The Financial Impact of a Workplace Injury

In my 35+ years of working in the safety industry, I have had one goal each day: Help individuals safely return home to their families. There is no greater benefit of safety than this. This doesn’t mean that it is the only benefit. In fact, safety can have quite the impact on all sides of business, particularly in the finance department.

Here are the two main ways that workplace safety impacts a company’s finances:

Direct Costs

According to OSHA, it is estimated that employers pay an estimated $1 billion PER WEEK in direct costs resulting from workplace illness or injury. This total is made up of the medical costs of an accident, compensation payments for the injured worker, and any legal expenses. If more injuries are prevented, the price of direct costs will drop.

Indirect Costs

This is where a company can really feel the financial impact of a workplace injury. Adding onto the nearly guaranteed direct costs, indirect costs can turn into a slippery slope of expenses. To simplify, indirect costs include everything that comes after the medical, legal, and compensation expenses. As detailed on OSHA’s website, indirect costs include “ training replacement employees, accident investigation and implementation of corrective measures, lost productivity, repairs of damaged equipment and property, and costs associated with lower employee morale and absenteeism.” The danger of indirect costs is they are incredibly difficult to fully analyze and track, making them potentially more expensive than direct costs.

What can you do?

The easiest way to save money through safety is to create a safer workplace. I know how obvious that may sound, so here are a couple of ideas/resources to kick-start the changes:

1. Train your staff on why they should be safe.
2. Share safety advice every single day.
3. Utilize all available resources.
4. Perform Mock OSHA audits.

The list of suggestions and resources for creating a safer workplace is practically endless but, like any other goal, a commitment must be made by everyone involved to reach it.

FDRsafety provides full service safety staffing, expert witness, and safety training  for a wide variety of industries and workplaces. Our industry leading placement service will quickly and seamlessly fill your need for an on-site safety professional. For a FREE consultation, please contact Flavius Brown, Vice President at FDRsafety.