business in terms of corporate objectives, strategy and
performance and how health & safety issues interact with these strategic decisions
and outcomes. Secondly, it aims to identify complementary bundles of strategies,
including those on health & safety, that are associated with observable high
performance.
Thus our hypothesis is that health & safety is a key area of strategic decision-making
that cannot be considered in isolation by businesses, and one that must be
integrated into other areas of strategy to ensure not only consistency in terms of
planning, but to achieve maximum impact on business performance. To achieve this
we conducted an extensive telephone survey of 3,000 UK businesses. This report
contains the findings from our investigation of the data, and raises issues that are of
importance to businesses and government policy-makers.
9
Section 3
Sample Characteristics
In this section we present the summary statistics for the telephone survey. This is
designed to give the reader a general feel for how businesses set their objectives,
determine appropriate strategies, and the nature of the markets they operate in. To
facilitate a better, and more complete, understanding of the UK business sector we
disaggregate our reporting by broad industry sector (13 in total) according to Sector
Skills Development Agency guidelines.
This report is based on 2,902 telephone interviews. The sample was drawn up to
reflect the size and sectoral distribution of the UK business population. However, due
to the small proportion of large businesses, we included a top-up sample to ensure
adequate numbers for meaningful analysis. We also allowed for geographical
representation according to Government Office Regions. The telephone interviews
were carried out between June and July 2004 by IFF Research Ltd on behalf of The
Work Foundation.
The sample was generated by random digit dialling, but quotas were set, as
discussed above. Interviews were carried out with Chief Executive Officers (CEOs),
Managing Directors (MDs), Chief Finance Officers (CFOs) or Human Resource
Directors in the UK, in establishments of all sizes.
The study was conducted over the telephone using Computer Assisted Telephone
Interviewing (CATI). Interviews lasted an average of 23 minutes. The response rate
was 23.7 per cent.
10
3.1 Firm Characteristics
Figure 1
Employment Size Distribution by Industry Sector
Employment Size Band % N obs
0-9 10-49 50-249 250+
Agriculture 71.57 19.29 5.58 3.55 197
Construction 40.00 37.95 14.36 7.69 195
Personal 62.60 20.20 10.80 6.40 500
Household
Hotels 47.06 31.55 12.30 9.09 187
Transport 39.05 28.40 20.71 11.83 169
Finance 23.71 32.99 19.07 24.23 194
Real Estate 49.87 21.55 15.79 12.78 399
Education 33.17 44.23 20.19 2.40 208
Health 34.17 37.50 25.83 2.50 120
Other
Community1 48.55 27.17 15.61 8.67 173
Mining 41.57 27.53 16.85 14.04 178
Manufacturing 29.93 23.03 21.05 25.99 304
Utilities 44.87 25.64 12.82 16.67 78
Total 45.66 27.33 15.68 11.34 2,902
As we observe from Figure 1, there is tremendous variation in terms of the size
distribution in our sample. For example, in agriculture and the personal household
sector micro businesses dominate. By comparison, in finance, education, health and
manufacturing micro businesses have a low representation. At the opposite end of
the size distribution there is a comparatively high representation of large businesses
in manufacturing, finance, utilities and mining. Not surprisingly, these are all sectors
where economies of scale are important.
1 Other Commmunity includes: Sewage and Refuse Disposal and Sanitation; Activities of membership
orgnaisations; Recreational, cultural and sporting activities; Other service activities; Private households
employing staff.
11
Average business size, as measured by sales turnover, exhibits substantial variation
across industry sectors. Broadly, there are seven sectors where average sales are
well in excess of £25m per annum (finance, transport, construction, mining and
manufacturing) and six sectors where sales are well below £15m (utilities, other
community, health, education, hotels and agriculture). However, we note that the
median business in all sectors bar finance, transport, manufacturing and mining is
has sales of £1m or less per annum. Or put another way, the typical business in
most industries is very small.
Figure 2
Distribution of Head Quarters Location by Industry Sector
UK Europe Rest of World
Agriculture 90.00 0.00 10.00
Construction 86.96 13.04 0.00
Personal 79.37 12.70 7.93
Household
Retail/Hotels 100.0 0.00 0.00
/Catering
Transport 67.50 17.50 15.00
Finance 50.88 12.28 36.84
Real Estate 72.04 8.60 19.36
Education 89.13 2.17 8.70
Health 100.0 0.00 0.00
Other 93.55 6.45 0.00
Community
Mining 56.00 18.00 26.00
Manufacturing 50.00 20.41 29.59
Utilities 52.38 19.05 28.57
Total 72.18 11.58 16.24
12
From Figure 2, we observe that, in total, the vast majority of businesses operating in
the UK have their head quarters in the UK (72.18%). A further 11.58% have
European head quarters and 16.24% are based outside the UK and continental
Europe. Yet these aggregate figures hide some considerable variation across the
different industry sectors. For example, agriculture, construction,
retail/hotels/catering, education, health and other community (social and personal
services) are dominated by indigenous businesses. This strongly contrasts with
finance, mining, manufacturing and utilities in which businesses are, broadly
speaking, equally likely to be located in foreign countries. Whilst this may, in part,
reflect the different stages and patterns of globalisation and production across
sectors, it might also be indicative of the sectors where UK businesses need to be
more productive to compete on an international basis. It also suggests that Europe
and the UK are more integrated in business terms than the UK and North America
where only 9.32% of businesses have their HQs located.
We also observe that only in the finance sector do the majority of businesses operate
at a single operating site. In agriculture the reverse is true. Here only 13.3% of
businesses operate at a single site. For most sectors, between 60% and 70% of
businesses operate at multiple sites. This might imply that co-ordination problems
are an important feature of business activity in most sectors (Cowling and Harding,
2003).
The median age of businesses can be an indicator of the relative maturity and
stability of the business stock and markets, which may in turn be an important factor
in the way businesses formulate their strategies. The median business in the
aggregate sample is 20 years old. In a comparative sense, education, health, mining
and utilities have a relatively young business stock. This contrasts with agriculture,
construction and manufacturing where the median age of the business stock is 10
years older than the UK median.
Next we consider the proportion of the business stock in each industry sector which
is younger than 5 years old i.e. genuinely new businesses. This might be considered
as an indicator of the level of dynamic, entrepreneurial competition and/or the
absence of significant barriers to entry. The results are interesting and highlight
some very significant sectoral differences. In the hotel sector, for example, new
business entry is highest at 15.4% of the total current stock. In personal household,
utilities, mining, and other community sectors new business presence is also
13
comparatively high with figures in excess of 10% of the total stock. Yet in health the
equivalent figure is only 3.7%. Low figures are also apparent in manufacturing
(4.3%), education (4.7%), agriculture (4.9%) and construction (6.0%). Relationships
between strategy and new business entry into markets will be explored in more detail
in subsequent sections of the report.
Next we focus on the nature of corporate governance, here differentiated by size
class (measured by employment). This is important as it provides detailed evidence
on the nature of ownership and control in business, an issue which lies at the heart of
agency theory. The size class definitions are standard and defines a micro business
as having 0-9 employees, a small business as 10-49, a medium-sized business 50-
249 employees and a large business as 250+ employees. From Table 3, we observe
that board size increases with size class of business. Micro businesses, typically
owner-managed, typically have two owners who both act as directors and managers.
This form of governance is termed ‘closely held’ and is associated with a perfect
alignment of ownership and control which means that there is no scope for managers
to pursue their own interests to the detriment of owners as they are one and the
same. There is little evidence either that this form of very small business has any
outside input into its decision-making process as very few have outside non-
executive directors (NEDs).
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Figure 3
Governance by Size Class of Business
Micro Small Medium Large
Mean Median Mean Median Mean Median Mean Median
Working 2.0 2 2.5 2 4 3 10.5 4
Directors
Non – Execs 0.5 0
Managers 2.0 2
Shareholders 7532 2
FTEs 2.5 2
1 0 1.5 1 2.5 1
6 4 15 10 88 10
360 2 2,610 2 10,451 1
24 22 120 102 4,597 613
As we move up to the small size class of business (10-49 employees), we observe
that ownership and control typically remains closely held, but there are additions to
the management team beyond the owning group, as more managers are hired to
organise the expanded workforce. In the medium size class of business (50-249
employees), board size increases and also tend to include a non-executive director.
