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Safety and health managers face difficulties when trying to convince upper management that investing in training or equipment will lead to safer workplaces. Experts say the savings exist and investment in safety will result in savings down the line.
First, you should answer this question: how much does an injury actually cost? Several organizations estimate that an average cost is close to € 900,000. Direct costs include workers’compensation, medical expenses, civil liability or litigation costs. Indirect costs can be much more expensive: workplace disruptions, loss of productivity, worker replacement, training, increased insurance premiums and attorney fees.
It goes without saying that safety is not just a nice thing to do, it has a lot of economic relevance as well.
Just to give you an idea, the France-based company Schneider Electric recorded an injury rate equals to 3.6 per 100 full-time workers. Still, the company wanted to do more to minimize the risk of a worker getting injured.
Schneider Electric wanted to identify and eliminate hazards that could hurt someone. As a result of investing in safety, the company saw its injury rate to 0.5 in a decade. That equals about 900 fewer people injured that would have been a decade ago as well as a € 12 million annual savings.
Other companies have seen similar improvement. As every safety manager knows, selling the idea of investment in safety is always a difficult task.
To show the upper management evidence of the financial return on investment through increased productivity and money savings from fewer injuries could help with the achievement of a safer workplace.
As far as handling operations are concerned, a few years ago Toyota carried out a study showing that every single dollar spent on safety is equal to 100 dollars needed to be spent on compensation, medical expenses and alike costs.