New laws create the need for new solutions. New solutions mean growing niches. Here’s one you might not have considered allocating your investment portfolio funds to: Occupational Health and Safety (OHS). In fact, the Australian OHS industry is set to grow to $1.6 billion in 2021, with a predicted annual growth of 8%.
New laws coming into effect in the state of Victoria on 1 July 2021 will hold businesses criminally responsible for accidental deaths in the workplace, under a new offence termed ‘workplace manslaughter’. Negligence or breach of OHS standards will result in a criminal conviction and a jail sentence, should they result in loss of life.
It’s a grim subject to contend with. In 2020, 175 lives were lost in workplace fatalities in Australia. In the sombre words of WorkSpace’s Chief Executive Colin Radford, ‘a single workplace death is one too many’.
But it’s a major positive that action is being taken. OHS solutions will play a desperately needed role in getting fatality numbers down for good. Lives will be saved. And companies offering OHS solutions can expect a bright future.
What are the leading OHS companies?
One such company is CodeSafe. Currently raising capital via crowd-sourced funding (CSF), their 3 service offerings have been specifically designed to address the specific failings leading to accidents. The app-based platform provides an ‘all-in-one solution for integrating workplace learning into day-to-day processes’. High SaaS renewal (or customer stickiness) rates of 71% inform an optimistic picture for CodeSafe’s continued growth, with revenue predicted to increase by 300% in 2021/22. CodeSafe’s impressive client-base includes Multiplex, Citywide, and South East Water.
In 2020, SafetyCulture joined Australia’s unicorn club after securing AUD $60 million in funding, taking its valuation to $1.3 billion. SafetyCulture leaves no room for doubt there’s astronomical success to be had in the OHS sector. Business boomed throughout the onset of COVID-19, when safety measures and incident reporting became even more crucial.
Health and safety isn’t just training and checklists. It can be cool too. Tended’s wearable tech can detect if workers have been in an accident, send alerts calling emergency services, and even alert workers when they breach social distancing. The UK-based founder Leo Scott Smith bootstrapped his initial development phase. In 2019, Tended raised £1.15 million from Blackfinch Ventures and Innovate UK.
Should I invest in OHS?
OHS-related companies are responding to a clearly identified problem. There’s no uncertainty over how needed these services are. Between 2019-2020, work-related injury fatalities have increased by 20%, and work-related injuries by 7%. Costs of compensation claims have been estimated to add up to over AUD $1.1 billion annually. This gives OHS companies a clear scope, allowing them to address the problem exactly and effectively.
High-profile law reform often signals a change in attitudes. There is likely to be an element of keeping up appearances. Renewed focus on worker safety will mean workplaces where risk to life is very low will want to be seen to comply with new legislation. This translates to a much broader potential customer base than just industrial and agricultural businesses.
Activism surrounding workplace wellbeing is on the up. Catalysts for this sentiment are many and varied. We can look at worker mistreatment at stock market monoliths like Amazon and Tesla, and the outcry against astronomical profit made on the backs of minimum wage workers. Keener post-pandemic awareness of physical and mental health is also feeding pro-worker rhetoric. As is becoming the case across all industries, companies that neglect corporate social responsibility principles may be left behind.
OHS investments align well with an ethical or ESG-minded portfolio. Improved worker safety doesn’t just prevent injury and fatality. It promotes workers’ rights, saves companies money, and can even result in increased productivity and employee morale.