Injuries in the workplace can be costly for your business. In the U.S., it’s estimated that employers pay more than $1 billion per week in direct, non-fatal workers’ compensation costs. That’s an alarming figure, and it’s enough to make every business owner ponder how to reduce such an expense.
As it turns out, employers who go above and beyond to exceed safety standards in the workplace could see an increase in profits. By reducing injuries and illnesses, and the workers’ compensation payments, medical expenses and lost productivity that can come along with them, you might see a healthier bottom line.
It’s important to consider the indirect costs
In the event that one of your employees suffers an injury on the job, a few expenses may immediately come to mind. You probably figure that you’ll need to pay out workers’ compensation, medical expenses and potentially legal fees—in other words, direct costs.
While these costs can add up in a hurry, you also need to consider the indirect costs. These can include any of the following:
- Repairs to damaged equipment
- Lost productivity
- Accident investigation
- Implementing corrective safety measures
- Time lost to training replacement employees
An injured employee can trigger a business expense domino effect, often resulting in costs you wouldn’t expect.
Evidence of a return on investment,and an uptick in morale
Putting money into the safety of your workplace may result in a decent return on investment. The giant aluminum manufacturing company Alcoa saw its earnings increase from $0.20 to $1.41 per share within five years of investing in safety. Their sales also grew by 15 percent each year in that duration, as workplace injuries steadily declined.
The Occupational Safety and Health Administration (OSHA) offers companies who wish to go beyond OSHA standards what they call Voluntary Protection Programs. OSHA says that program participants have a days away, restricted or transferred rate that’s 50 percent lower than that of their peers. This sort of decrease in lost time due to injury could lead to an increase in productivity.
While creating a safer workplace can mean higher profits, it can also lead to an increase in employee morale. Workers are much more comfortable in a safe environment, and as such, they’ll want to be at work, and they’ll work harder when they’re there. When you look at it on balance, the pros of a safer workplace far outweigh the cons.