The Dollars and Cents of Health & Safety Programs

The Dollars and Cents of Health & Safety Programs in the Workplace

Why Have a Health & Safety Program?

Do you want to increase your workforce’s productivity? Increase employee morale and reduce staff turnover? One way to achieve this as well as reduce insurance payouts on injuries and illnesses and potentially lower your company’s insurance premiums is to have a robust Health & Safety Program in place.  The overall thought is, “it’s just good business practice to protect workers.” Makes sense, right? So why are we still seeing increasing trends of workplace injury/illnesses, amputations, hospitalizations, and fatalities?

If you are an employer and your health and safety management programs and practices are not up to par, this could lead to serious issues and have long term effects on your business such as:

  1.  Legal Costs
  2. Expensive Insurance Premiums
  3. Degraded Reputation
  4. Possible Closure
  5. Possible OSHA Fine(s)

How Much Costs are we Talking About?

The costs of workplace injuries and illnesses include direct and indirect costs. Direct costs include workers’ compensation payments, medical expenses, and costs for legal services. Examples of indirect costs include training replacement employees, accident investigation and implementation of corrective measures, lost productivity, repair of damaged equipment and property, and costs associated with lower employee morale and absenteeism.

According to the National Safety Council’s estimate of the total economic costs of work-related deaths and injuries in 2020 the total cost of work injuries was $163.9 billion. This figure includes:

  • wage and productivity losses of $44.8 billion,
  • medical expenses of $34.9 billion, and
  • administrative expenses of $61.0 billion.

This total also includes employee uninsured costs of $12.8 billion, including the value of time lost by workers other than those with disabling injuries who are directly or indirectly involved in injuries, and the cost of time required to investigate injuries, write up injury reports, and so forth.

The total also includes damage to motor vehicles in work-related injuries of $4.3 billion and fire losses of $6.2 billion.

The cost per worker in 2020 was $1,100. This includes the value of goods or services each worker must produce to offset the cost of work injuries. It is not the average cost of a work-related injury.

Cost per medically consulted injury in 2020 was $44,000, while the cost per death was $1,310,000. These figures include estimates of wage losses, medical expenses, administrative expenses, and employer costs, but exclude property damage costs except to motor vehicles.

What are the Benefits of Having a Safety Program?

Protecting workers should be the primary goal of any company and it starts with their safety management philosophy and implemented program(s), but, it also brings benefits to the bottom line. Employee safety programs are designed to help employers and employees reduce workplace injuries and illnesses. Investment in workplace safety programs bring savings in worker’s comp and other medical costs, but also gives a large financial savings in the long run. According to OSHA, employers who establish employee safety programs are able to reduce costs related to injury and workplace illness by up to 40 percent. These reductions bring immediate return on investment in the form of increased profitability.

The key is to look at the money put into a safety program as an investment in the business, rather than an expense. According to AmTrust Financial, some companies are saving $3 or more for every dollar they put into their workplace safety program yielding thousands of dollars of savings each year. Other studies have shown that for every dollar invested in safety programs, companies get a return of $4-$6 in reduced costs.

How Can Equity Help?

Equity’s safety professionals are certified by the Board of Certified Safety Professionals (BCSP) and tailor all safety programs and educational trainings based upon the employer’s and/or the employee’s required duties, functions, competencies, tasks and applicable safety and health requirements.

Equity’s overall objective for all educational training and competency assessments are to ensure employees can work safely under various site conditions.

Contact Faron Moser, CHST, today to learn more about Equity’s Health & Safety Services. or 973.527.7451 x 303

Share on linkedin
Share on twitter
Share on facebook

Keep up to date with industry and firm news, events and hot topics at the firm by joining our mailing list.