- Small and medium-sized enterprises (SMEs)
- Strengths and weaknesses of micro and small enterprises
- The OSH performance of small and micro enterprises
- The consequences for OSH management
- Three main strategies for OSH management
- The importance of supportive structures
- Further reading
Small and medium-sized enterprises (SMEs) are widely acknowledged as the backbone of the European economy. According to EUROSTAT statistics , , 29.6% of the EU employees work in micro enterprises (<10 employees), while 20.6 % are employed in small firms (<50 employees). Indeed, half of the European workforce is working in small and micro enterprises (with great variations between sectors). It is therefore very important that small and micro enterprises manage occupational safety and health (OSH) adequately. This implies serious challenges.
In this paper the characteristics of OSH Management in small and micro enterprises is central to the discussion. Attention is paid to the specific characteristics of small and micro enterprises, as they cut across sector and industry; the OSH performance for this broad group of firms; the consequences for OSH management strategies; and the importance and possibilities of OSH supporting structures.
Small and medium-sized enterprises (SMEs) provide employment to a majority of the workforce. They are also regarded as the ‘motor’ of the economy and as indispensable for innovation and the development of the knowledge economy. Small and micro organisations have, however, other characteristics (i.e. strengths and weaknesses) than larger organisations (which are often regarded implicitly as the standard, both in policy making and in research). Unfortunately, the models developed for larger corporations have proved to be ineffective for most SMEs
In fact there are two very different ways in which small enterprises are perceived: as strong, innovative and a major economic force, or as organisations that struggle for survival, focus on short-term issues only, and lack resources and knowledge (especially for tackling long-term issues like occupational safety and health). Both views are based on evidence (e.g. , ). This ambiguity towards SMEs may stem from the fact that SMEs form a very diverse group. Thinking about SMEs is all too often based on generalisations. Due to the enormous diversity in small companies, there are a variety of challenges, requiring a range of potential solutions for OSH management.
The owner-manager of a small company is usually the person who has to take personal responsibility of most management matters, e.g. sales, procurement, accounting, production planning, and personnel – all issues, which are crucial for the survival of the firm. In this context, OSH might seem only a peripheral matter . The personal values and priorities of the owner/founder of the enterprise (which may differ greatly among small companies) are key determinants of the culture, values and social relations in the enterprise, including those relevant for OSH.
The tasks that contribute to the short-term survival of the business are most likely to be given high priority . Small firms are vulnerable financially. This makes OSH investments less attractive, because the short-term financial benefits of prevention are limited [7,8].
Small enterprises give priority to solving acute problems and urgent tasks. As a consequence, safety is usually not a priority, and the same is true for the prevention of chronic health problems. It is known that many owners consider health and safety to be part of the professionalism or craftsmanship of the workers, and therefore primarily the responsibility of the employees themselves. The time available for learning about health and safety is very limited. As a consequence OSH expertise in small enterprises is often very limited or even absent.
A strength of small enterprises is that communication lines are short and personal, and that simple solutions can be implemented at short notice. The owner-managers and the employees often have personal contact on a daily basis. Indeed, the owner-managers offer the employees a close social relationship and often a great range of autonomy.
As a consequence of the specific strengths and weaknesses of small enterprises, OSH management in small companies has specific characteristics. It differs from that of larger enterprises (which is often - implicitly- regarded as the ‘norm’ for good OSH Management.
Small enterprises have an increased risk of accidents compared to large enterprises. In firms with fewer than 50 workers the fatal accident rate is around double that of larger companies . It is most likely that there is also a higher risk of less severe accidents, but the statistical data are not very reliable for this category, probably due to underreporting. Even though the prevalence of occupational accidents is statistically significantly higher in small companies than in others, accidents are a rare experience for individual small firms.
The occupational health performances of small firms are diverse. The owner-entrepreneur usually considers long-term exposure as a hypothetical risk and beyond control. There are clear indications of higher exposures to chemicals. Long-term exposure is only considered relevant if individual employees experience health-related problems such as low-back pain or headaches from toxins. Then the owner-managers express willingness to adjust the workplace in order to avoid aggravation . Noise, is widely accepted as a relevant issue in small firms; probably because chronic exposure is a constant nuisance to all. Even so, noise at the workplace is usually reduced to a question of wearing hearing protection .
Perhaps surprisingly, the exposure to psychosocial risks seems lower in small enterprises (10). This might be the result of the relatively large autonomy for the workers, and greater variation in tasks due to a less strict division of labour. This also implies shorter exposure times to other health risk (compared to those working in larger organisations), which reduces such risks. Owner-managers see the psychosocial working environment mainly as a matter of having a friendly atmosphere, which they consider important for daily operations. They see it as important that people speak respectful and friendly to each other, and cooperate well . Generally, small enterprises do not systematically identify risks and take preventive action accordingly. This is especially relevant for long-term risks that are not tangible, like chemical exposure, or safety risks. For several reasons, OSH management systems are not very attractive for small firms What are OSH Management Systems.
