Development of Cost Estimation Tools for Total Occupational Safety and Health Activities and Occupational Health Services: Cost Estimation from a Corporate Perspective

Tomohisa Nagata; Koji Mori; Yutaka Aratake; Hiroshi Ide; Hiromi Ishida; Junichiro Nobori; Reiko Kojima; Kiminori Odagami; Anna Kato; Akizumi Tsutsumi; Shinya Matsuda

doi:10.1539/joh.13-0277-FS

Abstract

Objectives: The aim of the present study was to develop standardized cost estimation tools that provide information to employers about occupational safety and health (OSH) activities for effective and efficient decision making in Japanese companies. Methods: We interviewed OSH staff members including full-time professional occupational physicians to list all OSH activities. Using activity-based costing, cost data were obtained from retrospective analyses of occupational safety and health costs over a 1-year period in three manufacturing workplaces and were obtained from retrospective analyses of occupational health services costs in four manufacturing workplaces. We verified the tools additionally in four workplaces including service businesses. Results: We created the OSH and occupational health standardized cost estimation tools. OSH costs consisted of personnel costs, expenses, outsourcing costs and investments for 15 OSH activities. The tools provided accurate, relevant information on OSH activities and occupational health services. Conclusions: The standardized information obtained from our OSH and occupational health cost estimation tools can be used to manage OSH costs, make comparisons of OSH costs between companies and organizations and help occupational health physicians and employers to determine the best course of action.

(J Occup Health 2014; 56: 215-224)

Introduction

Occupational safety and health (OSH) activities are conducted as part of business administration and entail corporate costs. Companies have to adhere to legal, financial and moral requirements of OSH¹⁾, and employers have to consider the welfare of their employees and provide adequate OSH to ensure that activities are efficient and productive. Employers have a need for relevant and comparable information so that they can prioritize their budget and thus attain the greatest OSH gains for their workforce^2–4). OSH staff implement OSH activities according to a company's individual policies while at the same time maintaining communication with employers and employees and attempting to provide the highest quality OSH at an appropriate cost⁵⁾.

OSH costs are not wasted expenses but an investment in prevention. Especially in occupational health (OH) services as forms of health management and health promotion, OH costs are a human resource investment for improvement of health and wellness and enhancement of productivity. When employers make a decision about OSH, they need two kinds of information. One type is a detailed breakdown of OSH costs. A chart of accounts and clearly defined account titles are needed. The other type is the ratio of OSH costs in terms of total corporate costs. To obtain such information, OSH costs have to be comparable to costs in business accounting. However, there are no previous studies that have conducted cost estimation according to standard business accounting practices to our knowledge.

Cost analysis is a part of economic evaluation. Economic evaluation studies can be conducted from the perspective of an employee or an employer or from a societal and national perspective⁶⁾. The definition of the costs varies according to the different viewpoints; therefore, in economic evaluations, we need to define which perspective is being taken^{7, 8)}. However, many studies have not described the analysis perspective, and we can only use their data to a limited extent⁶⁾. Traditionally, a societal perspective is recommended, and in principle, all costs and consequences regardless of who pays or gains are included⁸⁾. However, results from this broad approach may be difficult to apply to decision making in the workplace from an employer's perspective^9–11). Moreover, company-level economic evaluations of possible interventions can provide guidance for sound business decision making12), but such studies use a diversity of methodological approaches¹³⁾. Among the previous studies, costs have not been calculated using uniform account titles, and the calculation method has not been standardized.

The aim of this study was to develop standardized cost estimation tools for total OSH activities in Japanese companies. Often, different departments have implemented occupational safety activities and OH services in Japan, and we therefore also developed cost estimation tools for total OH services.