The size of the management team also increases, but not in proportion to
employment. This implies that managerial span of control rises as the organisation
of work becomes more formalised and structured and employees become more
routinised in terms of the tasks they fulfil. A significant minority of medium-sized
business also begin to have highly diversified ownership structured as shares are
traded on public markets. At this stage the potential for agency problems to arise
increase substantially [Cowling, 2003]. This essentially refers to informational
problems between owners and managers or more explicitly where a business has
lots of shareholders they find it more difficult to control managers and align their
interests with the motivations of shareholders.
3.2 Summary
In this section we have presented evidence concerning the basic characteristics of
businesses (size, age, location of HQ, single/multiple site, legal status) and
disaggregated our statistics by industry to sector to paint a fuller picture of patterns
within and across industry sectors. In every aspect measured we observe
differences across industry sectors that need to be kept in mind for the remainder of
this report.
2 The large mean number of shareholders in micro businesses is the result of outliers who are likely to have sold
shares on secondary stock markets.
15
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Section 4
Health & Safety Risk and Skills
In this section we consider the nature of the industry sectors businesses operate in
and consider how businesses sit within this context. Specifically, we explore issues
surrounding skills and health & safety, as we a priori hypothesise that skills and
health & safety might be intrinsically linked. Once again we disaggregate our
findings by broad industry sector and by size class of business3. The five key survey
statements were:
− Our business views managing health & safety as a strategic activity
− We see good health & safety performance as being cost positive
− There is a board level commitment and responsibility for the health & safety track
record of our business
− Our business sees health & safety as a critical part of good people management
− We empower our employees to act if they encounter health & safety risks, even if
that means stopping work
In each case, the respondent is required to state to what extent they agree or
disagree with the statements. Potential responses are (1) strongly disagree, (2)
disagree, (3) neither agree or disagree, (4) agree, (5) strongly agree.
Figure 4 depicts how businesses measure up to the industry standard for skills. This
is calculated as the average skills level for each industry sector as defined by
respondents when asked the question “our industry is characterised by high skill
levels” with responses strongly disagree, disagree, neutral, agree, and strongly
agree. Then is benchmarked against the reported skill level of each business as
stated by the businesses themselves in our sample. We choose to focus on the tail of
businesses that fall below the stated benchmark (as defined by each business) to
assess the scale of a skills deficient business stock within each industry. The
findings suggest the extent of this under-skilled tail varies very significantly across
3 We note here that survey responses are self-reported and this can potentially lead to an upward bias i.e. more
favourable outcomes reported. However, self-reported outcome variables are a common feature of large-scale
government surveys (see Workplace Employment Relations Surveys) and analysis of self-reported outcomes is
widely accepted by academics and government statisticians. In this survey, for example, on many of our performance
variables there is a fairly normal distribution, even on soft performance measures which suggests that respondents
are being reasonably honest.
17
industry sectors. For example, in construction and retail/hotels/catering (both sectors
with very different average skills levels) the tail of poorly skilled businesses is very
small. Thus nearly all businesses operate around the benchmark for their industry
which is intuitively what we might expect. In the former this is a high-skills
equilibrium. In the latter this is a, comparatively, low-skills equilibrium.
Figure 4
Skills and Health & Safety Risk
% businesses below industry Business manages significant
skills benchmark H&S risk (scale 1 to 5)
Sector
Agriculture 15.48 4.30
Construction 0.83 4.49
Personal Household 5.43 3.77
Rehoca 1.64 4.40
Transport & Comms 5.66 4.04
Finance 12.24 3.04
Real Estate 11.57 3.10
Education 7.41 3.33
Health 10.34 4.21
Other Community 10.14 4.23
Mining 18.52 3.78
Manufacturing 17.24 3.76
Utilities 21.43 4.29
Employment Size
0-9 9.01 3.67
10-49 9.82 3.80
50-249 5.84 3.94
250+ 8.99 3.77
18
Ignoring utilities due to a small number of cases, we also note that manufacturing,
mining and agriculture all have a relatively large tail of businesses that fall below the
industry skills benchmark. In each case it is in excess of one in every six
businesses. A pairwise correlation (showing the level of association between two
variables) shows that external training days are negatively associated with being
below the industry skills benchmark (pwcorr = -0.074).
By employment size, we observe that medium sized businesses are the least likely to
fall below their industry skills benchmark, despite having the highest skills
requirements. With this result excepting, we note that there is very little variation
between micro, small and large businesses. It is also a worrying picture for large
business, who have a comparatively low skills equilibrium, but still have nearly 9% of
businesses struggling to keep up. But the picture overall suggests that the majority
of UK businesses are not deficient in skills when compared to their industry average ,
as less than 10% of businesses in any size class are falling below their industry skills
benchmark.
As we observe, perceptions of health & safety risks appear to be an important feature
for large numbers of businesses across an array of sectors. In particular, we note
that business in the construction, retail/hotels/catering, agriculture, health, other
community and utilities sectors all have to manage significant risks surrounding
health & safety issues. This strongly contrasts with finance, real estate and
education where this is, on average, of much less importance to businesses. A
pairwise correlation shows that health & safety risk is positively correlated with
average days absence due to illness or injury (pwcorr = 0.149***). However, we note
that absence may be unrelated to work issues.
From our business size class data, we observe that from micro to medium sized
business there is a fairly linear and positive relationship between managing
significant health & safety risk and size of business, and these differences are
significant (F=6.58, Prob = 0.0002) using a test of the variance across groups. Yet
after this we note that the largest size class of business are less in agreement with
the need to manage H&S risk than our small business size class.
4.1 Summary
The key findings regarding health & safety are that certain sectors, namely
construction, retail/hotels/catering, agriculture, health, other community and utilities,
19
all perceive there to be a higher degree of risk. This suggests that businesses might
need to actively manage this risk to health & safety to a greater degree than in other
sectors of the economy. We also note that medium sized businesses tend to operate
in environments where they have to manage health & safety risks to a greater degree
than larger or smaller businesses. Further, we note that a substantial minority of
businesses, particularly those in mining, utilities, manufacturing and agriculture, have
a relatively under-skilled workforce. If there is a link between skills and health &
safety (and this is investigated later in this report) this could be an issue. The
evidence on skills suggests that there is a small core of UK businesses who are
operating below the average for their respective industries.
20
Section 5
Health & Safety Strategy
In this section we present our evidence on the relationship between businesses and
a number of aspects relating to health & safety. The issues we deal with are:
whether health & safety is seen as a strategic activity; whether investment in health &
safety is seen as being cost-positive in terms of improving the bottom line; whether it
is dealt with at board level; whether it is seen as being a part of good people
management; and the degree to which employees have autonomy to act on issues
relevant to their health & safety.
21
Figure 5
Health & Safety Strategic Issues
Managing H&S Board Level H&S Critical Employees
H&S is a Performance Commitment to Good Have
Strategic is Cost to H&S People Autonomy to
Issue Positive (scale 1 to 5) Management Act on H&S
(scale 1 to 5) (scale 1 to 5) (scale 1 to 5) (scale 1 to 5)
[Where 1 is strongly disagree and 5 is strongly agree]
Sector
Agriculture 4.43 4.47 4.61 4.68 4.70
Construction 4.58 4.52 4.72 4.74 4.84
Personal 4.30 4.44 4.45 4.55 4.58
Household
Rehoca 4.57 4.56 4.63 4.72 4.75
Transport & 4.33 4.52 4.49 4.61 4.64
Comms
Finance 3.88 4.20 4.40 4.35 4.45
Real Estate 4.09 4.31 4.44 4.45 4.52
Education 4.52 4.62 4.59 4.69 4.77
Health 4.49 4.50 4.62 4.71 4.70
Other 4.55 4.54 4.72 4.68 4.67
Community
Mining 4.59 4.60 4.73 4.66 4.76
Manufacturing 4.30 4.50 4.67 4.62 4.74
Utilities 4.62 4.58 4.82 4.80 4.78
Employment Size
0-9 4.27 4.38 4.41 4.52 4.59
10-49 4.35 4.44 4.66 4.59 4.72
50-249 4.50 4.62 4.77 4.71 4.73
250+ 4.43 4.56 4.69 4.60 4.70
From Figure 5, we observe that managing health & safety as a strategic issue
generally ranks as important or very important. Yet we also observe that in a number
of sectors, notably finance and real estate it is deemed to be significantly less
important (F=9.61, Prob = 0.00001) using a test of variance across groups. This
contrasts with construction, retail/hotels/catering, other community, mining and
utilities where a particularly high level of strategic significance is attached to
managing health & safety. There is also a degree of variation across business size
22
classes. The relationship here is quite interesting as it is initially rising in importance,
at an increasing rate as we move from micro to medium sized businesses. Yet for our
largest size class of businesses the level of strategic importance tails off, although it
is still higher (F=6.58, Prob=0.0002) than for small and micro businesses. This
suggests that micro business in particular may be failing to address strategic issues
surrounding the management of health & safety in the workplace or that they do not
see it as an issue.
