EMA – Work-related injuries in manufacturing create $1.23 billion economic burden on NZ

The Employers and Manufacturers Association (EMA) has today delivered the Harm Reduction Action Plan for Manufacturing, the Project Whakahaumaru report, highlighting an estimated $1.23 billion burden on the New Zealand economy each year from work-related injuries in the sector.

Manufacturing contributes over 60% of New Zealand’s exports and employs nearly 230,000 people across 23,000 businesses. However, it is the only major industry sector not to show a decline in the incidence of work-related injuries over the last decade.

Project Whakahaumaru (‘to safeguard and protect’) was supported by ACC and brought together 250 representatives from manufacturing and aligned sectors. The report reveals that the costs of annual ACC claims in manufacturing now surpass $165 million per annum, from a base of $91 million in 2015. Each compensation claim today amounts to 25 days off work on average, compared to 20 days off work 10 years ago.

The costs of work-related injuries in manufacturing now amount to 19% of ACC’s total weekly compensation costs, compared to 15% in 2015. Increases in soft tissue injuries, such as strains and sprains from carrying and lifting, are a key reason for the growth in compensation claims.

The EMA initiated the project in March 2024 with support from ACC. The report will inform a long-term approach to improving outcomes from workplace harm in the sector.

John Fraser-Mackenzie, EMA’s Chief Executive, says “Manufacturers play a huge role in the New Zealand economy, employing approximately 10% of the national workforce. It’s crucial we balance economic benefits with worker health, safety and wellbeing.

“By safeguarding and protecting workers, we are directly improving business outcomes for the whole country. It’s vital we deliver an action plan that gets this right and delivers practical support to businesses and workers on the factory floor.”

Renee Graham, ACC’s Head of Injury Prevention, says “Project Whakahaumaru provides an important foundation for improving health and safety outcomes for the sector. Manufacturing is behind other sectors such as construction, farming, forestry, retail and logistics which are already taking coordinated action to reduce harm in their sectors.

“There’s a real opportunity to improve outcomes for workers and businesses in manufacturing. ACC is committed to working with the industry to help prevent harm and help address the rapidly rising costs.”

Wendi Bains, Chief Safety & Sustainability Officer at Fletcher Building, is the Chair of the Project Whakahaumaru Steering Group. She says “The manufacturing sector is full of wonderful businesses that are committed to providing a safe workplace for their people. Despite ongoing efforts, the sector continues to experience a high rate of work-related injuries compared to other industries. The statistics and stories are compelling – we need to do better.

“Improving the health, safety and wellbeing of our workers is critical, and it is imperative that we, as business leaders, take decisive action to ensure the survival and prosperity of our industry. Whakahaumaru has given us a solid plan to start to address this, targeting sector specific issues. However, as we all know, execution is key.”

Project Whakahaumaru reveals that businesses most vulnerable to high numbers of injury claims are small to medium enterprises (6-99 employees), rather than single operators or large companies.

Age groups at both ends of the workforce have higher rates of injuries. Older workers (60+) account for a much higher share of the lifetime costs, while workers under 25 are also at heightened risk.

Ethnic minorities are disproportionately affected, with Māori, other ethnicity and residual category groups showing the highest claims incidence. Pacific peoples experience a noticeably higher rate compared to their European and Asian counterparts.

Key subsectors of manufacturing where the cost of harm is high include food, metal, furniture, wood, machinery and equipment, along with labour supply services.

Manufacturing businesses and leaders cite challenges in addressing the high incidence of work-related injuries in the sector. These include complex regulations, ambiguous rules and a lack of clear guidance. Diverse workforces, both generationally and culturally, can hamper communications and understanding, contributing to lower levels of health and safety prioritisation.

Workers in the manufacturing sector cite a lack of training and production pressures as impediments to improving safety and wellbeing. In addition, insufficient attention to safety by leaders, as well as reactive measures only taken after incidents occur, were also picked up in discovery by Project Whakahaumaru.

The key objective of the action plan is to significantly reduce workplace harm, improve recovery-at-work outcomes and reduce associated costs in the manufacturing sector through evidence-based interventions. These will include advances in technology, workplace design, workforce development, and leadership enhancement.

The action plan recommends establishing a sustainable industry-wide leadership model, to ensure continuous improvement and effective implementation of the plan.

Project Whakahaumauru is the first phase in the development of a comprehensive plan for manufacturing, commissioned by ACC and WorkSafe.

‘Whakahaumaru’ means to safeguard or protect. It refers to the action of making people or places safe and secure by ensuring the absence of danger or risk of harm. It reminds us to always put action to our words in creating safe workplaces within our industry.

The Project Whakahaumaru methodology combined quantitative data analysis, stakeholder consultations, and reviews of best practices from around the world. This included examining ACC and WorkSafe claims data and integrating insights from successful international models.

Approximately 250 stakeholders from the manufacturing sector, including leaders and workers, along with health and safety professionals contributed to the discovery process, taking part in focus groups, one-to-one interviews, co-designed workshops and surveys.