Workplace injuries, illnesses and fatalities not only cause untold pain and suffering to employees and their families, but also cost organizations billions of dollars in wasteful and often preventable expenses. According to the U.S. Department of Labor, businesses spend $170 billion a year on costs associated with occupational injuries and illnesses.
Many direct costs can be easily identified, including workers’ compensation payouts, insurance premium increases, medical expenses, emergency response fees, accident investigations and implementation of corrective actions, OSHA penalties, civil liability or litigation costs and property losses. However, indirect costs, such as workplace disruptions, loss of skilled workers, reduced productivity, worker replacement, retraining, lower morale and additional administrative work, can often be higher than direct costs.
The implementation of workplace safety and health management programs has been shown to significantly reduce the incidence of accidents, injuries and fatalities by ensuring that hazards are eliminated or controlled in a systematic manner. Organizations that have established safety and health programs report not only significant decreases in workplace incidents, but also many additional benefits that more than cover the cost of the programs, including:
- Significant improvements to their organization’s productivity and financial performance.
- Reduced direct costs associated with workplace illness, injuries and fatalities, such as workers’ compensation payments and premiums, medical expenses, OSHA penalties and implementation of corrective actions, litigation costs and property losses.
- Lower indirect costs resulting from injuries, such as loss of skilled workers, training and compensation for replacement workers, workplace disruptions and schedule delays, lower productivity and morale and additional administrative time.
- Improved teamwork and efficiency through safety training that encourages workers to look out for each other and cooperate to get the job done.
Studies have shown that for every dollar invested in safety and health, employers can expect up to six times return on their investment. Creating a culture of safety that promotes employee health and risk reduction, along with supportive leadership and strong safety policies, can produce a substantial decrease in costs over time. Establishing safety and health programs to prevent injuries and illnesses is not only the profitable thing to do; it’s the right thing to do. Safety and health management planning is good for business and good for workers.