On the importance attached to the management of health & safety in the context of
business strategy, we observe that businesses in the finance and real estate sectors
put relatively low importance to this issue. This strongly contrasts with businesses in
utilities, mining, construction and retail/hotels/catering, all of who regard the
management of health & safety as a very important strategic activity.
Whether or not business decision-makers believe that a good health & safety record
actually improves business performance will, to a large degree, impact on the
amount of resources devoted to improving workplace conditions, and minimising
risks to the welfare of employees. The data suggests that whilst there is general
agreement that it does, in some sectors businesses are less positive about this. For
example, once again we observe that businesses in finance and real estate are less
likely to believe health & safety performance as boosting the bottom-line. This
strongly contrasts with those in education, mining and utilities who agree very
strongly that it does. A pairwise correlation of these two variables shows a highly
significant, and strongly positive relationship between commitment to health & safety
at a strategic level and the belief that good health & safety performance is cost-
positive (pwcorr = 0.566***). If the latter is true, then this implies that a sector based
initiative to promote good health & safety practice in certain laggard sectors might be
a means of spreading good practice and promoting awareness of the benefits of
good health & safety to businesses, although in certain sectors risk may not be as
high and lower reported levels of commitment may reflect this. Formal testing of any
potential linkages between strategic commitment to health & safety and performance
will be reported in subsequent chapters.
Regarding business size class effects, we note that the basic pattern in the data
shown is very similar to that for the importance attached to health & safety as a
strategic activity. Here again as we move from micro to medium sized businesses
the belief that health & safety performance is cost-positive rises and at an increasing
23
rate, than tails off slightly for larger businesses. Taken together, these two findings
suggest that micro businesses are not managing health & safety as an issue of
strategic importance because they are less likely to believe that it will improve their
bottom lines.
In terms of whether or not there is a commitment and responsibility at board level for
the health & safety record of businesses, we observe that commitment is relatively
low in four sectors, namely; personal household, transport, finance and real estate.
This commitment is well below that reported in construction, other community, mining
and utilities and implies that there is less leadership on health & safety issues in
these former four sectors. However, this could, at least in part, be related to
differences in actual health & safety risk across sectors.
Perhaps not surprisingly these very same sectors are also least likely to view health
& safety issues as being a part of good people management. This contrasts with the
level of agreement with this association in the construction, retail/hotels/catering,
education and utilities sectors. In terms of business size effects, we note that micro
businesses are significantly less likely to have a board level commitment or
responsibility for health & safety. We note that the concept of a formal board is less
relevant to micro businesses, however, they are also the least likely to view health &
safety as being a critical part of good people management. Once again we could
conclude that there appears to be a cultural problem with getting owners of micro
businesses to realise the importance of integrating health & safety management into
strategic decision-making, although to give a definitive answer we would need further
evidence to prove that micro businesses face higher actual health & safety risks.
The extent to which employees have the power to act in situations where they
encounter health & safety risks is explored too. Here again we observe that
businesses in the personal household, transport, finance and real estate sectors are
least likely to empower employees in this way. Yet businesses in construction,
utilities, education, mining, retail/hotels/catering and manufacturing are very likely to
do so. This former evidence may reflect a relative lack of commitment to health &
safety or it may be an issue of trust between management and employees in certain
sectors. Or there may be less need to empower employees due to lower risks in
these sectors.
24
Whilst we generally observe a high level of agreement across businesses of all size
classes that employees have the autonomy to act on health & safety issues, it is still
evident that micro businesses are lagging behind all larger size classes of business
on this issue.
Figure 6
Average Employee Days Off Due to Illness or Injury
0
1
2
3
4
5
6
ag
ricu
ltu
re
co
nstr
uctio
n
pe
rso
na
l
ho
use
ho
ld
ho
tels
tra
nsp
ort
fin
an
ce
rea
l e
sta
te
ed
uca
tio
n
he
alth
oth
er
co
mm
un
ity
min
ing
ma
nu
factu
rin
g
utilit
ies
avera
ge d
ays o
ff p
er
an
nu
m
Finally, we present evidence concerning the number of days lost through employee
absence due to illness or injury. A note of caution is required as this measure
includes non-work related illness and injury, and thus may not reflect true health risk
in the workplace. The average employee in our sample of businesses lost 4.15 days
in the last year. This equates to 2486 days off for the average business in our
sample. If we multiply this by the median wage per employee (calculated as total
wage bill divided by full-time equivalents), the total cost to the average business is
£153,247 or put alternatively a loss of nearly 7 full-time employees for a whole year
from an average of 152 employees.
From Fig 6, we observe that employees in the health, other community and
manufacturing sectors, on average have the most days off due to illness or injury and
those in retail/hotels/catering, agriculture and real estate the least. A correlation
between average days off per employee and our five health & safety items shows
that four are highly significant at the 1% level (health & safety is a strategic activity,
25
health & safety cost positive, board commitment and part of good people
management). Employee empowerment shows no significant association.
Figure 7
Average Employee Days Off Due to Illness or Injury
0
1
2
3
4
5
6
micro small medium large
avera
ge d
ays o
ff p
er
an
nu
m
Regarding business size class, we note that employees in micro businesses, on
average, take fewer days off per annum than those in all other size classes of
business. The difference is substantial between micro businesses and all other size
classes of business who report very similar figures for absenteeism. This is rather
perplexing as micro businesses are significantly behind all other size classes of
business when it comes to managing health & safety. However, we note that there
may be a wide range of other psychological factors that determine the level of
sickness absence in micro businesses.
We also collected data on expenditure on health & safety per annum. To make it
more meaningful we divided this expenditure by number of full-time employees (fte)
to get an average health & safety spend per fte. Fig 5.1.3 highlights the very
substantial differences in terms of average expenditures on health & safety across
industry sectors. We observe that in the transport, mining and utilities sectors
expenditure is very high. Clearly this will be affected by sector specific regulations
and legislation, which might explain some of this discrepancy. However, we a priori
might have anticipated that expenditure in construction, agriculture and perhaps
26
manufacturing might be higher given that the former two sectors are widely regarded
as being risky industries. This could, in part relate to the large number of contractors
and part-time employees in these sectors although a correlation between health &
safety spend per full-time equivalent and part-time employment share is not
significant (correlation = 0.0029).
Figure 8
Average Expenditure Per Full Time Employee on Health & Safety
0
1000
2000
3000
4000
5000
6000
7000
ag
ricu
ltu
re
co
nstr
uctio
n
pe
rso
na
l h
ou
se
ho
ld
ho
tels
tra
nsp
ort
fin
an
ce
rea
l e
sta
te
ed
uca
tio
n
he
alth
oth
er
co
mm
un
ity
min
ing
ma
nu
factu
rin
g
utilit
ies
£ p
er
em
plo
yee
27
Figure 9
Average Expenditure Per Full Time Employee on Health & Safety
0
500
1000
1500
2000
2500
3000
micro small medium large
£ p
er
em
plo
yee
From Figure 9, we observe very substantial differences in terms of average
expenditure on health & safety per full-time equivalent employee (fte). Small
businesses spend, on average, £2762 per annum on health & safety, which is five
times that of medium sized businesses. Micro businesses also have a comparatively
high expenditure at £1334 per fte. We suggest that there may be economies of scale
in the provision of health & safety that clearly favours larger businesses. Further, the
very smallest micro businesses might be exempt from some of the regulatory
requirements, which would account for their average expenditure being lower than
small businesses. This, of course, assumes that these differences are so large that
they are not capturing only a discretionary element of spending which would
otherwise imply that small business owners are so concerned about health & safety
that they are willing to invest five time as much per employee than medium sized
businesses.