Snapshot of the Japanese occupational safety and health system

The Industrial Safety and Health Law enacted in 1972 has contributed much to the progress of OSH activities in Japan¹⁴⁾. The main OSH activities written in the law are health checkups to be conducted at least once a year, measurements of specified chemicals and other measurements in the working environment to be conducted twice a year as a general rule and risk assessments and establishment of safety and health committees and workplace patrols. Workplaces regularly employing 50 workers or more are required to appoint an industrial physician. The industrial physician shall be a person who meets the requirements provided for by the ordinance concerning knowledge of occupational medicine by completing a 50-hour occupational health training course. In Japan, there were approximately 83,000 certified industrial physicians among approximately 275,000 medical doctors in 2012.

Subjects and Methods

We use activity-based costing methods that have previously been used to calculate healthcare treatment costs^{15, 16)}.

Definition of costs

OSH costs have often been divided into costs for prevention and costs of loss. Costs for prevention are the costs required to implement OSH activities, e.g., personnel costs, expenses and investments. Costs of loss are the equivalent of an employee's health-related loss, e.g., absence from work due to accidents, injuries, and diseases and health-related productivity loss, sometimes referred to as “presenteeism”¹⁷⁾. In the context of economic evaluation, the costs for prevention are often counted in the costs, and the costs of loss are often counted in the consequences. However, the total sum of costs for prevention and costs of loss can sometimes be considered as net costs. To provide informative data, we need the real costs of implementing OSH activities with clear definitions and detailed breakdowns of the costs. In this study, we defined the costs as just the costs for prevention and did not include the costs of loss.

Workflow of occupational safety and health activities

We used the workflow of health checkups as one example of OSH activities. We divided the health checkup workflow into three phases: a preparatory phase, implementation phase and follow-up phase. Table 1 shows a breakdown of the heath checkup workflow.

Table 1. Workflow and costs of a health checkup operation

The preparatory phase comprises the activities for preparing health checkups. A target company uses an outsourcing institute. OSH staff communicate with line managers to prepare health checkups. In the implementation phase, we have to calculate the opportunity costs of examinees. In the follow-up phase, occupational health professionals analyze the results of health checkups.

Listing the cost items of occupational safety and health activities

Five professional occupational physicians discussed and listed all OSH activities and identified the work flow for each activity and the management of resources (production, human and financial) required. Two safety specialists evaluated the list from a safety viewpoint. All OSH activities are listed along with the composition elements of costs in Table 2.

