Understanding The Cost of Workplace Injury: Why Training is Important

The last few years during and post-COVID-19 have been tough on the economy, especially on small businesses. Business owners are working with tighter budgets and are cutting or reducing many activities or programs that don’t directly benefit the bottom line. What to cut and what to keep? Undoubtedly, this is a tricky balancing act for any manager as each budgetary decision has many pros and cons. Unfortunately, in too many cases, safety ends up in the “cut camp”, whether it’s reducing safety equipment expenditures, personnel, or training. Unfortunately, some employers only rethink the importance of workplace health and safety training after an injury occurs. It’s not only your legal responsibility to combat accidents, illness, disabilities, and disease in the workplace – it’s also the right thing to do.

Costs Associated with Workplace Injuries

Injuries can be expensive, but do you know how much an injury costs? With any injury, there are two types of direct and indirect costs. Let’s start by examining each type.

Direct costs are measured easily. Some examples are:

• Medical: Employer premiums are paid to WorkSafeBC to pay the health system for any medical, pharmaceutical and recovery costs needed by workers affected by a workplace injury.
• Replacement of things: If an injury or illness happens due to defective or missing equipment or machinery, the employer must pay to fix, replace, or install it. Sometimes these costs can also affect other business needs, such as property or fire insurance.
• Hiring/retraining employees: If an illness or injury is so severe that the worker requires recovery before returning to work, many employers will usually have to hire a temp to cover that position. Paying for the training and time of temp workers is another example of the direct cost of injury.
• Legal: If a lack of compliance with safety laws is found to cause a workplace illness or injury, there may be other direct costs to employers from court proceedings, including fines -or even jail time that the courts apply.

“Indirect” costs can far exceed direct costs. Unfortunately, these are often not easily measured. Indirect costs can be 3 to 10 times higher than direct costs, depending on the type of business and the circumstances following the accident. Some examples of indirect costs are:

• Wages during work stoppage after injury: time to assess worker condition and condition of equipment, co-workers who stop to help, internal first responders, time spent seeking medical treatment.
• Impact on quality of personal life: When a worker is injured, typical areas of their life like school, relationships with partners, children and friends, the ability to take part in personal health and leisure activities, or volunteering in community events, can be changed significantly due to an injury in a workplace. The social and emotional impact of injury is real and can be challenging to measure.
• Indirect impact for workplaces: Previously injured workers returning to work could have to retrain for other jobs because they can no longer do what they’ve always done. Workplace incidents and injuries can also negatively influence worker morale and even how the public perceives or feels about that workplace or industry.
• Increase in worker’s compensation coverage: higher premiums
• Administrative time spent by staff: HR, safety personnel, and supervisors to complete documentation, coordinate return to work and investigation reporting.

Looking at an injury from a holistic perspective, we can see it affects not only the individual who got injured but the entire company. An injury hurts production, lowers morale, requires excess administrative effort, and ultimately removes money from the bottom line. Of course, there are many other reasons why you should never skip safety training. Still, there is a straightforward way to avoid it: Make sure workers regularly attend the proper safety training course for their industry and carefully follow the workplace safety regulations they have learned in class.

Global Hazmat is a training and consulting company that can keep you updated with the newest workplace safety training requirements. Our online course catalogue makes it simple for you and your employees to train in all elements of transportation of dangerous goods, workplace safety and other health and safety requirements. Contact us to learn more.