28
Figure 10
Median Expenditure Per Full Time Employee on Health & Safety
0
100
200
300
400
500
600
agriculture
co
nstr
uctio
n
pers
onal
household
re/h
o/c
a
tra
ns &
co
mm
s
fin
an
ce
real esta
te
education
health
oth
er
co
mm
un
ity
min
ing
ma
nu
factu
rin
g
utilit
ies
£ p
er
em
plo
yee
Figure 10 is perhaps a more accurate representation of health & safety expenditure
and refers to median spend per fte. Here we observe that the median spend per fte
per annum is £200. We note that in utilities this is highest at £500, in
retail/hotels/catering £333 and in mining £300. By far the lowest median spend is in
finance at £29. Considering business size, we note that the range is much smaller,
falling between £175 in micro businesses to £213 in large businesses. However,
there is no significant relationship between health & safety spend per fte and health &
safety risk as identified by businesses (pwcorr=0.044).
From these five strategic items we can develop a single health & safety index using
the standard methodology adopted in a body of human resource and strategy
literature dating back thirty years (seminal works include Arthur, 1994, Delery and
Doty, 1996, Ichniowski et al, 1997). Assuming that high correlations between
variables are indicative of complementarities (see Nunnally and Bernstein, 1994), we
note that of the ten correlations all ten are positive and significant at the 1% level. To
test for reliability of the five items that form our health & safety index we calculate the
Cronbach’s alpha, this assesses the reliability of a summative rating scale of the five
items specified.
Our scale is simply the sum of the individual item scores. The reliability α is simply
the square of the correlation between the measured scale and the underlying factor.
29
The scale derived from our index appears to work well with the estimated correlation
between it and the underlying factor item measures is √0.8315 ≈ 0.9119, and the
estimated correlation between this battery of five items and all other five item
batteries from the same domain is 0.8315. The alpha test denotes the additive scale,
here 0.4967 which is the average inter-item correlation and 0.8315 is the alpha
coefficient for a test scale based on all items. Sign shows the direction each item
variable entered the scale, here all items are positive. This procedure is also
repeated for five other strategic areas, namely; shareholder value; stakeholder value;
customer & markets; innovation and people. The respective α coefficients are
0.6964, 0.6390, 0.7343, 0.6921 and 0.7450. Full estimates and derivations are
reported in Cowling et al (2005).
There are also two important correlations between actually spending money on
health & safety and, if the business does, the scale of expenditure. Firstly, we find a
negative correlation between actively having a health & safety budget (derived from
the health & safety expenditure variable and coded 1 if business has any spend and
0 if no spend) and scoring highly on the H&S index (pwcorr = -0.100**). This implies
that a strategic commitment to health & safety is not typically associated with a
spending commitment. Yet there is a significant correlation between the health &
safety index and health & safety spend if the business has a health & safety budget
(pwcorr=0.052*).
The fact that only 29% of businesses had any explicit health & safety budget
allocation, and the two correlations reported above, leads us to question whether or
not businesses choose to allocate any funds to an explicit health & safety budget
because they are likely to release significant funds to health & safety once the initial
decision has been made. The alternative is that this decision is randomly made
across businesses. This means that there are no key defining characteristics e.g.
sector, age, size etc that can identify businesses who do and don’t. With this in
mind our next step was to estimate two further equations using the procedure
proposed by Heckman (1987). In brief we estimate two equations. The first is a
binary probit model coded 1 if the business has any explicit funds allocated to health
& safety and zero otherwise. The second equation is estimated only for those
businesses that had any funds allocated at step 1 and estimates the determinants of
scale of health & safety spend per fte. To capture strategic commitment to health &
safety we also use two different proxies in alternative model specifications. Firstly,
30
we use health & safety risk and secondly the health & safety index. A priori, we
expect that both should be positively associated with health & safety expenditure.
Our results (from Step 1) show that construction businesses are significantly more
likely to allocate funding to health & safety than those in any other sector. By
contrast, education and health, and retail/hotels/catering were three sectors where
businesses were least likely to have an explicit health & safety budget. We also note
that large businesses were also the least likely to have an explicit budget allocation.
Interestingly, neither of our strategic commitment to health & safety variables made a
difference to funding commitments.
From Step 2, we observe that businesses in retail/hotels/catering and utilities, once
they hade made a commitment, tended to have a much larger expenditure per
employee on health & safety. The reverse was true for businesses in the personal
household, finance, health and other community sectors. An interesting finding was
that once micro businesses had made the initial commitment, their health & safety
spend was comparatively large. And here we also note that businesses facing the
highest degree of health & safety risk also had the highest expenditure, somewhat
reassuringly, as did those with a strategic commitment to health & safety. Finally, we
see that the selection term is not significant in either model. This implies that the
initial decision to commit to a health & safety budget is random and not related to the
scale of the budget allocation once this decision has been made. It would appear
that this decision arises out of a more significant strategic commitment to good health
& safety practice as a desirable business goal, even though the initial decision is
unaffected by this. From all of this, we might suggest that the health & safety decision
and funding allocation process goes like this;
31
Yes
Yes
Hi
Do we want to spend money on health and safety?
No
Are we going to make a strong strategic commitment?
No
Low Spend gh Spend
5.1 Linking Health & Safety index and other Strategic Indices
In line with our a priori hypothesis that integrated and complementary strategy
making will yield better performance than isolated decision-making we will now test
for any basic associations between health & safety performance defined by our
health and safety index and our five indices covering other areas of strategic
decision-making namely; shareholders; stakeholders; innovation; customers &
markets, and; people (see Cowling et al, 2005, for full details on construction and
estimation of these indices). What we predict is that businesses scoring highly on
other indices will also be more likely to have higher scores on our health & safety
index. In short, there will be a positive association between strategic commitment to
health & safety and strategic commitment to performing well in other areas of the
business. This is important as health & safety is not commonly seen as having equal
status with other business areas.
32
The procedure we adopt is to estimate five basic bivariate regressions, corrected for
heteroskedasticity, with our health & safety index as the explanatory variable i.e. on
the right-hand-side of the equation. Simply we can write it as:
Strategy Index Score = f (health & safety index score)
Figure 11
Bivariate Regression Models for the Impact of Health & Safety on Strategic Indices
Strategic Index Constant Coefficient
(t-stat)
Adjusted R
squared
N Obs
Shareholder 0.05 0.30
(16.89) 0.08 2694
Stakeholder 0.12 0.45
(40.11) 0.30 2881
Innovation 0.05 0.35
(19.51) 0.10 2843
Customer &
Markets 0.04
0.32
(14.86) 0.06 2885
People 0.04 0.38
0.22 2881 (32.57)
From Figure 11 we first note that all models are significant, although the extent to
which our health & safety index can explain the variation in our five other strategic
indices varies quite substantially. The highest explanatory power is for our
stakeholder index (30%), although the people model is reasonably high too at 20%.
By contrast, the lowest level of explanatory power is for customer & markets at only
6%. In terms of the signs and strengths of the health and safety index coefficients
across models (direction of association and impact), we firstly observe that in all
cases health & safety is positively associated with other strategic indices i.e. better
health & safety index scores are associated with higher index scores in our five other
strategic domains. In terms of the magnitude of the coefficients (an indicator of the
strength of the association that health & safety has) we observe that the largest effect
is on the stakeholder index and the smallest on the shareholder index. The people
effect is also large. Thus our findings have some degree of logical consistency in
that we might have expected that health & safety is more linked in with good people
33
management and taking the concerns of the wider community into account than
primary shareholder objectives. More generally though, we find that high levels of
commitment to health & safety is associated with high strategic commitment to other
core business functions.
5.2 Modelling H&S Strategy
Next we estimate five ordered probit models, one for each health & safety strategy.
The modelling procedure reflects the nature of the dependent variable which is coded
from 1 to 5 where 1 = strongly disagree and 5= strongly agree. On the right-hand-
side of each model we include basic business specific characteristics in order to
isolate any potentially important differences across business sectors, size class, age,
country of ownership and employment characteristics.
Health & Safety Variable = f (sector, size, age, country, part-time employment share,
region, average wage)
5.2.1 Managing Health & Safety is a Strategic Issue
The first point of note is that agreement with the statement that ‘managing health &
safety is a strategic issue’ rises with business size (Fig 12). The effect is fairly linear,
and implies that the smaller a business is, the less likely they are to take a strategic
view on health & safety management. This micro firm effect is not apparent across
the full range of health & safety issues.
34
Figure 12
Managing Health & Safety is a Strategic Activity (base=micro business)
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
micro small medium large
coefficient
There are also some identifiable regional effects. For example, business located in
Wales, Scotland and the North West are significantly more likely to view managing
H&S as a strategic activity than businesses in all other areas of the UK. This may
suggest that region specific characteristics e.g. culture and/or historical legacy plays
an important role. This holds even when age, size, sector and a host of other
characteristics are held constant i.e. it is a region specific effect.
