One of the most challenging parts of implementing a safety recognition program is weighing out the cost benefits and expenses. Often safety supervisors find themselves trying to convince upper management the importance of such programs. Company owners and managers want to see solid proof that a program will do more than just affect the company’s culture. You can bet they will ask, “What is the return on investment for safety costs?”
The short answer to the question of what safety costs is always the same, “It depends.” No two companies are alike, nor will they factor in the same safety needs when calculating costs.
You will hear or read a lot about direct and indirect costs associated with workplace accidents. The National Safety Council (NSC) has models that calculate such costs.
The National Safety Council estimates that a fatal injury carries an average cost of $1.42 million.
These direct costs can affect your company’s bottom line. Direct costs include workers’ compensation, medical expenses, civil liability or litigation costs, and property losses.
But, there are other costs that are difficult to measure that may have a fatal impact on the success of your company. We’re talking indirect costs such as lower employee morale and absenteeism. For every dollar in direct costs, indirect costs could be as much as $2.12, according to NSC. Indirect costs include workplace disruptions, loss of productivity, worker replacement, training, increased insurance premiums and attorney fees.
When indirect costs are added to the equation, a single fatal workplace injury goes from costing an average of $1.42 million to costing nearly $3 million on average.
Safety Recognition Programs
Launching a safety recognition program is an exciting way to boost employee engagement and foster the growth of your organization’s safety culture. They also impact the company’s bottom line.
More organizations are seeing success across the board on metrics like customer satisfaction, productivity, and profitability simply through the implementation of a safety recognition program. What drives these kinds of results? Employees who are recognized regularly are motivated and happier. They tend to be more productive and have an increased emotional commitment to their jobs and their companies.
Employee morale increases when a company implements a safety recognition program. Employees who are engaged with a safety recognition program are often more engaged in the prevention of workplace accidents, saving your organization money when it comes to the direct and indirect expenses. Recognition programs and other safety-producing activities like safety talks and trainings are a must-have when it comes to budgeting company expenses.
Safety recognition programs are affordable and customizable to suit your company’s needs. When taking into the account the expenses of just one workplace accident, a safety recognition program practically pays for itself.