RAND Study Finds That Small, Single-Location Workplaces Are Among the Safest Places to Work

For Release

May 5, 2006

Small workplaces that are a business' only location are among the safest places to work, according to a RAND Corporation study issued today.

The finding provides an important exception to research that workers in small workplaces are at greater risk of fatal accidents than those in larger workplaces, according to an examination of federal workplace fatality reports from 1992 to 2001.

Researchers found that fatal accidents were most common at small worksites with fewer than 20 workers that were operated by middle-sized businesses – defined as those with 20 to 999 employees. Fatality rates at these worksites were 2 to 5 times higher than similar worksites operated by either small or large businesses.

Researchers say the study's findings are important because businesses with fewer than 100 employees play a vital role in the U.S. economy, employing more than half of all American workers.

The research was funded by the Kauffman Foundation and carried out by the Kauffman-RAND Center for the Study of Small Business and Regulation, which is a part of the RAND Institute for Civil Justice.

The report says that small, single-site businesses may be safer because they could have an owner on the premises who watches over the safety of employees.

“At a small workplace, one person can make more of a difference, and it seems plausible that an on-site owner might feel more responsibility to try to avoid injuring workers than a hired manager would,” said John Mendeloff, the study's lead author and a professor of public policy at the University of Pittsburgh.

RAND researchers identified trends in fatal workplace accidents by analyzing more than 17,000 workplace deaths investigated by the federal Occupational Safety and Health Administration. The analysis did not include deaths from assaults and highway crashes, because they are not usually investigated by OSHA.

Researchers identified trends involving both the size of the individual worksite (number of workers at a single location) and the overall number of workers a business employs at multiple locations.

The study found that the smallest worksites operated by a business with multiple worksites are likely to be the riskiest. For example, among manufacturing businesses with 1,000 or more workers, the fatality rate at worksites with fewer than 20 workers was 3 times higher than worksites with 20 to 49 workers and 8 times higher than locations with 1,000 or more workers.

Similar patterns were seen for businesses with fewer than 1,000 employees and for most other industries including transportation, public utilities, wholesale, and services, according to the study.

Some policymakers have argued that the burden of health, safety and environmental regulations falls too heavily on small businesses, which have less ability to keep up with regulatory requirements and can't take advantage of economies of scale to meet safety standards.

For example, study co-author Christopher Nelson of RAND said that the information provided by a safety professional might have the same cost regardless of whether it goes to 20 workers or to 1,000.

These results suggest that the safety records of single establishment small firms may justify lighter regulatory intervention there. In addition, it might make sense for OSHA to focus more effort at middle-sized firms that have small establishments, because they present by far the highest fatality risks.

Other authors of the study are Kilkon Ko and Amelia Haviland of RAND.

The RAND Institute for Civil Justice helps make the civil justice system more efficient and equitable by supplying government leaders, private decision makers and the public with the results of objective, empirically based, analytic research.

Copies of “Small Businesses and Workplace Fatality Risk: An Exploratory Analysis” (ISBN: 0-8330-3944-X) can be ordered from RAND's Distribution Services (order@rand.org or call toll-free in the United States 1-877-584-8642).

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