At the industry sector level, Fig 13 shows that two sectors are significantly higher
than the average in terms of the importance attached to managing H&S as a
strategic activity and three significantly lower. The least importance is found in the
finance sector, followed by real estate and manufacturing. The greatest importance,
on average, is found in retail/hotels/catering and construction. Whilst the latter
findings are reassuring due to the comparatively high accident rate in construction
the fact that manufacturers place such low emphasis on health and safety
management is rather disconcerting. The zero’s here indicate no significant
difference compared to the reference category.
Finally, we observe that business age is not an important determinant of strategic
emphasis on managing health and safety. Nor was country of ownership or part-time
share of employment or labour quality. To conclude, we find that business size and
sector are the two most critical determinants of how much strategic emphasis
businesses place on managing health and safety.
35
Figure 13
Managing Health & Safety as a Strategic Activity by Sector
-1
-0.8
-0.6
-0.4
-0.2
0
0.2
0.4
0.6agriculture
constr
uction
pers
onal
household
re/h
o/c
a
trans &
com
ms
finance
real esta
te
education
health
oth
er
com
munity
min
ing
manufa
ctu
ring
utilit
ies
5.2.2 Health & Safety Performance Is Cost Positive
Next we focus on the extent to which businesses agree with the statement that health
& safety performance is cost positive. This essentially seeks to capture whether or
not businesses associate a good health & safety record as having a positive
monetary impact on the bottom line. By implication, if businesses believe this to be
the case then greater expenditure and consideration might be given to health &
safety issues.
36
Figure 14
Health & Safety Performance is Cost Positive (base = micro)
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
micro small medium large
coefficients
As we observe from Fig 14, businesses with less than 50 employees are the least
likely to agree that health & safety performance is cost positive. And further, that
larger businesses are more likely to agree than medium sized businesses. This
might suggest that smaller businesses view health & safety as having a lower level
importance rather than as a key area of strategic management that contributes to a
healthier level of business performance. As our previous production function analysis
shows that health & safety strategies, when bundled with other strategies, are cost-
positive, we implicitly assume that smaller businesses are mistaken in their
assumptions.
There are also some important regional differences apparent. Here we observe that
business located in Wales, Northern Ireland, Scotland and the North West are
significantly more likely to agree that health & safety performance is cost positive.
These effects are fairly large in magnitude and suggest important unobserved
differences.
Industry sector is another area where we might expect to observe substantial
differences across businesses in terms of their views on health & safety. Yet in this
case we note that only in financial services is there less agreement with the
contribution of health & safety to performance.
37
38
Figure 15
Health & Safety Performance is Cost Positive and Business Age
-4.5
-4
-3.5
-3
-2.5
-2
-1.5
-1
-0.5
0
5 10 15 20 25 30 35 40 45 50
age of business
Figure 15 shows the relationship between age of business and strength of agreement
or disagreement with the statement that health & safety performance is cost positive.
As we observe, as businesses grow older they are significantly less likely to agree
that health & safety performance has a positive impact on overall business
performance. This might imply that older businesses are likely to pay less attention
to health & safety issues, or that further improvements to health & safety have a
declining marginal impact on costs.
Finally, we note that non-European or US owned businesses are less likely to agree
that health & safety performance is cost positive. Yet there appears to be no
differences between high and low wage businesses, nor those who employ large
numbers of part-time workers.
39
5.2.3 Board Level Commitment and Responsibility for Health & Safety
Here we report on the extent to which business agree, or disagree, with the
statement that “there is board level commitment and responsibility for the Health &
Safety track record of our business”. We begin by considering employment size
effects.
Figure 16
Board Level Commitment and Responsibility for Health & Safety
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
micro small medium large
coefficient
Using micro businesses (<10 employees) as our reference category, Fig 16 shows
that boards in medium and large sized businesses are significantly more likely to
have a commitment to, and be prepared to take responsibility for, health & safety. In
small businesses (10-49 employees) average commitment is around half that of
medium and large sized businesses. This might imply that key decision-makers or
boards in micro and small businesses are essentially leaving it up to individual
employees to take responsibility for health & safety.
Once again we also observe some regional variation with businesses located in the
North West, Scotland and Northern Ireland more likely to take responsibility and have
a commitment to health & safety than those located in other regions of the UK. We
also observe a lack of importance amongst businesses in the personal household,
financial services and real estate sectors. Finally, we note that business from outside
40
of Europe and the US are strongly less likely to have boards committed to and
responsible for health & safety.
5.2.4 Health & Safety is a Critical Part of Good People Management
Here we report on the extent to which business agree, or disagree, with the
statement that “health & safety is a critical part of good people management”. We
begin by considering employment size effects.
Using micro businesses as our reference category, Fig 17 shows that agreement that
health & safety is critical to good people management rises, in a fairly linear way,
with size of business. That is to say that the larger a business is the higher the
probability that health & safety is viewed as an important part of managing people.
Figure 17
Health & Safety is a Critical Part of Good People Management
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
micro small medium large
coefficient
We also observe some considerable regional variation on this issue. Here we note
that businesses located in Scotland, North East, Wales, Yorkshire & Humberside and
the North West all have a higher level of general agreement that health & safety is an
important part of managing people successfully. This once again hints as some
important cultural differences across the regions of the UK in terms of their
41
commitment to health & safety. And again, we see that the same sectors, personal
household, financial services and real estate, have the lowest level of agreement.
5.2.5 Employees Empowered to Act on Health & Safety Issues
Here we report on the extent to which businesses agree, or disagree, with the
statement that, “we empower our employees to act if they encounter Health & Safety
risks, even if that means stopping work”. We begin by considering employment size
effects.
Figure 18
Employees Empowered to Act on Health & Safety Issues
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
micro small medium large
coefficients
From Fig 18, we again observe that the larger a business is the more the general
level of agreement to allowing employees a degree of autonomy to act if health &
safety risks occur. Yet in this instance the pattern is not linear, and strongly identifies
the huge lack of agreement to employee empowerment in micro businesses, even
when compared to small. However, this might also be explained by there being less
need to empower employees working in small teams.
Aside from this the geographical and sectoral results broadly remain the same as for
our other health & safety statements, with generally higher levels of agreement in
Northern regions (including Scotland) and lower levels in financial services and real
estate. Yet we do observe a negative age effect, which is significant and shown in
Fig 19 below.
42
Figure 19
Business Age Effects on Employment Empowerment to Act on Health & Safety
-4.5
-4
-3.5
-3
-2.5
-2
-1.5
-1
-0.5
0
5 10 15 20 25 30 35 40 45 50
From Fig 19, we note that as businesses get older employees appear to get less
autonomy to act on health & safety risks if they occur in the workplace. This, when
combined with our finding that older businesses were also less likely to view health &
safety expenditure as being cost positive, is potentially disconcerting as businesses
may be less likely to invest in health & safety and also less likely to allow employees
to act thus creating a generally negative position on health & safety issues. An
alternative interpretation is that older businesses have well developed health & safety
strategies and procedures and thus the requirement for further commitment is lower.
43
5.3 Summary of Health & Safety Modelling
We have estimated five ordered probit models, one for each of our health & safety
strategies. The results show a degree of consistency across models, particularly with
respect to business size, sector and geographical region, and to a lesser extent
business age. Taken in order, we find evidence that the smaller a business is the
less likely they are to have a positive attitude towards health & safety issues, or to
regard it as a key strategic area. This might represent a significant challenge to HSE
given the huge numerical dominance of small businesses and the fact that they
employ around half of the nations workforce. As our previous productivity analysis,
and the performance analysis in this report shows a positive association between
health & safety strategy and business performance, the results imply that health &
safety is an important strategic area regardless of size of business.
We also find that older businesses tend to have less agreement that health & safety
is an important strategic issue. Sectorally, we note that financial services and real
estate have a consistently negative attitude towards health & safety as an important
area of strategic decision-making, or as a key part of good people management. Our
findings at the regional level strongly show that businesses located in the Northern
regions of England together with Scotland and Wales have a much more positive
attitude about health & safety issues and recognise the role it can play in good
people management. Our findings at the regional level strongly show that businesses
located in the Northern regions of England together with Scotland and Wales have a
much more positive attitude about health & safety issues and recognise the role it
can play in good people management. Why this is the case is less clear, but cannot
be ignored. This is unrelated to the size, age and sectoral mix of businesses within
specific geographical locations which are held constant in the modelling procedure.
