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Proving a Negative: The Cost Benefits of Injury Prevention

Sept. 14, 2012
How much does a workplace injury truly cost? By breaking down the real cost of an injury, EHS professionals can better demonstrate the business value of safety to company leadership.
That occup
ational injuries are costly not only in dollars, but also in lost productivity and morale, likely came as no surprise to the EHS professionals attending “The Cost of Prevention vs. Hurting Employees in Light of Work Force Trends,” an America’s Safest Companies Conference panel discussion that offered tactics to help EHS professionals demonstrate the business value of safety.

The greatest opportunity to reduce costs of injuries is to eliminate or prevent those injuries from occurring in the first place,” said Bill Horsford, manager of team member relations at Toyota Motor Engineering and Mfg.

Horsford and fellow panel members Bill Margaretta, president of the New Jersey State Safety Council, Wayne Punch, director of safety/health/security at Milliken & Co. and moderator Mike Abcarian, partner with Fisher & Phillips LLP, discussed the true cost of injuries and how investing in prevention pays off with both a healthier work force and bottom line.

“Safety is a journey. It does not have an end,” said Wayne Punch, director of safety/health/security at Milliken & Co. “Management and associates have to drive the value of safety.”

According to Margaretta, EHS professionals are faced with a unique challenge: To demonstrate that preventing injuries will save money, they must prove a negative. “We’re the only profession in the entire world that gets paid for something not happening,” he said. “How do you prove that?”

Breaking Down the Costs

To help EHS professionals prove that negative, Margaretta outlined the five common cost elements related to workplace injuries:

  • Emergency response
  • Reports and case management
  • Interrupted operations
  • Lost revenue
  • Cost of damage
Often, he expla
ined, these costs add up to more than company leadership may expect. For example, an accident that results in a hand injury may appear to cost $7,000, but once you consider all the above areas, the true cost may be $12,000 to $15,000.

With that number, “now you have management’s attention,” Margaretta said. “Now you can do some bargaining with the CFO on improvements.”

Margaretta added that he would like to see a nationally recognized program that outlines exactly how companies can reliably compute the real costs of injuries. “Let’s get this ... and improve the profession,” he said.

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