The Value of Safety Training for Business-to-Business Firms

Abstract

Business-to-business suppliers invest in safety training programs believing that such programs mitigate safety hazards, prevent workplace injuries, and create value for their customers. However, causal evidence of these effects is sparse. Study 1 uses site-level monthly data from a global oil field services company. Exploiting sharp discontinuities in safety training hours due to catastrophic accidents, the authors find that a 10% increase in safety training hours per capita decreases safety hazards per capita by 6.45%–9.57%. Study 2 measures the causal impact of business establishments’ safety training intensity on their workplace injuries: it leverages Local Law 196 requiring workers at construction establishments in New York City to complete at least ten hours of safety training. This legislation reduced injury rates at construction establishments in New York City by .54–.68 percentage points (a 15.56%–18.84% decrease) relative to their counterparts. Study 3, a stated-choice conjoint experiment of business-to-business procurement professionals, documents that the focal supplier's investment in safety training increases the probability of its proposal being selected by those professionals. Collectively, these findings validate the need for suppliers to invest in safety training as a risk-mitigation vehicle that has positive implications for business-to-business buying decisions.