In terms of associations with health & safety measures, here proxied by our health &
safety index, we also observe some interesting correlations. These are shown in Fig
20 below.
44
Figure 20
Correlations between Business Objectives and H&S Strategic Index
0 0.05 0.1 0.15 0.2 0.25 0.3 0.35
shareholder
stakeholder
market share
growth
innovation
great workplace
profit
quality
coefficient
Thus we observe the highest correlations between the health & safety strategic index
and creating a great place to work, innovation, stakeholder value and growth. The
lowest correlation, although it remains statistically significant at the 10% level is with
profit. This suggests that a strategic commitment to health & safety is strongly
aligned with businesses wishing to deliver high levels of job enrichment to their
employees, those wishing to deliver innovative new products and services, and those
with high levels of engagement with the wider community, including suppliers.
45
Section 6
Performance Analysis
In this section we consider an array of business performance measures. To get as
full a picture as possible we draw on a total of 13 alternative measures (see Figure
21 Appendices for full details of measures) both hard and soft. Our general
approach is to simply estimate, in a multivariate framework, the impact of strategy,
and particularly strategic bundles, on performance whilst holding business
characteristics (age, sector, legal status etc) constant.
Performance = F (strategy + business characteristics + health & safety + region) (1)
In terms of the actual measures of performance we use, they can be broadly
allocated to two categories, hard and soft. The soft performance measures relate to
survey items (variables) in which the businesses are asked to effectively benchmark
themselves against their industry sector as perceived by themselves. The hard
performance measures refer to measurable items, generally derived from financial
data collected from businesses (e.g. sales turnover).
Using a variety of econometric methods, determined by the nature of the variable
from Figure 21 (see appendices) we are seeking to model, we now focus on the core
results for our six strategic indices (shareholder value, stakeholder value, customers
& markets, innovation, people and health & safety) and test for any associations
between actual health & safety expenditure. Fuller results for all performance
measures are reported in detail in Cowling et al (2005). These core results are
presented in Figure 22 (see appendices).
Having tested our six strategic indices against a total of twelve different measures of
performance, we now summarise our findings. The top-line finding of our analysis is
that our six strategic indices have a statistically significant (at the 10% level or lower),
and positive, impact on performance in 23 out of a potential 72 cases, or put
alternatively, around 32% of the time. In terms of which strategic indices have the
biggest impact, measured in terms of how many positive and significant effects
identified, we note that the People Index and the Customers & Markets Index were
both associated with better performance in 6 out of 12 cases. Importantly, none had
any negative impacts. Next we found that the Innovation Index was associated with
better performance in five out of twelve cases. The Shareholder Index and
46
Stakeholder Index both had three positive impacts and the Health & Safety Index
one.
As to how our strategic indices perform in terms of having an impact on our array of
hard and soft performance measures, we observe that there are some important
differences. For example, four of our indices had an impact on businesses ability to
keep up to the industry technology benchmark. This, however, may relate to the
broad nature of the absence variable as discussed previously. It was also the case
that different indices had different types of impacts. For example, the People Index
tended to be more associated with better performance on measures capturing skills
and technology related performance, whilst the Customers & Markets Index had a
greater impact on measures like market position, exporting and new technology sales
intensity. The Shareholder Index, by contrast, was associated with better
performance on market position and sales growth. Thus, in general, we note that our
strategic indices seem to be having the greatest associations in the performance
areas that we might have, a priori, expected which is reassuring.
Regarding Health & Safety spend per fte, an additional measure of hard commitment
to employee welfare, we note that in no case was spending more on health & safety
associated with a worsening of performance. This implies that at the very least
spending money on health & safety is neutral in that it is balanced out by a
proportional increase in performance. However, in three instances we observed that
spending more on health & safety was associated with improved performance. First
of all, it was associated with a business having a higher capability of attracting good
quality employees from the industry pool. This suggests that higher H&S spend
sends a positive signal to potential employees. Secondly, amongst the existing
workforce, higher H&S spend was associated with improved employee commitment
as businesses are observed making a positive commitment to the welfare of their
employees. Thirdly, higher H&S spend was associated with faster sales growth
rates, measured over three years. Taken together, our performance results, across a
range of measures, strongly suggest that spending on health and safety is
associated with tangible improvements in employee related aspects of the business,
which could in turn be associated with measurably better bottom line outcomes
47
Section 7
Conclusions
In this study, our start hypothesis was that the key to achieving high levels of
business performance is to develop complementary strategies across all areas of the
business because it is the overlapping and mutually reinforcing effect of multiple,
synergistic practices that have, potentially, the largest impact. However, we again
caution that our survey data was cross-sectional and thus our findings are indicative
of associations rather than as direct evidence of causality.
The current study had two fundamental objectives: Firstly, it aims to provide up-to-
date evidence of the current state of UK business in terms of attitudes to health &
safety, the extent to which businesses incorporate health & safety into strategic
decision-making, how, if at all, this links into other areas of strategic decision-making,
and if this is associated with improved performance. Secondly, it aims to identify
complementary bundles of strategies that are associated with observable high
performance. To achieve this we conducted an extensive telephone survey of 3,000
UK businesses. This concluding section will summarise our evidence and draws out
key issues surrounding health & safety that are of importance to businesses and
government policy-makers.
Our general approach is under-pinned by the a priori belief that health & safety is a
key area of strategic decision-making that cannot be considered in isolation by
businesses, and one which should be integrated into other areas of strategy to
ensure not only consistently in terms of planning, but to achieve maximum impact on
business performance outcomes. Our basic evidence suggests that health & safety
risk is an important feature for large numbers of businesses across an array of
sectors. In particular, we note that construction, retail/hotels/catering, agriculture,
other community and utilities are sectors that have to manage perceived risks
surrounding health & safety.
Managing health & safety as a strategic issue generally ranks as important or very
important for UK businesses. The exceptions are in the real estate and finance
sectors. However, we find strong and consistent evidence that the smaller a
business is, the less likely they are to have a positive attitude towards health & safety
issues, or regard it as a key strategic area for their business. It is also apparent that
older businesses deem health & safety as less of a strategic concern, although this
48
may be because they have well developed measures in place, and further that those
in financial services and real estate have a consistently negative attitude towards
health & safety as a key strategic area of decision-making, or even as a critical part
of good people management. This may not be a problem if the health & safety risk is
lower in these sectors , and this might also be applied to smaller firms although the
broad body of evidence on health & safety issues suggests otherwise (i.e. more
accidents in small firms).
In terms of complementarities with broad business objectives, the highest
correlations between our health & safety strategy index are with creating a great
place to work, innovation, stakeholder value, and business growth. The lowest
correlation is with profit motives. This could suggest that a strategic commitment to
health & safety is strongly aligned with a desire to deliver high levels of job
enrichment to employees, to create an environment supportive of creativity and
innovation, and to engage with the wider community, including suppliers.
In terms of business performance, we find that our health & safety strategic index, on
its own, only has a statistically significant association (at the 5% level) with one
measure of performance, helping businesses to create a workforce whose skill levels
are above the industry benchmark for their sector. Regarding health & safety
expenditure per fte, we note that there is no evidence that spending more is
associated with a lower level of business performance. This could imply that higher
spending is associated with a proportional increase in performance which balances
this out. But in three cases we observe that higher health & safety expenditure is
associated with superior performance. Here we find that it was correlated with
businesses having a greater capacity to attract quality employees from the industry
pool (at the 5% level), with higher employee commitment (at the 10% level), and
faster sales growth (at the 1% level). The first two findings could suggest that
employers that are observed as being committed to health & safety are sending a
positive signal to their existing workforces and potential employees that they are a
‘good’ employer concerned about the welfare of their employees. The latter could
suggest that this feeds through to improved output growth. Taken as a whole, our
performance models, across a wide range of indicators, could suggest that a
strategic commitment to good health & safety practice does businesses no harm, and
a spending commitment is strongly associated with tangible improvements in
employee related aspects of the business.
49
This study is consistent with a previous and related study on productivity (see
Cowling et al, 2005). The key finding from that study was that a composite strategy
index, encompassing strategic decisions across managerial functions, including
health & safety, was found to be associated with higher productivity. This was taken
to be evidence consistent with the hypothesis that bundling of complementary
strategies has a greater impact on performance than individual, un-coordinated
strategic decision-making. The fact that health & safety strategies formed a large
component of the composite strategy index implies that businesses that co-ordinate
and align health & safety strategy with other core business strategies will tend to be
associated with superior performance.