Table 2. Cost items of occupational safety and health activities

	Items stipulated in laws and regulations in Japan	Safety items	Health items
A. Personnel costs for occupational safety and health staff
Occupational physician	✔		✔
Occupational nurse			✔
Health supervisor	✔		✔
Safety supervisor	✔	✔
Working environment measurement expert			✔
Health and safety promoter		✔	✔
Safety promoter		✔
Health promoter			✔
Dietitian			✔
Clerk		✔	✔
Manager		✔	✔
Rank-and-file employee		✔	✔
Board member (e.g., health and safety officer)		✔	✔
Others		✔	✔
B. Cost of each activity
B1. Emergency response and support
Emergency escape drill	✔	✔
Emergency life guard drill		✔	✔
Equipment (fire extinguisher)	✔	✔
Equipment (AED)		✔	✔
Equipment (emergency box)	✔	✔	✔
Others
B2. Equipment and fixtures
(1) Local exhaust ventilation	✔		✔
Equipment (new)	✔		✔
Equipment (existing)	✔		✔
Regular inspection	✔		✔
Education and training			✔
(2) Smoking room			✔
Equipment (new)			✔
Equipment (existing)			✔
Regular inspection			✔
Education and training			✔
(3) Other equipment (e.g., heavy goods vehicle)		✔	✔
Equipment (new)		✔	✔
Equipment (existing)		✔	✔
Regular inspection		✔	✔
Education and training		✔	✔
(4) Personal protective equipment	✔		✔
Personal protective equipment	✔		✔
Maintenance	✔		✔
Education and training			✔
B3. Working environment measurement, exposure measurement
(1) Working environment measurement	✔		✔
Measurement (outsourcing)	✔		✔
Measurement (insourcing)	✔		✔
Meeting			✔
Equipment (measurement instruments)			✔
Calibration (measurement instruments)			✔
(2) Exposure measurement			✔
Measurement (outsourcing)			✔
Measurement (insourcing)			✔
Meeting			✔
Equipment (measurement instruments)			✔
Calibration (measurement instruments)			✔
B4. Health checkup
(1) Health checkup			✔
General health checkup	✔		✔
Specific health checkup	✔		✔
Health checkup based on administrative guidance			✔
Reexamination			✔
Secondary examination			✔
Others			✔
(2) Investigation for health impairment			✔
Health checkup			✔
B5. Health management
(1) Face-to-face guidance with employees			✔
Face-to face guidance by physician			✔
Face-to face guidance by nurse			✔
Face-to face guidance by other professionals			✔
(2) Face-to-face guidance with superior / human resources			✔
Face-to-face guidance with superior			✔
Face-to-face guidance with human resources			✔
(3) Overwork countermeasures	✔		✔
Assessment of physical and mental condition	✔		✔
Face-to-face guidance for workers with long working hours	✔		✔
(4) Health education			✔
Health education			✔
B6. Mental health countermeasures
Education (care by manager)			✔
Education (self-care)			✔
Education (others)			✔
Stress survey			✔
Employee assistant program			✔
B7. Operation of occupational safety and health department
(1) Operation of occupational safety department		✔
Education and training for staff		✔
Participation in conference		✔
Expendables		✔
Fixed assets		✔
Equipment (repair, operation and maintenance)		✔
Company cars for emergency		✔
Others		✔
(2) Operation of occupational health department			✔
Education and training for staff			✔
Participation in conference			✔
Clinical laboratory equipment (new)			✔
Clinical laboratory equipment (maintenance)			✔
Medical equipment			✔
Expendables			✔
Fixed assets			✔
Equipment (repair, operation and maintenance)			✔
Company cars for emergency			✔
Others			✔
(3) Institutions for health maintenance and promotion			✔
Training room			✔
Gymnasium			✔
(4) Information technology
Homepage		✔	✔
Health care system			✔
Other system		✔	✔
B8. Health promotion and welfare
(1) Health promotion			✔
(2) Welfare			✔
Medical treatment			✔
Vaccination			✔
Others			✔
B9. Management of occupational safety and health activities
(1) Management based on OSHMS		✔	✔
Documentation		✔	✔
Internal audit		✔	✔
External audit		✔	✔
External certification		✔	✔
Risk assessment		✔	✔
Education and training		✔	✔
Others		✔	✔
(2) Management not based on OSHMS		✔	✔
Plan, goal setting		✔	✔
Check		✔	✔
Improvement		✔	✔
Others		✔	✔
B10. Licensing, skill training courses, etc.
(1) License¹	✔	✔	✔
Class 1 health supervisor, etc.	✔	✔	✔
(2) Practical training²	✔	✔
Practical training for operation of ship lifting appliance, etc.	✔	✔
(3) Skill training course³	✔	✔	✔
Operations chief of woodworking machines, etc.	✔	✔	✔
(4) Other licenses	✔	✔	✔
Class 1 working environment measurement expert, etc.	✔	✔	✔
B11. Safety and health education
Education when hiring	✔	✔	✔
Special education	✔	✔	✔
Foreman's education	✔	✔	✔
Others		✔	✔
B12. Meeting
Safety and health committee	✔	✔	✔
Tool box meeting		✔	✔
Others		✔	✔
B13. Patrol
Workplace patrol by physician	✔		✔
Workplace patrol by health supervisor	✔		✔
Workplace patrol (others)		✔	✔
B14. Occupational accidents and injuries
(1) Insurance premium for workers' compensation	✔	✔	✔
Insurance premium for workers' compensation	✔	✔	✔
(2) Countermeasures after occupational accidents and injuries		✔	✔
Investigation of the cause		✔	✔
Recurrence prevention measurement		✔	✔
Consolation money and compensation		✔	✔
B15. Others
(1) Outside agencies
Administrative (Labor Standards Inspection Office)	✔	✔	✔
External consultants		✔	✔
(2) Occupational safety and health project		✔	✔
Project (e.g., measurement of novel influenza)		✔	✔
(3) Awareness-promotion activities
National Occupational Safety week		✔
National Occupational Health week			✔
Others		✔	✔
(4) Others		✔	✔

¹ Articles 62-72 of the Labor Safety and Health Regulations.