Social control is tighter than in larger firms. When and individual employee in a small enterprise is not able to work, this significantly affects the work planning and production. The financial consequences for the firms may often change at short notice. Colleagues working in a team should support each other, both for the complementary competencies that may occur and for social reasons. As a result, workers in small firms are likely to experience greater social pressure to keep working when they are not fully fit. An external trend is that large enterprises centralise power but decentralise work (outsourcing, subcontracting, off-shoring). In many cases, this leads to poor working conditions in small enterprises. It seems a trend that large enterprises become ‘leaner and meaner’, which by implication leads to more SMEs. It often also implies that the most dangerous activities are outsourced, thereby pushing the risk down to the small enterprises . As a response, it is now increasingly regarded as a responsibility of larger enterprises to prevent the ‘externalisation of risks’ as part of their corporate social responsibility strategy .
It is important to realise that the motivators to improve OSH are different for small companies compared to larger ones. Especially business related factors are important. SMEs are motivated more by the requirements or through encouragement from their key customers than by the influence of legislation . This is probably because owner-managers perceive that the working environment is an issue in the daily operation of their business . The importance of good leadership in occupational safety and health Factors that motivate SMEs to invest in OSH are :
- Avoiding the costs of ill-health,
- Avoiding the expense of accidents
- Seeing that health and safety is an integral part of being a ‘good business’
- Maintaining their reputation
- Achieving higher productivity - especially by reducing absence
- Keeping within the law, hence avoiding punitive action from government bodies
- Containing insurance costs
- Meeting client demands
- Being a ‘good’ employer.
It is therefore vital to communicate that good health and safety is beneficial (both financially and in terms of well-being). Nevertheless, health and safety investments often face two major obstacles: the cost–benefit ratio is often unclear and difficult to express in real money; and it is often not clear whether interventions will directly improve the performance of the core tasks of the organisation The economic dimension of occupational safety and health management. Consequently, management ignore frequently suggestions for interventions, even when the investment would realise a suitable return .
Other issues than economic drivers are also important, especially the occurrence of a serious accident, or when the manager has experience as a co-workers in the same business . Finally, most of the owners-managers seem motivated to pursue compliance with generally accepted OSH standards for their sector (the good practices in their sector are more tangible than the more abstract legislative requirements, and they also contribute to their professionalism).
When searching for successful OSH strategies, it is important to consider not only the quality of the strategy in itself, but also how likely it is to succeed in implementation in small organisations. A good strategy that is not implemented is not useful .
The ESENER report  showed that ‘having a formal OSH policy ‘ appears to be less frequent among smaller enterprise. Enterprises that do not have an OSH policy cite that they lack the expertise. Or that it is not necessary (due to absence of relevant OSH risks). The latter may reflect either the real absence of risks or lower levels of risk awareness in SMEs .
There are three main strategies for OSH management in small and micro firms: to develop risk management, to comply with professional standards, and to outsource OSH.
The risk management strategy
Risk management, when performed well, engages the employer and the employees in reducing risks and improving OSH. The approach is generic and can be used in all companies regardless of sector or type of risks. Risk management also implies the opportunity to prioritise between different hazardous operations, which can help to make OSH management cost-effective. It is therefore quite obvious why the EU legislation takes risk management as its starting point for legislation .
However in small firms risk management can only be successfully implemented (as a semi-continuous activity) under certain conditions: e.g. relevant easy to use information, practical tools and competency should be available. Examples of good practices are needed as solutions for the OSH problems identified. Economic incentives play a role in the implementation. External support might be needed to capture the knowledge that is needed in the enterprise, but that is not readily available.
More than 80% of small establishments (between 10-20 employees) in the EU-27 reported that they carry out checks as part of a formal or informal; i.e. risk assessment . This percentage seems rather high, and might be biased as a socially desirable response. In the 12% of establishments not carrying out regular health and safety checks, the most frequently cited reason (71%) is that they are ‘not necessary because we do not have major problems’ . As this reason is most common among the smallest establishments, it raises the question of whether smaller enterprises are less likely to have major problems or whether they are less aware of OSH issues. The ESENER project did not address micro firms, but it can be expected from research in several countries that in micro enterprises the risk management approach is less often followed.
Indeed, from the perspective of micro and small enterprises, the risk management strategy has several disadvantages. Risk management is relatively time consuming. In small companies time consuming activities are deprioritised unless they are perceived as important for the survival of the company. The knowledge needed for good quality risk management is often not available in small companies. Poor risk management may result in a false sense of safety .
