The Cost of Workplace Accidents: from Minor Injuries to Fatalities
According to a study published by PBS, the costs (both immediate and long-term) of workplace injuries makes up about 3% of the total Gross Domestic Product. To put that into perspective, the entire food industry, including all fast food franchises, farms, grocery stores, etc. makes up only 8.9% of the GDP.
While 3% might sound like a tiny percentage of the total spending in the US, it is actually a statistically significant number, indicating that more than $150 billion is spent every year on workplace injuries.
But what do the actual injuries themselves cost a business and why should you care? Here’s what different severities of injuries could cost your business and why avoiding injury is always less expensive than paying for the aftermath. In all of these sections, the estimated costs will be a combination of worker’s comp, management time, direct medical costs, and more amorphous concepts like the cost of hiring a replacement, paying overtime, reduced productivity, fractured morale, lawyer fees, etc.
Minor injuries are any injury that does not disable or incapacitate a person, nor is it evident by looking at that person. This may range from the very trivial, like stubbed toes or jammed fingers, to the more severe, like sprains or dislocations. The average cost of these types of injuries—even though the person is in no serious or long term distress or danger—ranges from $9,000 to $28,000, depending on the type of injury and the industry. These types of injuries are not relegated just to dangerous industries, either.
Non-Incapacitating Evident Injury
A non-incapacitating evident injury is still non-lethal and relatively superficial, but can still come along with a number of serious costs. These might include a broken arm or leg, which will not necessarily prevent someone from working, but there is obvious harm done to their person. Depending on your industry, these types of injuries can cost anywhere between $28,000 and $60,000.
Nonfatal Disabling Injury
These types of injuries may not completely remove someone from the workforce, but they can make it more difficult to find work or to do particular jobs. Though people with these types of injuries from workplace accidents might find themselves perfectly capable of working, they are legally eligible for disability pay. Costs of nonfatal disabling injuries can soar to more than $80,000.
Incapacitating injuries do remove the person from the workforce, making it impossible for that person to earn a living. Because this indicates a very unsafe work environment (or, on the other hand, a very incompetent or unfit worker), the costs begin to skyrocket at this level. The average incapacitating injury costs up to $235,400, but can cost much more if the injury is especially grievous or has caused psychological damage, as well as physical damage.
While deaths are the least common type of workplace accident, especially in non-dangerous industries, they are the most expensive. With the average cost of a slip and fall being more than $40,000 (according to a National Safety Council study), it’s not surprising that a death would cost a business more than $4.5 million on average. While the business involved in the accidental death might not immediately see those costs, it is likely to see those costs in the long run, as this kind of injury can seriously wound the entire workplace’s morale and productivity.
Why Should You Care?
With today’s strict regulatory guidelines, there are fewer and fewer businesses that have very unsafe working environments. Many of the most common injuries are actually the result of a person being unfit for that particular job. They might not have the right skill level, mental capacity, use of their senses, or physical capability to perform a specific task. This can create an environment that is very unsafe not just for the individual, but for those around him or her.
The accidents that are a result of this kind of situation are very costly, as you have seen above. The cost of paying for an accident, even a very minor accident, proves that it is more cost-effective to know an individual is fit for work before they begin that work than it is to pay for the fallout of putting someone on a job they are not capable of doing safely. A fitness for work assessment tool like OSPAT can eliminate the risk of anyone impaired entering a working operation, which in turn will reduce the chances of having to pay the high costs of a workplace accident.
The Impact of a Fitness for Work Tool on Workers’ Compensation Premiums
Workers’ compensation is something that every single business has to have. A necessary cost, and for some businesses, especially those that are, by their nature, dangerous, it can be a very expensive cost. Your premiums may not rise with every claim that you make, but excessive claims, made by companies who experience many accidents or incidents throughout a year will see sharp increases in how much they have to pay for this kind of insurance, as this article states.
