Impact of a slower economy on workplace safety programs

During economic downturns, businesses face many difficult decisions to save money, such as lowering operational expenses. Unfortunately, companies usually cut workplace safety budgets or reduce investment in new safety technology or equipment. In addition, employee layoffs could lead to a decreased emphasis on safety procedures or training. (Credit: rathchapon/Adobe Stock)

An economic recession is a widespread and prolonged downturn in economic activity. Economists use many factors to define when a country’s economy is in a recession, including two consecutive quarters of a negative GDP, industrial production and nonfarm payrolls. Even with more robust than predicted economic indicators in the U.S. at the end of 2022, the large amount of layoffs in the tech sector has increased fears of an economic slowdown.

During a recession, companies could implement budget cuts that reduce their emphasis on workplace safety programs, potentially leading to increased worksite injuries. Workplace incidents and illnesses reduce productivity and employee morale, resulting in increased absences that could ultimately lead to lower profits. Employers that enforce safety procedures and regulations and provide safety training, education, and occupational health programs create a workplace environment in which employees feel safe and promote an environment of employee loyalty.