50
Section 8
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Section 9
Appendix 1
Figure 21
Performance Measure Definitions
Performance Measure Item
Business above industry innovation
standard
Business attracts good quality employees
from other companies in the industry
Our market position, relative to our
competitors, is strong
How many days a year does an average
member of staff take off because of illness
or injury
The majority of our employees demonstrate
a high level of commitment to this business
Do you sell your products or services in the
UK only, overseas, or both
What % of your total customers are based
outside the UK
What % of your total sales was exported
What % of your total sales was accounted
for by a product or service that uses
technology not available a year ago
Compared to three years ago, has your
turnover increased, decreased or stayed the
same
What % has your turnover increased /
decreased from three years ago
Gross Profit (weighted by industry)
Workforce above industry skills standard
Business innovation level – industry
innovation level
Scale 1-5 (ordered variable)
Scale 1-5 (ordered variable)
Number of days (continuous variable)
Scale 1-5 (ordered variable)
Three responses possible
Percentage (continuous variable)
Percentage (continuous variable)
Percentage (continuous variable)
Three responses possible (ordered variable)
Percentage (continuous variable)
Sales – Costs (labour, capital, materials)
Business workforce skills level – industry
skills level
57
Figure 22
Performance Outcomes Summary Table
Performance Strategy Index
Measure
Shareholder Stakeholder H &S Innovation Customers People
(H&S £/fte) & Markets
Technology 0 + 0 + + +
Benchmark (0)
Attract Quality 0 0 0 + + +
Employees (+)
Competitive + + 0 0 + 0
Market Position (0)
Employee - 0 0 0 0 0
Absence (+)
Employee 0 + 0 + 0 +
Commitment (+)
Exporter 0 - 0 0 + 0
(0)
Export Intensity 0 - 0 + 0 0
(0)
3 year Sales + 0 0 0 0 +
Growth (+)
Skills 0 - + - 0 +
Benchmark (0)
% Foreign - - 0 0 + 0
Customers (0)
New 0 0 - - 0 +
Technology (0)
Sales
New 0 0 0 + + 0
Technology (0)
Sales Intensity
58
Work & Enterprise Special Report 2006:
A report prepared for Health & Safety Executive
Section 10
Appendix 2
Figure 23
Sample Statistics
Variable Mean S.D Minimum Maximum Median
Gross Output £m 27.70 95.20 0.03 980.0 0.90
FTEs 598.63 6359.38 1.00 9950.0 6.00
Capital £m 10.60 59.50 0.00 3,360.00 0.017
Materials / Output 0.23 0.21 0.00 1.00 0.20
59
Figure 24
Business Performance
Variable (1) (2a) (2b) (3) (4) (5)
Technology New Technology New Technology Business Attracts Market Position Average Days Off
Benchmark Sales (yes) Sales Intensity Good Quality Strong Compared Per Employee
Employees to Competitors
Coeff Z stat Coeff Z stat Coeff Z stat Coeff Z stat Coeff Z stat Coeff T stat
Health & Safety 0.00 0.78 -2.62 0.19 0.00 0.28 0.00 1.97 -0.00 0.70 -3.24 0.13
Spend per FTE
Region
West Midlands
East Midlands 0.06 0.34 0.06 0.29 -0.01 0.08 -0.13 0.85 -0.11 0.95
East 0.09 0.53 -0.06 0.27 -0.35 2.08 -0.01 0.06 -0.09 0.83
London 0.30 1.86 0.19 1.02 0.12 0.76 0.01 0.04 -0.12 1.23
North East -0.48 2.01 0.02 0.08 -0.31 1.34 -0.08 0.38 -0.50 3.40
North West -0.08 0.51 0.12 0.63 0.06 0.39 0.02 0.14 -0.14 1.32
South East 0.26 1.71 -0.19 1.00 0.00 0.03 0.19 1.40 -0.10 1.06
South West 0.04 0.22 -0.35 1.68 -0.02 0.12 -0.07 0.48 -0.13 1.23
Yorks & Humber -0.01 0.04 0.13 0.64 0.04 0.26 -0.04 0.25 -0.08 0.78
Wales 0.19 0.99 -0.19 0.74 0.10 0.54 0.15 0.89 -0.01 0.04
Scotland -0.04 0.19 0.50 2.04 -0.05 0.26 0.30 1.54 -0.23 1.77
N.Ireland 0.39 1.56 -0.31 0.80 -0.09 0.36 0.10 0.38 -0.10 0.59
Sector
Agriculture
Construction 0.02 0.10 0.45 1.91 -0.79 1.92 0.15 0.83 0.20 1.33 -0.13 1.02
Personal -0.27 1.66 0.49 2.29 -0.88 2.25 0.08 0.47 0.21 1.59 -0.03 0.25
Household
Retail, Hotels, -0.46 2.15 0.18 0.63 -0.50 1.03 -0.19 0.87 0.27 1.45 -0.21 1.32
60 © The Work Foundation.
Catering
Transport 0.02 0.12 -0.17 0.63 -0.25 0.57 0.46 2.33 0.07 0.44 -0.12 0.92
Finance -0.07 0.34 0.31 1.19 -0.60 1.37 0.06 0.27 -0.27 1.66 -0.22 1.59
Real Estate 0.01 0.04 0.12 0.51 -0.60 1.50 0.26 1.48 0.23 1.66 -0.08 0.66
Education -0.03 0.13 0.29 1.12 -1.07 2.41 0.26 1.18 0.31 1.83 -0.24 1.63
Health 0.07 0.25 -0.03 0.09 -0.29 0.54 0.14 0.52 0.29 1.42 -0.16 0.92
Other Community 0.17 0.84 0.31 1.16 -0.45 1.04 0.22 1.05 0.37 2.11 -0.03 0.24
Mining -0.14 0.73 0.19 0.77 -0.45 1.11 0.11 0.58 -0.19 1.20 -0.05 0.37
Manufacturing -0.08 0.48 0.10 0.45 -0.63 1.57 -0.06 0.35 0.14 0.99 -0.14 1.12
Utilities 0.26 1.02 0.73 2.33 -0.59 1.21 -0.18 0.72 0.11 0.48 -0.12 0.71
Single -0.24 2.78 0.06 0.55 -0.20 1.33 0.15 1.70 0.02 0.25 -0.11 2.05
Establishment
Employment Size
0 – 9
10 – 49 -0.16 1.57 -0.28 2.18 0.10 0.52 0.26 2.56 0.04 0.48 0.14 2.28
50 – 249 0.02 0.14 -0.19 1.21 0.49 2.22 0.46 3.62 0.08 0.67 0.32 4.23
250 + 0.00 0.00 -0.14 0.71 0.44 1.58 0.66 4.23 0.23 1.61 0.51 5.41
Part-Time 0.04 0.30 0.12 0.73 0.12 0.50 -0.12 0.95 0.15 1.41 0.29 3.28
Employment Share
Ltd Liability 0.10 0.86 0.27 1.80 -0.34 1.67 0.07 0.58 -0.09 0.86 0.01 0.14
Performance -0.01 0.06 -0.17 1.46 -0.21 1.26 0.39 4.25 0.02 0.30 -0.03 0.46
Related Pay
Coverage
LnWage 0.01 0.41 -0.01 0.17 0.04 0.95 -0.01 0.45 -0.05 1.93 -0.01 0.70
Technology Use
Tried and Tested
Develops Own 0.40 4.38 0.53 4.81 0.22 1.25 0.03 0.33 0.31 3.75 -0.05 0.90
Buys in Early Stage 0.55 5.40 0.51 4.27 0.39 2.12 0.23 2.29 0.15 1.70 0.02 0.26
Attitude to Risk
61
Averse
Neutral 0.03 0.34 -0.13 0.00 -0.26 1.65 -0.02 0.19 0.08 1.19 0.04 0.65
Loving 0.02 0.23 -0.00 0.77 -0.23 1.15 0.08 0.76 0.04 0.42 -0.04 0.58
