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Safety and health in micro and small enterprises

Safety and health in micro and small enterprises
Small and medium-sized enterprises (SMEs) are seen as key drivers for economic growth, innovation, employment and social integration and form the backbone of the EU economy.

In 2013 SMEs accounted for 99.8% of all non-financial EU enterprises.  This equates to 21.6 million EU businesses

SMEs comprise of three categories – micro, small and medium enterprises.  In the Commission Recommendation 2003/361/EC of 6 May 2003 these are defined as follows:

  • A medium enterprise has fewer than 250 employees and an annual turnover less than €50 million and / or their balance sheet total is less than €43 million
  • A small enterprise has fewer than 50 employees and an annual turnover or balance sheet total that does not exceed €10 million
  • A micro enterprise has fewer than 10 employees and an annual turnover or balance sheet total that does not exceed €2 million

On average, SMEs across the EU employed 4.22 people therefore, the overwhelming majority (92.4%) of enterprises in the EU are classed as micro enterprises.  These micro enterprises account for 67.4% of all jobs in Europe, so their importance to the European economy is enormous.

What challenges do Micro and Small enterprises face?

Evidence shows that employees of smaller enterprises are subject to greater risks than the employees of larger ones, and that smaller enterprises have more difficulties in controlling risk.  Various studies, including the EU-OSHA’s own European Survey of Enterprises on New and Emerging Risks (ESENER) survey, show that the challenges in handling OSH are particularly significant as the enterprises gets smaller. 

Relatively poor OSH management can be attributed to specific characteristics typical of small businesses such as structural and organisational features of work and employment, economic position and business relations, business diversity and flexibility, remoteness from regulatory reach, attitudes and competencies of the owners and workers in such small establishments or their short life cycle.  These characteristics makes it more difficult for Micro and Small Enterprises to create and maintain a safe and healthy work environment. 

Some other factors that have an impact in the management of OSH in these establishments when compared to larger ones include:

  • Difficulties in regulating, since they are typically heterogeneous, geographically scattered, and lack cohesive representation. Budgetary constraints meaning there is often lack of resources to implement safety and health initiatives and interventions such as paying for health and safety advice, information, tools and controls.
  • Having less resources prevents the implementation of prevention activities.
  • Less time and energy is available for ‘non-core’ tasks, which safety and health management is sometimes perceived to be.  Good OSH is not seen as a priority.
  • Risk assessments can be costly and confusing to complete, particularly if a business lacks the resources or the OSH know-how to do so effectively.
  • Reaching Micro and Small Enterprises directly can be difficult for organisations promoting or enforcing good safety and health in the workplace.

To learn about the factors that motivate smaller establishments to invest in OSH read the following OSHWiki article.  

Good safety and health is good news for MSEs

Less than one-half of micro and small start-ups survive for more than 5 years, and only a fraction develop into the core group of high-performance firms that drive industrial innovation and performance.  One study found that among new micro and small U.S. businesses, those that failed within one or two years had an average workplace injury rate that was more than twice the rate of those that survived for more than five years. 

The costs of accidents are of particular concern to smaller sized enterprises because they account for 82% of all occupational injuries and 90% of all fatal accidents

The impact of a serious OSH incident could be catastrophic for a small enterprise:

  • It is far more difficult for micro and small enterprises to recover from any OSH incident.
  • The relative impact is greater than on comparable large larger enterprises
  • Key workers cannot be easily or quickly replaced
  • Short-term interruptions of business can lead to loss of clients and important contracts.
  • A serious incident can lead to closure of a business due to the direct costs of dealing with the incident or the loss of contracts and/or customers.
  • Even small incidents and cases of ill health can double the level of sickness absence.

Statistics like these demonstrate that good OSH is fundamental for the success and long term survival of these Micro and Small Enterprises.  EU-OSHA’s ESENER survey provided evidence that even very small enterprises can report high levels of OSH management practices in some EU countries and sectors. This suggests that, if an encouraging environment can be created, OSH management in Micro and Small Enterprises could be substantially improved. 

Effective OSH management is not only essential for improving the well-being of workers, but it also ensures that enterprises and economies thrive in the long term by minimising production losses resulting from injuries or diseases.

Read EU-OSHA’s report Occupational Safety and Health and economic performance in small and medium enterprises: a review

EU-OSHA helping micro and small enterprises to assess their workplace risks

Proper risk assessment is the key to healthy workplaces. Yet carrying out risk assessments can be quite challenging, particularly for micro and small enterprises which may lack the resources or the occupational safety and health know-how to do so effectively.

The EU-OSHA Online interactive Risk Assessment tool (OiRA) aims to overcome this, as the first initiative at EU level to encourage European micro and small-sized enterprises (mainly via Member States and social partners at EU and at Member State level) to assess their risks.

The OiRA platform allows to build easy-to-use and cost-free online tools that can help micro and small organisations to put in place a step-by-step risk assessment process – starting with the identification and evaluation of workplace risks, through to the decision making and implementation of preventative actions, to monitoring and reporting.  The tool is used by Sectoral Social Partners (employers' and employees' organisations) and National authorities (Ministries, Labour Inspectorates, OSH institutes, etc.) to produce sector-specific risk assessment tools targeting small businesses.

More information on OiRA can be found at the project website and the related OSHWiki article.

Gaining a deeper insight

Given the importance of OSH in Micro and Small Enterprises, EU-OSHA have started a large scale project (to run from 2014 to 2017) on “Improving Occupational Safety and Health (OSH) in Micro and Small Enterprises in Europe”. 

The aim of this OSH overview on Micro and Small Enterprises is to collect, analyse and disseminate current and new comprehensive knowledge and understanding on: policies and strategies, tools and resources, and work places views and practices with regards to OSH management in Micro and Small Enterprises. It will include theoretically informed, policy orientated, empirical research that will integrate elements of desk and field analysis by using qualitative and quantitative research methodologies, instruments and analytical techniques.

This EU-OSHA project will seek to identify what Micro and Small Enterprises currently do with regards to OSH management of their workers, what prevents them from taking OSH into consideration, and what would encourage them to improve OSH conditions within their working environment.  A literature review combined with the analysis of quantitative data from EU-OSHA’s ESENER-2 will help us understand the current state of OSH in these smaller establishments. The activity will then build on existing work, and with the input from stakeholder workshops, interviews and questionnaires, assist in the implementation of recommendations, the exchange of best practices and the further investigation of ways of improving OSH in these establishments – particularly understanding how Micro and Small Enterprises can be motivated and encouraged to improve working conditions and thus reduce work related accidents and occupational diseases.    

By using comparative analysis between countries, sectors, size classes etc. – this project will assist European and national policy makers by helping them understand “what works” and “why it works” in the development and deployment of strategies and resources to improve OSH outcomes in these enterprises.

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