All jobs come with different sets of advantages and disadvantages. Still, business owners must ensure that the former outweigh the latter for their employees. One of the ways you can do that is to make sure the workplace is as safe as it can be. In addition to showing that you care for the people who work for you, doing so will also avoid the financial costs of workplace incidents.
With that in mind, we wanted to take a look at the average cost of direct worker’s compensation after workplace injuries or harassment. Even if we don’t consider the potential liability you’re open to, there’s a hidden cost most people don’t think about.
For example, if your workers keep quitting due to unsafe conditions, you’ll have to keep wasting money on training new ones. Besides, no one wants to have a high employee turnover. After all, you can’t put a price on loyalty, can you?
So how can business owners encourage their workforce to stick around? Once again, it all comes down to providing good working conditions. But before we get into that, let’s take a second to determine the financial cost of having an unsafe work environment.
How to Calculate the Real Financial Cost of an Unsafe Workplace
Unfortunately, millions of people report missing work days because of work-related illnesses and injuries. Each year, thousands die from the consequences of those injuries and illnesses.
It’s tempting to chalk these depressing statistics up to the inherent risks of certain trades. Construction accidents and factory mishaps are a fact of life, right? Yet, in the past century or so, we’ve made technological strides that should make workplace injuries incredibly rare. Still, business owners make counterintuitive decisions in the interest of cutting costs.
By cutting corners on safety precautions, companies can end up paying much more to cover injured workers’ medical expenses. According to the Occupational Safety and Health Administration, businesses routinely pay almost $1 billion weekly for worker compensation. And that’s on top of paying for the cost of legal services if those employees decide to sue.
Of course, even that estimate isn’t taking into account the indirect costs of an unsafe work environment. Namely, in the event of a workplace accident, the business has to pay for the internal incident investigation. Moreover, it needs to financially support the implementation of new safety measures while recouping lost productivity and profits.
If any of the company’s property is damaged in an accident, it will also need to pay for repairs. Lastly, if the workers involved quit following the incident, there’s the added cost of training their replacement. If anything, that $1 billion per week number is an underestimate. But if you want to see the kind of costs you might incur for different kinds of injuries, OSHA has made a compensation cost calculator.
Now that you understand the numbers you’re looking at, let’s take a look at the other side of the story. What are the benefits of maintaining solid safety procedures at your company?
The Benefits of Promoting Workplace Safety
Reducing the number of work-related illnesses, injuries, and fatalities is the most cost-efficient course of action for any business. If nothing else, it would mean that a smaller percentage of the company’s profits are going toward medical expenses and OSHA penalties. Additionally, you would spend less money on conducting internal investigations — but that’s not all.
According to Britain’s Health and Safety Executive, addressing the health and safety of employees has many other benefits. Sustaining fewer workplace injuries means that employees use sick days less frequently. After all, people who work in companies that protect their employees tend to be happier and healthier. They also tend to work for the same company for longer — saving you the cost of training new personnel.
But even if a company can cover the cost of worker compensation and uninsured losses, the blow to its reputation can be harder to withstand. Businesses that find themselves on the receiving end of highly publicized legal actions often lose standing with suppliers and partners. Worse still, they can find themselves losing the favor of their investors, customers, and the communities they rely on.
Ultimately, practicing corporate responsibility is a good way to build a solid reputation in the business world. So if you’re not worried about paying injured workers’ medical bills and the company’s legal expenses, think of potential investors and customers.
Establishing a Safe Work Environment — the Three E’s of Safety
Ultimately, everyone has a right to feel comfortable at their place of work. So how can business owners create safe working conditions? One way to do so would be to implement the three E’s of safety — evaluate, educate, and enforce.
Firstly, you need to get a better idea of the risk factors that are in play. If you own any kind of manufacturing business, you’ll probably think about the risks that are associated with working in factories before you consider the safety of other workers.
Yet issues like gender discrimination and sexual harassment can leave you open to litigation just as easily as illnesses and physical injuries can. To that end, you should examine the company culture as well as the safety precautions that are already in place. Don’t just focus on the physical health risks.
For the next step, you’ll want to have everyone in the company study OSHA’s safety guidelines. Your employees should be able to recognize if any of them aren’t being implemented and come up with solutions. Then, you’ll be able to implement and enforce those new protocols.
For example, if you own a hotel, you might have a member of the cleaning staff note that working behind closed doors doesn’t make them feel safe. In that case, incorporating something as simple as a wearable alarm button might help your employees feel at ease. Of course, that particular solution should improve the security at other kinds of workplaces just as well.
Of course, there are many other ways to create a safe work environment — and many reasons to do so. If money isn’t an issue — think of public perception! Conversely, even if you’re not worried about your company’s reputation, you’ll still want to avoid unnecessary expenses.