Companies that cut corners of employees can save money in the short term, but risk much higher costs of disasters, both human and financial | Photocredit: Mohd Arif
In the past few weeks we have witnessed fatal disasters that emphasize the flagrant safety -falling. The Air India Dreamliner -Crash and the collapse of the Chennai Metro Rail girder emphasize a critical issue: a systemic erosion of industrial safety standards and a decreasing “safety factor”. In just the first half of 2025, India witnessed a series of fatal industrial accidents: a fireworks warehouse explosion in Gujarat, a fire accident in a cracker factory in Andhra Pradesh, an explosion in a regulation in Nagpur and a chemical factory explosion, Om.
These are some of the prominent in large production setups reported in the press, while there will be many more in the hinterland that are not reported. According to Industriall, who represents employees in a wide range of sectors, more than 400 employees lost their lives alone in 2024 in 2024 in 2024. According to the Directorate General of Factory Advice Service and Labor Institutes (DGFASLI), an average of three people who work in factories, the serious incidents died between 2012 and 2022ing. Erode and Supervisors erode, and the fact that proactive safety must be a fundamental industrial improvement. Organizations must leave a culture of learning only through tragedy and concentrate on systemic resilience.
In recent years, the government has urged various initiatives, such as the make in India Program and Production Linked Incentive (PLI) schedules, promotion and development of industrial corridors to withdraw investments in the production sector. Although these initiatives contribute to the larger development story, safety is becoming the utmost importance. On the other hand, driven by intense competition, companies often give priority to efficiency over protective measures, making them work with razor-thin safety margins.
Dilution in the safety of employees
Experts warn that cost -saving has reduced the traditional ‘safety factor’ in design and activities. In some cases, regulations can also enable companies to spend safety themselves and to prohibit surprise inspections, giving the convenience of doing business effective priority to rigorous supervision. Apparently accidents that occur as a result of negligence of safety rules are routine.
Academic research and anecdotal evidence have clearly shown that companies that cut corners to employees of employees can save money in the short term, but risk much higher costs of disasters, both human and financially. Investing in the health and safety of employees is a strategic business decision. A strong safety culture not only keeps the risks when checking, it also improves productivity, moral and performance of employees. It keeps credibility, attracts customers and secures the trust of investors, with favorable ESG (environment, social, administration) assessments that strengthen the brand value.
Safety and security of employees is part of the ESG ratings of companies, with a majority of the ESG frames Occupational Health and Safety Recording in the ‘social’ category. With millions of dollars of funds that stream based on impact investment models, poor safety performance can lead to lower ESG scores, leading to permanent reputation damage. In India, SEBI-driven company responsibility and Sustainability Reporting (BRSR) also requires top–granted companies to disclose information regarding incident data in the workplace, so that safety is further linked to the value of the shareholders. ESG ratings therefore offer an impactful, market-driven mechanism to stimulate safety improvements, especially when direct regulatory monitoring and enforcement are not consistent.
In an emerging economy, systems and market conditions can push the boundaries of organizations to achieve the best performance with Breakneck speeds and at low costs. But the costs of growth should not be paid in people’s lives. The recent tragedies are a grim memory that technical margins and goodwill from companies are not infinite. Only a persistent, system-wide focus on health and safety at work, well integrated with ESG accounts, can prevent the following disaster and keep the industry really sustainable.
The writer is Faculty – Operations Management and Decision Sciences Area, IIM Tiruchirappalli
Published on July 5, 2025
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