Fortunately, there are ways to offset the premiums you have to pay for workers’ compensation coverage, and they start with preventing dangerous accidents and incidents from happening in the first place. A fitness for work tool like OSPAT is one of the best ways to reduce the cost of these premiums. Here are some of the ways that OSPAT can help:
A fitness for work tool like OSPAT can eliminate the risk of anyone impaired entering a working operation. OSPAT, for example, uses a scientifically verified method to first, create a baseline for your employees, based on daily tests. Every day, your employees take the test. After twenty days, the tool has an effective profile against which to grade those daily tests and determine whether or not that employee’s performance is not impaired before entering the workplace.
Here’s the bottom line: some accidents happen because sometimes accidents happen. Insurance companies realise this and that is why your premium will not always jump after your first claim. Sometimes, however, accidents and injuries are the result of the employee who is injured or another employee’s inability to complete their job safely.
Physical and emotional deficiencies can make the working environment very dangerous for the worker himself and for those around him. OSPAT tests everyone checking they pass before they proceed to work on a daily basis so that the entire workplace is safer.
Fewer Claims over Time Means Lower Premiums
Once you have had achieved a safe environment, OSPAT helps to maintain that safe environment. The longer you have an accident and injury-free business, the less you have to pay for workers’ compensation. Why? Because if you do not have to use this kind of insurance very often, insurance companies see your business as a safer investment. You have to continue paying them, but because they are less likely to have to pay out for an injury, they can lower your premiums. The longer you maintain this streak, the less you have to pay.
There is a direct correlation between how safely your workers are able to complete their job and how much you have to pay for workers’ compensation insurance. This insurance is widely considered to be the most expensive and the most frequently used—it doesn’t have to be either of those things. This, however, requires you to not just assume that your employees are fit for work, but to know that they are.
What Is the Direct Impact of a Fitness for Work Tool on Workers’ Compensation Premium?
The better your fitness for work tool is (ranging from not using one at all to using one of the best, like OSPAT), the lower your premiums will be. Fitness for work tools have been shown to help businesses maintain a safer working environment. If you use one, you’ll have to make far fewer claims, which means lower premiums—it really is that simple.
While the savings on your premiums are definitely a good reason to start using a fitness for work tool, creating and maintaining a safer workplace for your employees on a daily basis is the biggest benefit.
Avoiding the Cost of Work-related Injuries
While some businesses are in industries which are more dangerous by definition, no business is immune from workplace accidents. Every accident comes with a cost. Employers pay an estimated $1 billion per week in workers compensation. Aside from the obvious costs, there are countless unforeseen costs as a direct result of an accident.
If an accident has a worker out of action for any extended period of time, their position will need to be filled. This involves taking time to interview, hire, and train a suitable replacement. A person who is promoted from within the company will also need to be trained and prepared for the position.
Minor accidents require an injury report and many will require a full investigation. If a fault is found within the implementation of policies or faulty equipment is to blame, there will be costs to repair equipment and/or update policies. Often, damaged property will also result from an accident and it will need to be repaired.
The costs to your business’ production also need to be considered. When an accident, especially one which involves serious injury or death, occurs the entire line of production is halted. The reputation of your company can be significantly damaged and employee morale can drop dramatically in such cases. When employees are fearful of coming to work, it results in a rise to absenteeism and results in resignations too.
Accidents are more likely to happen when an employee is either not trained or not physically capable of performing their function. The good news for employers is that using a fitness for work assessment system like OSPAT analyses the employee’s ability to perform a simple assessment before the commencement of their working shift every day.
OSPAT assessments identify significant variations between an individual’s current assessment and their historical profile. Results are relayed in real time to the individual concerned and the supervisor(s) having an irrevocable duty-of-care for safety in the work place. Results are also recorded in a comprehensive database usually administered by occupational health and safety managers.
In addition to being non-invasive and non- judgemental, OSPAT provides maximum privacy of each person’s assessment data.
Responsible employers do not endeavour to police the social behaviours of employees. Their preference is to encourage a healthy lifestyle by education and to provide support through employee assistance programs, if required.
Not only is taking care of employees a responsible business decision, it is a fiscally responsible one. Accidents can be prevented. You do not need to rely on hindsight to know what can be done to keep employees safe. A few preventative measures put in place can save time, money, and headaches down the road. Every business owes it to themselves to take advantage of an assessment tool, like OSPAT, to keep business running and profitable.