Saving money by spending on environment health and safety – Injury Costs – Part 3 of a 3 part series.

Workplace injuries and environmental incidents cost time, money, damage reputation, and they change peoples lives.

Some interesting stats include:

  • The real cost of a workplace accident is at least 5 times what you think it is. (Safework Australia).
  • It is estimated that for every $1 spent in direct costs associated with workplace injury and disease, there are another $5 to $7 dollars in indirect costs. This is often referred to as the Iceberg Effect (the initial cost of the injury is only the tip of the iceberg).
  • The National Safety Council reports that in 2017 in Australia there was 104,000,000 lost work days due to workplace injury.
  • The indirect costs of an workplace incident include:-
      • Time lost from work by injured employee(s);
      • Loss of efficiency due to the break-up of a crew;
      • Cost of training a new worker;
      • Damage to vehicles, tools, equipment or other property and the time spent cleaning up, repairing or replacing that equipment;
      • Loss of equipment if impounded by regulators;
      • Loss of production stemming from worker distraction and lower morale;
      • Loss of skill/efficiency slowing production;
      • Accident investigation;
      • Paperwork and additional administrative time;
      • Implementing corrective actions;
      • Fines and penalties;
      • Legal costs;
      • Time spent managing consumer reaction/public relations;
      • Damage to client goodwill and reputation;
      • Rising insurances;
  • Lost productivity following an EHS incident has an immediate negative impact on the business and may take various forms:-
      • Productivity of the worker injured on the day of the accident;
      • Productivity of the other employees who came to the assistance of the injured worker;
      • Reduced productivity due to property damage;
      • Productivity of the worker absent from the labour market;
      • Productivity of the injured worker on returning to work (at his usual job);
      • Productivity of the injured worker on temporary assignment;
      • Productivity of the replacement worker impact.
  • Incident costs come directly out of profit. Let’s look at the sales required to cover your workplace incident costs. If you have one incident of a hand injury and the total cost of that injury is $18,271. Let’s say that the profit margin of your business is 5%. The total sales you now need just to cover that one incident is a staggering $365,420!
  • Safework Australia reported the average total costs associated with injuries from slips trips and falls; Hitting objects with part of the body; Being hit by objects; Sound and pressure; Heat, radiation and electricity; Chemicals and other substances; Mental stress was a staggering $116,580 per injury.
  • Fractures, Wounds, lacerations and amputations average cost impacts were $90,150 and $65,400 respectively per case.
  • The report also found the direct cost to the business of even a short work absence as a result of a work injury is $4,180.00.

We hear it all the time from managers who are reluctant to invest in environment, health and safety – “We don’t work in a dangerous environment.”

The epar response to those not investing in EHS is very simple –

“Everyone works in a hazardous environment that is made dangerous by not having a credible EHS program in place.”

Keeping people and the environment safe does not cost too much time and money. In our work, we continually meet individuals who have been injured and the cost of their recovery and lost wages and the impact on them and their families and the business is substantial.  With research showing that over 99% of all workplace accidents are preventable, every manager has a great deal of control over the circumstances around them, their workers, and their workplace.