What Happens to Workplace Safety During a Recession?

The world’s biggest economies, U.S., China, and Europe, are showing signs of economic weakness and point to the future challenges ahead. It seems that we’re slowly but heading towards a recession. Global economic growth prospects are hindered by several factors, including Russia’s invasion of Ukraine, higher interest rates to lower inflation, and the lingering effects of the COVID-19 pandemic. In spite of growing evidence of a global slowdown, policymakers should continue to focus on containing inflation, as it’s contributing to a cost-of-living crisis, impacting vulnerable groups the most. Most nations are expected to experience a decrease in the growth rate of GDP as 2023 progresses, and there’s a heightened risk of recession.

Accidents at work happening is an essential economic phenomenon in the sense that ill health shows up in monetary transactions, so managers should allocate vast resources to priority areas as far as occupational health and safety is concerned. Unfortunately, during economic downturn periods, enterprises strive to save money, efforts which materialise in the lack of investment in workplace safety. It’s more cost-effective to pay the nominal fees for breaching workplace safety standards and refute personal injury claims than it is to put more resources into a safer work environment.

Many Workers Face the Risk of Being Involved in Accidents

According to the International Labour Organization, 2.3 million individuals worldwide succumb to accidents at work and diseases every year. Around the globe, there are roughly 340 million occupational accidents and 160 million victims of work-related diseases annually. Accidents at work are closely connected to workplace safety, i.e., safety measures to protect employees and business property. Even if every job involves some risk of injury, the extent of risk varies across geographic regions, sectors, jobs, and people. Occupational injury rates tend to be higher in low- and middle-income countries yet declining in high-income countries. The Great Recession, which began in December 2007 and ended in June 2009, had a negative effect on workplace safety as companies downsized, restructured, and outsourced/transferred work.

Individuals in precarious or vulnerable work arrangements experience more issues than others, meaning they have twice the risk for occupational injury. The reason for this is that they have less job experience, are ignorant of workplace hazards, and they’re received inadequate or ineffective safety training. Undeterred by the higher rates of accidents at work, these employees have lower absence rates, fearing job loss. A workplace accident can result in pain and disability, affecting the victim’s life. Disruptions to production and bad publicity following the accident are just some examples of costs for businesses. There’s also a huge cost in terms of human suffering for the family.

Workplace Safety Tends to Decrease During an Economic Downturn

Not only are recessions inevitable, but they’re also a necessary part of the economic cycle. Indeed, the process is painful to many, but recessions bring the markets back down to earth, setting the stage for recovery. Recessions almost always occur in cycles that can be predicted by major social, environmental, and economic factors. The global pandemic of the coronavirus pandemic, for instance, can lead to a recession that will ultimately affect organisations. Enterprises would have to do more with less when it comes to managing staff and delegating job responsibilities. People who experience accidents at work will report such incidents, but there’s no guarantee that management will make an investment to reduce the probability of them happening in the next period.

During economic downturns, companies reduce workplace safety budgets or reduce investments in new safety technology and equipment. Additionally, layoffs can lead to a decreased emphasis on safety procedures and training. Letting go of employees with on-the-job experience, who are more reliable, typically results in more workplace accidents because those employed during a recession are less likely to follow the safety protocol. An individual who’s suffered physical, emotional, or financial harm due to the employer’s negligence can submit a personal injury claim to recover compensation. For more information, please visit https://www.accidentclaims.co.uk/accident-at-work-claim. There’s a time limit for starting a claim, which is usually three years.

Recessions Influence the Reporting of Moderate Accidents at Work

In times of high unemployment, people are reluctant to report moderate work accidents, assuming that employers will hold it against them. Simply put, the probability of dismissal is high. More often than not, employers retaliate against injured workers by firing them or issuing a penalty if the issue is brought to the attention of the authorities, which isn’t legal by any means. If someone is fired during a recession, it can take a long time to find a new job. It doesn’t, therefore, come as a surprise that employees refrain from reporting incidents. Going by this logic, the unemployment rate or change shouldn’t affect fatal work accidents.

It’s up to individuals who experience moderate accidents at work to decide whether or not to bring such incidents to the attention of their employers. Employers use various tactics to avoid reporting a work-related accident, such as seeking alternative diagnostic tests. In most countries, recording occupational accidents and diseases and informing the competent authorities is an obligation. Employers ought to set up mechanisms to make it easier for employees to provide the necessary information to supervisors, ensure the policies in place prevent retaliatory measures, and promote that workers comply with the requirements. Improvements in safety and health at work can bring economic advantages for both businesses and society.

Concluding Thoughts

As business leaders seek areas for cost reduction during a recession, it’s paramount not to create unnecessary risks. There’s a strong correlation between macroeconomic conditions and accidents at work attributed to hazardous working conditions, physical exertion, and job-related stress. Reporting a work-related accident puts a dent in the reputation of the company and raises the probability that the person is fired, which translates into the fact that accidents at work are mostly unreported. The crisis will pass at some point, but there’s no guarantee that normal business conditions will return. Committing to safety reflects the long-term vision of leadership, and for some organisations leadership is lacking.

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