ECONOMIC BENEFITS AND RETURNS OF SAFETY MANAGEMENT SYSTEM (SMS) IN CONSTRUCTION PROJECTS: SINGAPORE'S CONTEXT

Abstract

The construction industry has long been perceived to be highly dangerous because of the high incident rate. Safety Management System (SMS) is seen as a tool to enhance construction industry’s safety standard but despite the regulatory enforcement of SMS in Singapore, the improvement in safety standard is still not significant. This can be attributed to a lack of motivation for companies to invest more in safety. In response to the need for motivating investment in SMS to better enhance site safety, this paper examines the economic benefits and returns of SMS which are necessary to prove the value and significance of SMS to construction companies. It investigates how internal factors such as experience level on site and management commitment/support affect the derivation of benefits from SMS as well as project time, cost, quality and safety. The relationship between safety, productivity and ROI is also explored through this research on SMS. Quantitative data were collected through a questionnaire survey and analysed using statistical software. The results show that SMS increases safety and productivity, and the benefits gained from SMS vary positively with management commitment/support and experience level on site. Using the data analysis results, a graphic model describing the relationships between internal factors, SMS benefits, and ROI of SMS is introduced to aid construction companies in realising the value of SMS while a SMS benefits improvement framework and a SMS ROI formula are proposed to enable companies to optimise the benefits and track the ROI of their SMS investments.