Through health and safety practices and policies, organisations will usually do everything within their power to mitigate the risks of injuries on duty. However, because companies are made up of the people employed there, and people are susceptible to errors, workplace incidents do unfortunately occur, often resulting in injury or illness and sometimes death.
At face value, we’re all too familiar with the direct costs of workplace incidents, which may include:
- Workman’s compensation
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- Ongoing care and/or rehabilitation
- Salaries paid during down-time
- Death and disability claims from insurers
What some organisations fail to consider fully are the indirect costs associated with workplace incidents which, according to US-based research published by ANVL in 2019, comprise 71% of the actual costs.
The indirect costs of workplace incidents and injuries
Companies facing a workplace incident will find that direct costs are just the tip of the iceberg, a prelude to unexpected costs and losses to come. However, knowledge is power – here are some of the indirect costs that employers and employees can pre-empt during a workplace incident resulting in injury or death.
Occupational health and safety penalties
If it’s discovered that an accident was the direct result of negligence, a company may be penalised by the Department of Labour and could face hefty fines or even imprisonment. South Africa’s Occupational Health and Safety Act (OHSA) demands that employers ensure a safe working environment and offers guidelines on things like first aid, availability of drinking water, restroom and changing room facilities, lighting, workable temperatures and even noise levels.
Negative impact on production
When an accident occurs, production is brought to a grinding halt, while the injured are attended to, and while officials conduct investigations and compile detailed incident reports. As business is resumed, being understaffed may also impact production.
Loss of morale
Workplace incidents that result in injury or death are upsetting to the people working in the same environment, and companies can expect their teams’ morale [2] to suffer. The impact of this will be felt on productivity and efficiency, but employers will need to allow their staff the time to recover and even provide access to trauma counselling if the event was severe.
Working harder, getting less done
When an organisation is left with fewer employees or a team supplemented with trainees, those on the ground are forced to work harder to compensate for the lost manpower. This often leads to fatigue, disengagement and burnout, and the knock-on effect of this is lower efficiency, poor delivery and even dissatisfied clients.
Replacing damaged equipment
Workplace incidents that result in damaged equipment can have two separate cost implications. First, and most obvious, is the replacement cost of the equipment. Further to this is the downtime that organisations may experience while trying to have damaged equipment replaced. This may take days or weeks, depending on how efficiently insurance claims are processed.
Recruitment and retention costs
If an injured employee is not able to return to work, the company will face the task of recruiting new talent or training internal staff. In addition, while recruiting new candidates, existing staff who may be reeling from a traumatic experience will need to receive extra care and attention, so as not to lose them and incur further recruitment costs.
Correcting the company’s public reputation
Unfortunately, the public casts a critical eye on organisations that have workplace incidents resulting in injury or death. Clients may be concerned about their own reputation or quality of service delivery, or may feel a moral obligation to withdraw business. Whatever the reason, this could have a brutal impact on the bottom line for a company already navigating the aftermath of the incident.
Keeping employees safe at the heart of business
While we obviously consider the cost implications of recovering from a workplace incident, it’s important to return to the heart of the matter. That is, of course, keeping your people safe from harm and reacting quickly to ensure their recovery when an incident does occur.
Internal link
A potential external link to a reputable article; US-based, non-competitor