² Articles 73-77 of the Labor Safety and Health Regulations.

³ Articles 78-83 of the Labor Safety and Health Regulations. AED, automated external defibrillator; OSHMS, occupational safety and health management system.

Interviews about occupational safety and health activities and costs

We visited three workplaces (Z, A and B) in three different companies and interviewed full-time professional occupational physicians, department managers and OSH staff to discuss practical methods of calculating OSH costs. All workplaces were involved in manufacturing and administered OSH activities according to a management system. In this study, we required detailed information about cost estimation. For the example of OSH education, we needed to know the contents, dates, locations and hours of education and the numbers of educated employees and teaching staff. We obtained such information from the companies that had occupational safety and health management systems in place. Consequently, we developed a beta version of the cost estimation tool for OSH activities using Microsoft Excel 2010.

Costs of occupational safety and health activities

We explained how to use the beta version of the cost estimation tool to one professional occupational physician at each of workplaces Z, A and B. The physicians calculated the OSH costs through communication with department managers and staff working in OSH, human resources and finance.

After calculating the total costs of OSH, we checked with each physician to ensure that all items of costs were mutually exclusive and collectively exhaustive and completed development of cost estimation tools for OSH.

Costs of occupational health services

We removed the occupational safety activities from the cost estimation tools for OSH, and thus created cost estimation tools for OH services. We calculated the total OH costs in the workplaces of four different manufacturing companies (A, B, C and D). C and D had less than 1,000 employees.

We visited the four workplaces and confirmed the presence or absence of any possible leaked information about the OH cost estimation tools. Consequently, we developed beta version of the cost estimation tools for OH services using Microsoft Excel 2010. We explained how to use the tool, each physician calculated the OH costs, and we checked the results in the same way as mentioned above.

To obtain information regarding the personnel costs of non-occupational health staff, we interviewed four employees (two line managers and two rank-and-file employees) in workplace A, who did not work in the OSH department. We asked them how many hours in a month or a year they were required to conduct each OSH activity.

Validation of the tools

We conducted cost estimation with the OSH cost estimation tools in the other three workplaces (category of business / number of employees: services / 130, manufacturing / 115, manufacturing / 141) and with the OH cost estimation tools in one workplace (financing services / 624). We confirmed the presence or absence of any possible leaked information about the tools with the occupational physician, health supervisor and safety supervisor in each workplace.

This research was approved by the Ethics Committee of Medicine and Medical Care, University of Occupational and Environmental Health, Japan.

Results

Cost items of occupational safety and health activities

Five occupational physicians listed 13 items for OSH staff and 15 items for activities (Table 2). Ten of the 15 activities are stipulated in Japanese laws and regulations. Safety specialists recommended adding only exposure measurement. Occupational physicians recommended adding management that was not based on the occupational safety and health management system (Table 3).

Table 3. Information obtained through interviews

	OSHMS	Risk assessment	Health meeting in each department
Comment concerning an item added to the activities from the occupational physician at workplace A
“We evaluated the risk management of occupational health services. This activity was different from an internal audit of OSHMS. We patrolled all departments and investigated to what degree the activities required by laws and regulations and scheduled education were conducted. We fed back the results to all departments.”
Comments concerning difficulties with cost estimation of occupational safety and health activities
Depreciation expenses for investments in equipment
“To calculate all expenses for local exhaust ventilation, we have to check a 15-year buying history in the account ledgers. This requires a great deal of time and effort, so we cannot calculate them all.”
Cost of fail-safe devices
“Fail-safe devices are already built into the equipment, so we cannot divide costs of fail-safe devices from costs of the equipment.”
Personnel costs involved with managers coaching their subordinates on occupational safety and health
“In a daily conversation between superiors and subordinates, superiors give guidance about safety behavior or health management of subordinates. But it is difficult to determine the conversation time, so it is difficult to calculate the labor costs for them.”
Time per year for conducting occupational health tasks (hours)
Line manager	7	0	24
Line manager	56	7	30
Rank-and-file employee	5	0	4
Rank-and-file employee	10	1	20

OSHMS, occupational safety and health management system.