Compliance with professional standards
The second strategy is to comply with professional standards. Good OSH is therefore considered to be part of the craftsmanship or professionalism of the enterprise and its workers. If so, OSH can be managed as a natural part of daily work and professionalism. This implies an orientation on identification and following ’the state of the art’, or good practices.
Again, a problem can be that there is not sufficient time available to identify professional standards or good practices. However, this is more closely related to the core activities of the enterprise than risk management.
In debates on the reduction of the administrative burden of legislation, representatives of the small companies often say: ‘Just tell us what to do, and we will do it.’ This means that they would like to get detailed demands for specific control measures. They do not mean that they want to be told to identify and assess the risks, which by themselves do not provide a solution .
On the other hand, even if good practice is easily available, small companies seldom use this advice, but rather turn to personal contacts for advice instead.
As small enterprises are busy with their core business and have little time for OSH, it is understandable that the third strategy is outsourcing OSH. Across the EU, 36% of establishments – particularly the smaller ones – outsource risk assessments to external providers (often to occupational health and safety services) . Occupational safety and health risk assessment methodologies and occupational health and safety services. However, between individual countries the figure varies widely, e.g. in Denmark, outsourcing is the exception even among the smallest establishments surveyed. It is important to note, however, that the basic legal responsibilities of the employer and the individual workers can never be outsourced completely.
Due to the scarcity of time and knowledge in small enterprises, supportive structures have an important role to play. The functioning of supportive structures can be regarded from two perspectives: the providers of the support (supply side) and the users of the support (demand side) .
For successful OSH management, the demand side should lead, as otherwise there is a good chance the advice will not be followed-up by implementation. Indeed, regulation, control and campaigns aimed at improving OSH in small firms had only limited effect [10,21].
From the perspective of the small and micro companies there are three ways to deal with supportive structures, which mirror the three main strategies of OSH Management in small companies.
Companies that follow the risk management strategy, will often chose to do OSH management themselves, thereby making use of the support available, where it meets the demands of the company . Business to business requirements can be an important incentive for this group. This is especially as supply chains initiatives and neighbour schemes are important supportive structures for this group. Occupational safety and health in the supply chains
Enterprises that basically follow the strategy to comply with professional standards, need information about such standards and about the state of the art in technology and equipment. Professional standards are often defined and available at a sector level. Sometimes we see here that the supportive structure is (more or less) pushing the companies to implement good practices, often with the aim to upgrade the whole sector (e.g. for labour market reasons). Sector wise support has proven successful in several EU countries. In Germany a lot of support is provided by the Berufsgenossenschaften, while in the Netherlands centrally promoted sector wise ‘OSH Covenants’ (to tackle priority OSH risks) and OSH catalogues (to provide best practices for the sector) were rather successful. At the European level, EU-OSHA’s project to provide interactive digital risk assessment tools per sector is an interesting example (EU-OSHA).
It is also very relevant for small and micro enterprises that OSH is being integrated into curricula of the educational system, especially for vocational training. In this way OSH can become an integral part of the professionalism and the culture of the sector or profession.
Companies that practice the outsourcing strategy see OSH management not as their core business. The company is then depending on the supportive body, usually OSH services Occupational health and safety services. The small companies then want tailor made, adequate, and low budget expert support. For all strategies, it can be said that small companies prefer simple low-cost solutions, disseminated through personal contact .
Besides the ‘supportive structures’ mentioned above, other ‘intermediaries’ could also be relevant. For many owner-entrepreneurs OSH is just one aspect of their business, their profession or craft. This means that they are likely to welcome support via non–OSH experts, that may nevertheless provide OSH support. This implies that insurance companies, labour unions, accountants, public authorities, suppliers of equipment, etc. (see 21 for an overview) could be useful as intermediaries to support small firms in OSH management.
Small and micro enterprises employ more than 50% of the workers within the EU, and so are responsible for more than 50% of the European OSH situation. Good OSH management is a real challenge for this group of firms. There is broad variation in small firms and in their OSH performance. For various reasons supportive structures are indispensable to give OSH management in small firms a boost. There are three main strategies for OSH management in small and micro organisations: to develop risk management, to comply with professional standards, and outsourcing OSH. These require different forms of external support.
Due to the enormous diversity of small firms, there is a need for a broad range of supportive activities, ranging from adequate and practical information and training to personal advise, covering all relevant OSH risks. The success of the supportive structure depends for a great deal on a good ‘match’ between the support supplied and the variety of needs on small firms, whereby the demand side should be leading. This forms a challenge for OSH experts and policy makers, as up till now, the thinking about OSH management is determined by the experiences with and in large enterprises.
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