Formal and informal systems: benefits and limitations

Some organisations adopt a structured system based on a standard such as ISO 45001:2018 and may seek certification. Others run an informal system built on custom and good practice. Each has strengths and weaknesses.

Benefits of a formal or certified system

A structured system based on a standard such as ISO 45001:2018 can bring real benefits, including:

• a visible demonstration of commitment to safety
• lower administrative costs
• lower insurance and liability costs
• better outcomes for employees and protection of worker health
• stronger management involvement and accountability
• a shift from reactive to proactive working
• better regulatory compliance
• improved employee performance
• lower costs from injuries and illness
• better relations with legal bodies
• more confidence among stakeholders
• better relations with employees
• standing as an industry leader and a benchmark for others
• a higher return on investment
• a stronger reputation among competitors

Limitations of a formal or certified system

• It can concentrate too much on documents if implementation and worker participation are neglected.
• Certification does not guarantee zero accidents.
• Workers who are not involved in safety planning and decisions may not follow or understand complex procedures.
• Certification, audits and administration use resources; their cost depends on the organisation and the scope.
• It depends on management commitment. If management is not serious, the system will not be effective.
• It takes time to maintain the documentation and carry out the audits.
• Implementation needs planning and time, so visible benefits arrive late.
• Frequent audits can disrupt normal operations.
• Competent people or consultants may be needed, which adds cost.
• Contractors and supply chains may not be fully controlled, because they do not always follow the organisation's system.

Benefits of an informal system

• It is flexible and adapts quickly to change in the workplace.
• It may have lower certification and administration costs. Competence, training, proportionate monitoring and applicable legal duties are still necessary.
• Hazards can be dealt with fast, without formal approval.
• It encourages workers to take part and to report incidents and hazards that inspections may miss.
• Adopting safe practices can cut the accident rate noticeably.
• It encourages a proactive approach.
• Simple procedures and rules are easier for workers to follow.
• The emphasis falls on real workplace behaviour rather than paperwork.
• It can be tailored to the culture and environment of the workplace.
• Workers take responsibility for their own safety and that of others.
• It supports continual improvement.

Limitations of an informal system

• It cannot be certified against a standard.
• With no formal external audit, weaknesses can remain unresolved.
• It has little or no recognition in international standards.
• Records may be inconsistent if arrangements are informal, but applicable recording duties still have to be met.
• Workers may receive little or no formal training.
• Performance may be harder to measure if responsibilities, records and useful indicators have not been defined. These can be established without seeking certification.
• Without formal procedures, mistakes and unsafe practices are more common.
• It does not suit large or complex organisations.
• Legal compliance is not guaranteed just because the system exists.
• It offers no detailed monitoring tools.

Summary notes for Element 2 · Cheat sheet · Glossary. A study aid, not published or endorsed by NEBOSH.