UCD expert calls for COVID-19 safety incentives for businesses to help better protect workers

Posted 27 May, 2020

Governments should incentivise companies to invest in COVID-19 safety measures, according to UCD researchers who carried out a study which suggest businesses who prioritise safety are more likely to fail.

The research, carried out by Professor Mark Pagell and Professor Brian Fynes, Mary Parkinson and Michalis Louis of UCD Michael Smurfit Graduate Business School, examined over a 100,000 Oregon-based companies over a 25-year period.

It found that those that provided safer workplaces to staff and customers were more likely to go out of business than those that did not.

“Our research suggests that businesses that enhance their own prospects over worker safety, will be more likely to survive as they will be both minimizing their costs and maximizing their cash-flow,” said Professor Pagell.

“Meanwhile their more cautious competitors will in essence put their own survival at risk by better protecting the rest of us.

“This suggests that government and employer representative bodies need to think about rewarding those businesses that do protect their workers and protect them from being punished financially,” he added.

The study, published earlier this month in the journal Management Science, examined the short and long-term survival of each business.

“We know from our previous research that there are firms who leverage protecting their employees into competitive advantage; creating positive outcomes for the firm, workers and society,” said Professor Pagell.

“Our research, unfortunately, suggests that such behaviour is not the norm and instead that the typical business enhances its own prospects at a cost to workers and society.”

Some business will re-open the second they are allowed after COVID-19 restrictions ease and with the minimal legally mandated protections warned the UCD researcher.

“Others will wait until they are sure they have plans in place to fully protect their workers and customers,” he said.

The study was an international collaboration between the UCD Smurfit School team and Oregon State University, Universitat Ramon Llull and Ohio State’s Fisher College of Business.

By: Staff Writers, UCD University Relations (with materials from Beth Gormley, UCD College of Business)