Brain Based Safety

How much does safety cost?

Numerous scientific studies have been published exploring the relationship between safety and profitability in the construction sector. These studies focus on the correlation among three types of costs: obligatory (resulting from legal requirements), preventive (such as training), and curative (arising from damage, claims, illness). In various projects, these costs have been calculated as a percentage of construction costs and then compared. The findings indicate that there is an optimal level of investment!

Companies that invest as little as possible in safety are relatively often faced with incidents, sickness, and necessary repairs before delivery. A low safety budget leads to more so-called failure costs, which exceed the savings. In other words, cutting costs upfront leads to higher costs afterward. Conversely, companies that invest heavily in safety gain better control and consistency in their processes, but these investments do not fully pay themselves back through reduced failure costs. Both trends seem logical. The critical question is: is there an optimal point of investment? It turns out there is. The graph below illustrates the relationship between the types of costs. The optimal point turns out to be 1.05% of the construction costs.


The researchers indicate that this optimal point has been calculated for projects with an average level of risk and for companies that already maintain a reasonably safe standard. For extra risky projects, a higher budget is necessary to ensure safety. Companies with a low safety standard would do well to first invest in organizational improvements through management training and guidance.

Juni Daalmans, August 3, 2023 Brain Based Safety


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