Classifications of costs

We implemented all OSH activities making use of management resources such as production and human resources.

In the case of production resources, from the workflow of a health checkup operation, we divided the costs into direct costs and overhead costs (Table 1). The information for direct costs can be obtained from the account ledgers of the OSH department, e.g., expenses, outsourcing costs and investment in C in Table 1. The costs were calculated for the health checkup listed in B4 in Table 2, and the cost estimation tool is shown in Fig. 1.

Fig. 1.

Cost estimation taken to calculate the cost of each activity. This is an example of a health checkup. Costs are in Japanese yen. JPY, Japanese Yen.

Capital (land, buildings and equipment), lighting, fuel and water, materials and supplies and telephone costs were allocated to the OSH department from all departments in the workplace in D in Table 1. These costs were not only used for health checkups but were also used for all OSH activities and were called overhead costs. The costs of operation of an occupational safety and health department listed in B7 in Table 2 were calculated.

In the case of human resources, we divided the personnel costs into those relating to OSH staff in A in Table 1 and those relating to non-OSH staff (line managers and employees) in B in Table 1. From a corporate perspective, the personnel costs are the costs that a company pays for human resources, which include salaries, bonuses and legal and welfare expenses. OSH staff were engaged not only in health checkups but also in all OSH activities. We calculated the personnel costs of OSH staff as total annual costs. The cost estimation tool is shown in Fig. 2. If we allocated the personnel costs of OSH staff to each activity, such as health checkups, we would have to conduct a time study of OSH staff.

Fig. 2.

Cost estimation tool for personnel cost of occupational safety and health staff. Costs are in Japanese yen. OSH, occupational safety and health; JPY, Japanese Yen.

Conversely, non-OSH staff are also engaged in OSH tasks. Employees have to be seen in health checkups. From an employer's perspective, we have to calculate the personnel costs per hour while employees excused themselves from work for health checkups. The personnel costs were opportunity costs. We calculated the personnel costs of non-OSH staff in B4 in Table 2, and the cost estimation tool is shown in Fig. 1.

Criteria for allocation of overhead costs

We decided the allocation criteria for the overhead costs below. The capital (land, buildings and equipment) costs were allocated to OSH activities in proportion to the square footage of floor space in the OSH department. The costs of lighting, fuel, water, materials and supplies and telephone service were allocated to OSH activities in proportion to the number of OSH staff among all employees. Conversely, we did not allocate the personnel costs of OSH staff to each activity because it takes a great deal of implement a time study of OSH staff.

Depreciation

We annuitized the initial capital outlay over the useful life of an asset; that is, we divided the investments into equivalent annual costs. The main statutory useful life of an asset was 4 years for an automated external defibrillator, 15 years for local exhaust ventilation and 5 years for clinical laboratory equipment.

How to use the cost estimation tool of OSH

There are three aspects to the cost estimation tool for OSH: basic information, personnel costs of OSH staff and the cost of each activity.

Basic information includes the costing period, industrial classification, coverage of cost estimation, number of employees and personnel costs per person per hour (for all employees, managers and rank-and-file employees).

The section of personnel costs for OSH staff includes each personnel cost (including bonuses, welfare expenses and various benefits), the percentage of time engaged in OSH activities and the number of staff (Fig. 2). When OSH staff engaged in OSH activities as a part of their job, the personnel costs of OSH were computed by multiplying their annual personnel costs by the percentage of time engaged in OSH activities. For a clerk whose annual personnel costs were 5 million Japanese Yen (JPY) and whose rate of engagement in OSH activities was 20%, the personnel costs were 1 million JPY (multiply 5 million JPY by 0.20), as shown in Fig. 2.

