A recent article published in Safety and Health Magazine focuses on the return on investment for safety. Armed with the right figures on the costs of injuries, safety pros should be able to successfully argue that investments in safety will result in savings down the line.
So how much does an injury actually cost? Several organizations have different models they use to generate an estimate. The Centers for Disease Control and Prevention estimates a fatal injury costs $991,027. The National Safety Council, by contrast, estimates the average fatalities cost to society is a staggering $1.42 million. And overall, the estimated cost of occupational injuries and deaths in 2012 was a whopping $198.2 billion cost to society.
As high as these estimates are, the actual cost of a single death might actually be higher as these figures reflect only direct costs. Direct costs include medical expenses, workers’ compensation, civil liability or litigation costs and property losses. Indirect costs can be much more expensive however. For every dollar in direct costs, indirect costs could be as much as $2.12 according to the NSC. These indirect costs include workplace distractions, loss of productivity, worker replacement, training, increased insurance premiums and attorney fees. Using these calculations, a single fatal workplace injury goes from costing an average $1.42 million to nearly $3 million.
Despite the fluctuation in the cost-estimate models, Ken Kolosh, manager of the NSC statistics department stresses that the costs savings from safety are real. “Safety’s not just a nice thing to do,” he said. “It has a lot of economic relevance as well.”
The article continues with real world results by profiling the France-based company Schneider Electric who believed they had a good safety program. Although they held an injury rate that was below the industry average at the time, they still wanted to do more to minimize workplace injuries. Starting with an OSHA recordable injury rate that was 3.6 per 100 workers in 2002, they implemented safety measures to drop the rate down to a minimal 0.5 in 2013. That equals about 900 fewer people injured than would have been a decade ago. And on top of that, Schneider Electric is seeing more than $15 million in annual savings in direct costs alone.
To read the entire article and see how other companies have worked to drop their injury rates click here