R&D Active 0.06 0.75 0.29 2.86 -0.04 0.21 0.17 2.19 -0.06 0.90 0.01 0.14
Training Active 0.25 2.19 0.22 1.52 -0.50 2.18 -0.08 1.30 -0.14 1.48 -0.05 0.64
LnAge -0.01 0.24 0.06 1.32 -0.25 3.48 -0.05 1.30 -0.00 0.00 -0.01 0.28
Age squared 0.00 0.27 0.00 1.56 -0.00 0.79 0.00 1.07 -0.00 1.31 0.00 1.22
VAT Registered 0.08 0.70 0.00 0.01 -0.23 1.08 -0.05 0.42 -0.10 1.03 -0.17 2.08
Strategy Indices
Shareholder 0.05 0.89 0.01 0.08 -0.06 0.59 0.04 0.67 0.16 3.52 -0.08 2.27
Stakeholder 0.18 2.66 -0.01 0.09 0.17 1.40 -0.04 0.65 0.15 2.78 0.01 0.15
Health & Safety -0.07 1.25 -0.15 2.05 -0.02 0.22 0.01 0.13 0.08 1.60 0.01 0.29
Innovation 0.35 3.22 -0.25 1.78 0.47 2.12 0.20 3.70 0.07 1.54 0.01 0.20
Customers & 0.09 2.04 0.02 0.29 0.20 2.33 0.11 2.58 0.10 2.55 0.04 1.45
Markets
People 0.29 3.27 0.22 1.95 -0.11 0.59 0.72 4.83 0.09 1.27 -0.07 0.98
Constant -2.93 4.88 6.07 5.18 1.60 2.61
N Obs 1090 1372 1086 1585 893
Prob > χ2 0.000 0.0000 0.00001 0.00001 0.00001
01 1
Adj Rsq 0.06
Pseudo Rsq 0.31 0.10 0.06
62
Figure 25
Business Performance, Part 2
Variable (6) (7a) (7b) (8) (9) (10)
Employee Exporter (yes) Export Intensity Skills Benchmark 3 Year
Commitment Sales Change %
Coeff Z stat Coeff Z stat Coeff Z stat Coeff Z stat Coeff Z stat Coeff T stat
Health & Safety 0.00006 1.64 0.00 0.16 0.00 0.14 0.03 0.41 0.0001 2.37
Spend per FTE
Region
West Midlands
East Midlands 0.22 1.18 0.05 0.25 0.08 0.48 0.02 0.01
East 0.17 0.98 0.20 0.97 0.03 0.16 0.08 0.06
London 0.14 0.91 0.64 3.53 -0.17 1.11 -0.50 0.42
North East 0.37 1.57 0.13 0.48 0.11 0.49 3.03 1.73
North West -0.08 0.51 0.23 1.18 0.00 0.02 0.96 0.76
South East 0.26 1.70 0.27 1.50 0.03 0.24 -0.16 0.14
South West 0.09 0.54 0.34 1.79 -0.05 0.30 1.76 1.39
Yorks & Humber 0.06 0.35 0.25 1.22 0.03 0.20 0.99 0.74
Wales 0.19 0.98 0.16 0.70 0.17 0.09 0.40 0.27
Scotland 0.36 1.48 0.39 1.54 -0.04 0.22 0.78 0.46
N.Ireland 0.08 0.27 0.86 2.69 -0.09 0.36 1.25 0.56
Sector
Agriculture
Construction -0.08 0.44 -0.20 0.89 3.77 0.35 -0.01 0.06 0.67 0.49
Personal Household 0.13 0.85 0.47 2.52 1.70 0.22 0.47 2.93 -2.01 1.70
Retail, Hotels, Catering -0.11 0.55 0.46 1.81 -5.09 0.48 0.58 2.71 -0.90 0.56
Transport 0.14 0.78 0.56 2.62 13.26 1.54 0.29 1.54 -0.90 0.63
Finance 0.10 0.52 0.09 0.40 5.51 0.59 0.06 0.31 -3.94 2.61
63
Real Estate 0.31 1.87 0.38 1.96 -0.66 0.08 -0.10 0.55 -1.76 1.42
Education 0.30 1.48 0.32 1.37 26.69 2.79 -0.10 0.46 -3.16 2.11
Health 0.46 1.84 -0.65 1.59 -21.65 0.92 -0.37 1.40 0.82 0.46
Other Community 0.51 2.42 -0.19 0.72 -3.51 0.31 -0.02 0.09 -1.73 1.16
Mining 0.17 0.91 1.00 4.73 13.84 1.63 -0.03 0.17 -1.43 1.00
Manufacturing 0.12 0.73 1.07 5.49 9.61 1.21 0.00 0.03 -2.40 1.88
Utilities 0.13 0.48 0.42 1.51 0.94 0.09 -0.43 1.71 -2.36 1.21
Single Establishment 0.21 2.25 0.12 1.20 -0.68 0.18 0.01 0.10 -0.72 1.04
Employment Size
0 – 9
10 – 49 -0.41 3.94 0.12 1.07 0.21 0.05 0.05 0.54 0.12 0.15
50 – 249 -0.59 4.61 0.17 1.19 0.46 0.09 0.03 0.26 0.77 0.79
250 + -0.57 3.67 0.20 1.13 6.05 1.01 0.05 0.36 0.81 0.68
Part-Time Employment -0.43 3.41 -0.31 2.08 -4.84 0.75 0.34 2.76 -0.01 0.01
Share
Ltd Liability -0.04 0.29 0.31 2.24 2.78 0.63 -0.16 1.40 0.39 0.41
Performance Related Pay 0.13 1.40 0.22 2.20 -8.17 2.28 0.06 0.65 0.86 1.26
Coverage
LnWage 0.02 0.71 0.04 1.09 -0.21 0.18 -0.04 1.42 -0.18 0.88
Technology Use
Tried and Tested
Develops Own -0.08 0.86 0.48 4.74 14.44 3.61 0.02 0.21 1.72 2.44
Buys in Early Stage -0.06 0.62 0.31 2.74 4.48 1.05 -0.01 0.13 1.15 1.48
Attitude to Risk
Averse
Neutral
Loving
R&D Active -0.12 1.52 0.34 3.76 4.45 1.18 0.00 0.03 -1.37 2.28
Training Active -0.30 2.50 0.07 0.53 -0.14 0.03 -0.19 1.61 -0.22 0.26
64
LnAge 0.04 1.07 0.11 2.67 1.52 1.03 -0.02 0.70 0.79 2.86
Age squared -0.00 0.03 0.00 0.28 -0.02 0.36 0.00 0.23 -0.01 0.90
VAT Registered -0.03 0.28 0.31 2.25 -9.22 1.60 0.13 1.08 -0.76 0.90
Strategy Indices
Shareholder 0.02 0.42 0.10 1.57 -1.48 0.64 0.04 0.74 1.29 3.17
Stakeholder 0.14 2.30 -0.27 3.76 -6.42 2.29 -0.14 2.18 0.75 1.53
Health & Safety 0.04 0.64 -0.10 1.60 -0.84 0.36 0.12 2.06 -0.57 1.30
Innovation 0.25 4.72 0.03 0.52 3.46 1.69 -0.09 1.78 0.00 0.00
Customers & Markets -0.07 1.53 0.06 1.13 1.45 0.77 -0.04 0.93 -0.23 0.71
People 0.53 3.96 -0.03 0.32 0.65 0.19 0.31 2.18 2.06 3.13
Constant -3.38 6.20 17.73 6.91 2.07
Selection term -0.80 0.10
N Obs 1596 1442 1098 1620
Prob > χ2 0.00001 0.00001 0.00001 0.00001
Adj Rsq 0.03
Pseudo Rsq 0.15 0.07
65
Section 11
Contact details
Prepared by:
Marc Cowling
Principal Economist
Institute for Employment Studies
University of Sussex
Brighton BN1 9RF
Stephen Bevan
Director of Research
The Work Foundation
Peter Runge House
3 Carlton House Terrace
London
SW1Y 5DG
Tel: 020 7004 7193
66 © The Work Foundation.
Published by the Health and Safety Executive 09/07
Health and Safety Executive
Work and Enterprise Panel 2Business survey
This report is intended to provide uptodate information on UK business attitudes, intentions and performance vis a vis health and safety in the workplace. In addition, it aims to provide robust empirical evidence concerning any linkages and impacts of health and safety strategy and expenditure on an array of hard and soft performance measures of intermediate and final business performance. We also consider how health and safety issues interact with key strategic decisions in other core business areas to achieve the greatest impact on observable performance.
This report and the work it describes were funded by the Health and Safety Executive (HSE). Its contents, including any opinions and/or conclusions expressed, are those of the authors alone and do not necessarily reflect HSE policy.
RR589
www.hse.gov.uk