The section for the cost of each activity contains expenses, outsourcing costs, investments, depreciation and personnel costs for non-OSH staff (Fig. 1). To calculate the personnel costs for non-OSH staff, we required information on the average personnel costs per person per hour, activity time (hours), number of people involved and number of times each activity was performed in a year. In the case of the general health checkup, given that the average personnel costs per employee per hour was 4,200 JPY, the mean examination time was 1 hour, there were 1,000 examinees, and the activity was performed once a year, the personnel costs of the activity were 4.2 million JPY (4,200 JPY × 1 hour × 1,000 people × 1 time), as shown in Fig. 1.

The activity time (hour) needs to be identified to calculate the personnel costs. In the case of the health checkup above, the mean examination time was 1 hour per person, and the time was approximately the same among examinees. However, the time required for some activities differed for different employees. We conducted an interview in workplace A and determined times required for two managers and two rank-and-file employees to conduct OSH activities (OSH management work, risk assessment and a health meeting) (Table 3). The times required were different from person to person. In such cases, we recommend holding interviews with some employees about the time required for each activity and calculating the average time.

Cost estimation of occupational safety and health activities

We calculated all OSH costs using the tool in three workplaces, Z, A and B. Through this process, we observed difficulties in cost estimation of three items: the depreciation for investments in equipment incurred before the current costing year, the costs of fail-safe devices already installed in manufacturing facilities and the personnel costs of line managers for coaching of subordinates in terms of OSH (Table 3). Except for these three items, no issues arose in calculating the costs of OSH.

Cost estimation of occupational health services

We constructed the cost estimation tool for OH services by removing the safety-only items from the cost estimation tool for OSH. Items classified by safety and health are listed in Table 2. When calculating the costs in workplaces A, B, C and D, we only encountered difficulties in assessing the costs of the three items mentioned above: depreciation, costs of fail-safe devices and the personnel costs of line managers when coaching.

Validation of the tools

We interviewed the OSH staffs about the presence or absence of any possible leaked information about the cost estimation tools, and all of them answered that there was no leaked information in the tools.

The cost estimation tools for OSH activities and OH services can be downloaded freely from http://ohtc.med.uoeh-u.ac.jp/healthaccounting/tool/index.html.

Discussion

In this study, we developed cost estimation tools for OSH activities and OH services from a corporate perspective. With these tools, it is possible to clarify the entire OSH and OH costs in a standardized way.

The cost estimation tools are compatible with business accounting standards. We calculated the OSH costs from a corporate perspective. We listed account titles in detail and defined overhead cost allocation rules. In this study, we calculated OSH costs by referring to the accounting information in cooperation with financial department staff. This made it possible to calculate real OSH costs.

OSH costs, from a corporate perspective, should be contained in the personnel costs of non-OSH staff. This means that, from the data for OSH costs, employers can evaluate not only OSH activities conducted by OSH staff but also company-wide OSH activities conducted by all employees. Using this tool, we can manage OSH systematically in a manner consistent with corporate management. In addition to this, the tool needs to meet the following two requirements. First, OSH practitioners must conduct the cost estimation from the employers' perspective so that employers (decision makers) can understand and accept the results within the scope of their own management field. Second, employers need to be able to compare results with other management indices and use results as management indicators.

We can analyze the OSH cost estimation data in a number of ways. We can understand the breakdown of expenses, outsourcing costs and investments allocated to the respective OSH activities. We can compare the three costs and evaluate the balance for each activity. By reference to budget documents and financial statements, we can calculate the rate of each cost of OSH among total costs in the workplace. We can also calculate the breakdown of personnel costs for OSH staff and non-OSH staff. Moreover, we can calculate the proportion of total OSH costs in net personnel costs of the company. OSH costs are thought of as human resource investments in terms of preventing accidents and promoting employee health, and we thus believe that OSH costs have value as an indicator of human resource investment. If we can measure productivity, it will be a challenge in the OSH field to reveal the relationship between OSH costs per employee and work productivity.

