Statistics show that workplace injury rates are down in Australia. However, it is still almost double that of places like the US.
Currently, Australia's workplace injury rate is 4.2. In the US workplace injury rates are now down to 2.8.
If you are an employer, it's essential that you do everything in your power to reduce workplace injuries. Not only does this keep your employees safe—but it can also save you in costs.
There are many direct costs of workplace injuries. These include increased insurance premiums and workplace injury lawsuit costs.
What's more, workplace injuries also trigger a string of hidden costs. Depending on the types of injuries, associated recovery times, and the impact this has on your business, you could be looking at thousands of dollars in related and hidden costs per workplace injury.
To understand how important it is to minimize injuries in the workplace, it's essential that you understand these hidden costs. Once you know about the hidden costs at play, you'll be better equipped to curb them and increase workplace safety.
Keep reading to find out about the primary hidden costs of workplace injuries.
Time off Work
One of the more obvious hidden costs of workplace injuries is paid time off work. Depending on the types of injuries a worker has suffered, they will likely need to take time off for recovery.
Leave for recovering from injuries costs businesses in two ways. Firstly, as a business, you will need to continue paying the employee's salary while they are recovering.
At the same time, their absence means a reduction in productivity. Depending on their role in your business, entire projects could be slowed down or put on hold.
This is just one of the impacts behind the importance of general workplace safety.
Reduced Team Productivity During and After an Accident
Another hidden cost of accidents in the workplace is reduced staff/team productivity during and after the accident.
Say, for instance, an employee on one of your teams falls and hurts themselves. Chances are, most of the nearby staff will leave their tasks to try and assist.
Even after the injured worker has received medical attention or has been taken away, other employees aren't likely to be as productive or focused. Depending on the severity and types of the injuries, entire teams can operate at reduced efficiency for a day or more.
If an employee has to spend more than a few days recovering from injuries, this can impact production severely. To make up for their absence, other employees on their team may need to work overtime to stay on target. Unless a business engages in time theft, this triggers overtime costs.
If the injured employee is unable to come to work for a number of weeks, these overtime costs can mount up.
Lost Productivity Due to a Team Being Broken Up
Another factor that can trigger hidden costs around workplace injuries is if a team is broken up. When an employee has to take time off recovering from injuries, this can be very distrustful for their team.
Tight-knit teams rely on all their individual members. If teams have to be modified, it can take time for them to get back to their normal levels of productivity.
In some situations, you may need to hire a new or temporary employee to cover for an injured one. Not only does this comes with hiring costs, but you might also need to provide the new worker with training to get them up to speed.
Training comes with its own set of costs. If you outsource the training you will need to foot the bill for this. If you do the training in-house members of your existing staff will likely need to take time away from their tasks to train the new employee and show them the ropes.
Slowed Production Through Loss of Skill
Another of the hidden costs of workplace injuries is slowed production from loss of skill. If the injured worker was skilled, their absence will usually spark inefficiencies in production or projects.
Although other employees may be able to cover for them, they may take longer to complete tasks. If you hire a replacement employee, even after thorough training it can still take them some time to gain experience in the role.
Paperwork and Administration
Another factor that plays into the costs of accidents is paperwork and administration around workplace injuries.
From documenting and recording the accident—to speaking to witnesses and taking photos, dealing with an accident in the workplace involves a fair amount of time and paperwork. This means that administrative staff and managers will need to take time out from their regular work to handle admin related to the workplace injury.
Another hidden cost of accidents in the workplace is lowered morale
Even safe work environments can be the site of injuries. However, no matter how safe your workplace is, an injury will likely make other workers nervous and dampen morale.
Research has shown the employee morale is directly tied to productivity and profits. If morale is low, productivity will drop, and with that profits, creating a significant hidden cost.
Let Us Help You Reduce the Costs of Workplace Injuries
Workplace injuries can come with substantial direct costs. What's more, there are also numerous hidden costs of workplace injuries.
Reducing workplace injuries is a must, not only for worker safety—but also for protecting your bottom line.
So how can you optimize your workplace and its processes to lower the risk of injuries? There are many ways you can reduce injury rates in your business, and Gallagher Bassett can help you do this.
We specialize in assisting businesses to anticipate and mitigate risk factors that lead to injuries. Besides this, we also aim to simplify worker's claims legislation for your business.
To reduce workplace injury costs for your business by up to 60% within the coming year, request a free portfolio analysis to discover how we can help you with your claims management.