No employer likes to think about workplace accidents, but they can happen to anyone, in any industry.
The cost of workplace accidents can be astronomical, though, and adversely affect a company’s financials in ways you might not even realize at first. Therefore, it’s so important to practice effective accident prevention and training procedures.
Here are four ways your company could be financially devastated by a workplace accident.
1. Medical costs
A company can expect to be liable for some - if not all - of an employee’s medical and work injury costs. And while there are insurance policies that can cover some of these expenses, don’t forget there’s likely to be a deductible, too, that must be paid first. In addition to initial emergency care, costs can include on-going rehabilitative care, medications, and even adaptive equipment like walkers.
2. Regulatory fines and penalties
Depending on the nature of the accident, a company could be liable for hefty fines and penalties. Agencies like OSHA (Occupational Safety and Health Administration) can come in and do a full investigation to assess these costs. And it’s not just a per-incident cost. Every violation that’s noted can have its own fine. Those figures can easily add up to a million dollars or more for just one workplace accident.
3. Lost productivity and customers
The downtime a company experiences due to the interruption caused by worker injury can be significant. Not only is the workflow disrupted by the incident itself but things like investigations and any repair or replacement of machinery, for example, can reduce a company’s ability to fulfill orders or otherwise carry out its mission. When your customers can’t get what they need from you, they will turn to other companies, meaning the cost of safety accidents can seriously impact your bottom line.
4. Investment in employee safety training programs
Even if a company already has safety training programs, policies, and procedures on the books, a workplace injury could prompt an agency like OSHA or your insurance company to assess that program and dictate improvements. Companies can incur great costs in re-evaluating their safety program for weak spots and rolling out new or revised training for employees. This costs usually include on-going training needs, too, to make sure similar workplace accidents don’t happen again.
Why Safety Should Be a Priority for All Departments
It’s easy to think of the work of the safety department as removed from the other departments. After all, its objectives, while important, don’t visibly have a direct bearing on outcomes like productivity and sales figures. But seeing departments as silos overlooks how vital it is to have a workplace where safety and programs are synched with the work of other departments.
The benefits of ensuring that human resources (HR), operations, finance, legal, information technology (IT), and marketing/communications are in alignment with the safety department extend outward to include tangible benefits and risk reduction across the board for a company.
One of HR’s many roles is to ensure that employees have the required credentials for their duties in the company. When they work with safety department to know which employees need what training, they can more efficiently make sure those obligations are met. HR may also have a role in documenting training, maintaining records, and providing corrective action to employees if needed, so they need to know what the safety standards are.
HR should be on the same page as a safety department in underscoring how important it is to have and follow safety rules in order to reduce workplace illness and injury. When those incidents do occur, HR typically has a role in documenting, investigating, and responding to incidents as well as investigators from insurance companies, regulators, OSHA, and more. Good communication between HR and the safety department ensures that both sides have the resources to do their jobs effectively.
The best way for the operations department to reach its goals is to ensure the safety department has access to facilities and honest insight into workflows and procedures; this allows the safety team to develop effective and appropriate workplace safety plans, policies and procedures that balance operational needs with workplace health and safety needs of employees, while being mindful of risk to the company, too.
It’s vital that operations staff work according to company and OSHA workplace health and safety rules. If there should be a serious incident, it could interfere with the company’s ability to fulfill its duties to vendors or customers. In addition, depending on the conditions under which the incident occurred, the company could be liable for legal, regulatory or other fines and penalties, as well as lawsuits.
When the operations department is equally committed to employee safety, it becomes a partner in managing and mitigating the risk that comes from potential workplace illness or injury.
Finance and Legal
It’s always possible that litigation could follow a workplace injury incident, especially if it affected people who aren’t employees. For example, consider what might happen if your delivery truck driver rear-ended another vehicle or a vendor in your warehouse was struck by another employee operating a piece of machinery. Litigation can be extremely costly and drag on for years, affecting a company’s financials for a long time.
The cost of accidents at work can be devastating. Not only can they affect a family but they can financially ruin a company, too.
The ripple effect could include medical and insurance costs, fines and penalties, lost productivity, litigation, and investment in employee safety training. Ensuring that your company has the most effective safety culture, practices and procedures in place is the best way to minimize the chances that your company will find itself in this situation.
Collaborating with the IT department is helpful when safety leaders are exploring EHS software solutions. With EHS software, safety teams can better mitigate occupational health and safety risk by tracking, analyzing, and managing company-wide safety data - from employee training, audits and inspections to incident reporting, compliance management and beyond.
Help from IT enables safety teams to vet different tools and solutions, especially from a technical point-of-view. With the increase in cloud adoption, the question of data security is often raised. Your IT department can help you understand what solutions are using secure coding practices, operations policies, data center design, and network architecture.
Marketing and Communications
The marketing and communications department is critical to ensuring that all employees understand how the safety and accident prevention objectives are in alignment with the company vision and goals. Consistent messaging is made possible by the communications department’s work with the safety department, and it can help staff remember important safety rules and procedures.
In addition, the safety-related messages that come from the communications department reinforces that upper management also believes that work safety matters. That can improve employees’ motivation to adhere to safety policies and improve employee engagement: it’s easier to do well at work when you believe that your boss actively wants you to do well and be well, too.
The benefits go beyond in-house staff, though.
Communicating to outsiders, including investors, that your company has and actively supports employee safety training programs can improve your company’s reputation. Consumers and vendors like to do work with companies who are responsible stewards of all resources, including human resources.
Effective messaging about employee safety programs also conveys to investors, vendors, and consumers that the company takes its responsibilities seriously, especially when it comes to reducing liabilities that could jeopardize future productivity or service levels.
Synching Safety Across the Enterprise
Making sure the work of the safety department is in synch with a company’s other departments is a powerful tool in reducing risk while enhancing viability among investors, customers, and vendors.
While it might not be readily obvious, the work of multiple corporate departments in particular can develop key relationships while managing risk through planning, coordination, and effective, consistent messaging, both internal and external.