In this study, we actually calculated OSH costs for eight companies and OH costs for nine companies. Two occupational physicians interviewed in this study were responsible for the administration of the occupational health department budgets of their businesses. They held a similar view: “This is the first time that we can capture the entire picture of the occupational health costs including out-of-sight costs. The out-of-sight costs are the personnel costs when employees (non-OSH staff) conduct OSH activities and receive OSH services. With this tool, we can grasp the workers' behavior in the OSH activities.” An account manager interviewed said: “To create financial statements and manage the problem in terms of tax reporting, we enter details in a book daily. We assess profit-and-loss accounts and cash flow. However, this is the first time that we have seen data on OSH, as usually the costs of OSH are buried in a large volume of accounting data.”

Use scenarios for the cost estimation tools

We present three use scenarios for the tools. One is cost management of outsourcing. We can compare insourcing costs of OSH with outsourcing costs. Employers can make decisions according to the comparison and appropriate cost management. Occupational safety activities are often conducted by in-house staff. OH services are sometimes outsourced, similar in ways to the implementation of employee-assistant programs. Therefore, comparisons of outsourcing and insourcing costs are needed. Cost analysis requires a job analysis of OSH activities, and the costs need to contain the opportunity costs of non-OSH staff. The cost estimation tools can meet these requirements in a standardized manner. In a competitive business environment, cost management is requisite, and the demand will be higher in the future.

The second scenario is accountability to multiple stakeholders such as customers, employees, stock holders, and the local community. OSH is widely recognized as being part of corporate social responsibility (CSR) and is written in the labor practices of ISO 26000: 2010 under health and safety at work. In addition, ISO 26000 indicates that the financial and social costs to society of work-related illness, injuries and death are high¹⁸⁾. Many Japanese companies listed on the Tokyo Stock Exchange First Section publish CSR reports each year, and they describe OSH activities in their reports¹⁹⁾. Some companies have described OSH costs in the report contents²⁰⁾. Using CSR reports, employers can explain their OSH activities to multiple stakeholders. Multiple stakeholders, especially stock holders, can use the information to make decisions about equity investment.

The third scenario is the provision of a standardized format in economic evaluation. Cost estimation is imperative for economic evaluation studies. The OSH cost estimation tool provides the real OSH costs. Above all, this tool provides a detailed breakdown of OSH costs, allowing comparison between the results of economic evaluations.

Limitations

There are several limitations to these findings. First, we may not be able to completely calculate the depreciation for investments in equipment incurred before the current costing year with our cost estimation tools based on activity-based costing. The OSH costs will be underestimated, but the underestimation will have a relatively small effect because these investments are few except in manufacturing. Second, we developed the OSH cost estimation tools for large-scale enterprises. Further OSH cost estimation is needed for small- or medium-scale enterprises to confirm the availability of this tool. In this study we used the tool in three medium-scale enterprises and confirmed the availability. Third, we developed the OSH cost estimation tools in Japan, and the activity items in them are compliant with actual activities, laws and regulations in Japan. If these OSH cost estimation tools are to be used in other countries, it would be better to add items for activities unique to those countries. This would hopefully enable comparison of OSH costs in various countries.

In conclusion, we developed cost estimation tools for OSH activities and OH services from a corporate perspective in Japanese companies. These tools can be used to standardize reporting of information on the costs associated with OSH and thus provide employers and researchers alike with relevant, accurate information so that they can make informed decisions.

Acknowledgments: The authors express their sincere appreciation to the companies that participated in this study. The authors would also like to thank Mr. Haruo Hashimoto (industrial hygienist), Mr. Takuro Shoji (safety specialist) and Mr. Osamu Sonoda (certified public accountant). This research was funded by Grants-in-Aid from the Ministry of Health, Labour and Welfare of Japan (H23-Roudou-Wakate-006, Tomohisa Nagata as a representative researcher). The authors declare no conflicting interests.

References

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