Cost of Safety: A Bargain Compared to Cost of Accidents
The cost of safety is part of an occupational health and safety (OHS) expert’s job and generally consists of taking a look at an organization’s cost of training and cost of personal protective equipment (PPE).
Their cost of safety reports include the total cost of such things as:
All veteran OHS experts tell organizations the same thing: The cost of safety tools is?minor compared?to the cost of workplace accidents.
Organizations trying to attempt to figure the cost of safety need to first determine the goal of the cost of safety.
What does the company hope to achieve by tracking costs?
Defining safety costs to include in construction bids, for example, requires a different degree of detail than justifying expansion of the corporate safety function. Determining the goal is crucial because the goal determines the level of effort needed to accumulate cost data—the degree of detail and preciseness of the data collected.
Determining the cost of safety should take into consideration a realistic view of the cost of accidents. The 2019 cost of injury in the U.S. was?$4.2 trillion, according to a report in CDC's Morbidity and Mortality Weekly Report. The costs include spending on health care, lost work productivity, as well as estimates of cost for lost quality of life and lives lost.
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The total cost of work injuries in 2021 was $167.0 billion. This figure includes?wage and productivity losses?of $47.4 billion,?medical expenses?of $36.6 billion, and?administrative expenses?of $57.5 billion. This total also includes?employers’ uninsured costs?of $13.8 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 $5.4 billion and?fire losses?of $6.3 billion.
The cost per worker in 2021 was $1,080. 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 2021 was $42,000, while the cost per death was $1,340,000.?
Want to learn more? Tonex offers Cost of Safety: Investing in a Safer Future, a 2-day course where participants learn how to define the Cost of Safety and its components within an organizational context.
Participants also learn how to calculate direct and indirect costs of workplace incidents and safety measures as well as develop and analyze safety budgets and investment strategies for maximum ROI.
This course is intended for safety managers, operations directors, HR professionals, risk assessors, and any key personnel responsible for workplace safety and organizational risk management across all sectors.
For more information, questions, comments, contact us.