The Real Cost of Not Enforcing Safety

By:Anita HawkinsCategories: General

Companies that are proactive in preventing injury take initiatives to find and fix hazards in the workplace before they become an issue. Many workplaces have adopted programs effective in reducing injury, illness, and fatalities. At first, these programs may seem expensive to operate and ineffective in their results. Why put money into a safety program? Isn’t it just one more thing to have to manage? Do employees even respond to such a thing?

Skepticism and tight purse strings have kept companies from realizing the benefits of a safety recognition program. But, before discussing the benefits of a safety recognition program, it’s important to examine the real cost of workplace accidents. How are these companies damaging themselves by not having a safety program?

More than 12 workers die in job-related accidents every day. That’s over 4,500 a year! Job-related injuries and illnesses affect more than 4.1 million workers per year. Workplace injuries and illnesses can cause not only physical pain and suffering but also loss of employment and wages. The worker and their families pay the emotional toll of the injury or death. They might also have to worry about the inability to maintain a previous standard of living and burdening debt. Many companies pay for worker’s compensation benefits to help ease the burden and cover these costs.

According to OSHA and a study by the Liberty Mutual Research Institute, the direct cost of workplace injuries is over $50 billion, and the National Academy of Social Insurance (NASI) estimates the annual worker’s compensation benefits paid for all compensable injuries and illnesses at almost $60 billion. These payouts aren’t the only monetary expenses companies face. There are also indirect expenses that can drive up the cost of not being safe in the workplace. Indirect expenses can include:

  • Wages paid to injured workers for missed work days not covered by workers’ compensation;
  • Wages paid to time lost due to work stoppage;
  • Administrative time spent completing paperwork and following up with reporting injuries;
  • Employee training and replacement costs;
  • Lost productivity either related to new employee training or the accommodation of injured employees; and
  • Costs of replacing damaged material, machinery, and property.

OSHA estimates that these costs can add up to more than four times the amount of direct costs associated with worker’s compensation benefits.

But the real cost isn’t just monetary. The human cost of these incidents is enormous. Workers and their families need to know that companies are taking every available opportunity to protect employees. Companies that invest in safety programs often find more significant cost savings when it comes to injuries and illnesses in the workplace. Numerous studies have proven the effectiveness of safety programs designed to promote continuous safety improvement and accident prevention.

OSHA has examined the effectiveness of safety programs. They investigated programs to determine if they were effective in creating workplace culture, reducing injuries, illnesses, and fatalities and lowering workers’ compensation and other costs. They also researched to determine if programs were effective in improving morale and communication as well as overall employee attitudes.

Studies proved that safety programs are effective in reducing injury and illness incidents up to 60 percent!

What makes safety programs so effective? As part of their extensive study, OSHA also examined program implementation and whole company engagement. The study highlighted crucial program elements including management commitment and leadership, employee engagement, and how well the company integrates the program with their business plan. They also looked at whether or not the company is evaluating and updating the program frequently.

Employee involvement is one of the key elements of an effective safety program. Programs entice employees to stay involved by offering incentives that motivate them to practice continuous safety and actively display corrective behaviors. The most effective safety programs implement a recognition element that allows company leaders to give rewards to employees who participate in safety training, quizzes, discussion forums and more. Programs boasting these elements keep employees informed and involved in important safety information. Employees who are better educated and motivated to take continuous safety measures are safer, healthier, and happier in the workplace. OSHA estimates that’s businesses can achieve 15 percent to 35 percent cost savings through the implementation of injury and illness prevention programs. Not only are employees safer and more engaged in the workplace as a result of utilizing a program, but the overall outcome of program use also saves companies $9 billion per year in workers’ compensation costs.

Imagine a workplace where workers demonstrate improved compliance for safety regulations, improved processes that increase production, and engagement levels that increase overall happiness, health, and safety in the workplace. Companies with safety programs have improved business and cost savings when it comes to reduced worker’s compensation premiums, fees, and fines, as well as repairs and other indirect costs. And most of all, imagine a workplace that suffers the human cost of injuries, illnesses, and fatalities.

With a safety recognition program, companies can achieve these results!

Injury and illness prevention programs are flexible and can be customized to suit a company’s needs and budget. Programs can implement safety engagement tools, recognition and incentive platforms, data tracking and reporting, and other core elements. Businesses of any size can afford and benefit from safety programs. By working with a safety program provider, companies can determine their needs, design a program that suits them and stay within budget all while increasing safety, recognizing employees for their involvement, and saving money.

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