Cost-Benefit Analysis for Accident Prevention in Construction Projects

Abstract

Construction is the most dangerous land-based work sector in Europe and the United States The cost of accidents has received much attention in the recent past, and online interactive tools were developed to assess the cost of accidents to organizations. Online tools and other sources of information on costs of accidents in the construction industry were a useful development but failed to support the decision-making process in regard to construction health and safety measures. A cost-benefit analysis (CBA) methodology is presented that would enable contractors to assess the true cost of accidents prevention and the associated benefits of accident prevention as part of pre- and postcontract project evaluation. The research investigated the cost and benefit of accident prevention, with a view to drawing attention to the economic consequences of effective/ineffective management of health and safety by contractors. A quantitative research methodology was employed in investigating these costs and benefits within the UK construction industry. The results of ratio analyses indicate that the benefits of accident prevention far outweigh the costs of accident prevention by a ratio of approximately 3∶1. Further, the results demonstrate that for every £1 spent on accident prevention, contractors gained £3 as benefits. The results also show that small contractors spend relatively higher proportions of their turnover on accident prevention than medium- and large-sized contractors and that small- and medium-sized contractors gain relatively higher proportions of their turnover, in total, as benefits of accident prevention than large contractors. It is concluded that the CBA method can provide a guide to contractor’s decision making in regard to accident prevention. When acted upon, the method has the potential to contribute to a reduction in costs, deaths, and injuries in the UK construction industry and possibly in other areas internationally.