AmTrust: A workplace safety program is an investment that pays for itself
AmTrust notes that some companies are saving $3 or more for every dollar they put into their workplace safety program.
Regardless of industry, there is always a risk of a worker injury happening on the job. The number of workplace injuries is declining thanks to new technology and a greater emphasis on safety control programs, but they still occur — and they cost businesses in numerous direct and indirect ways.
Managers and executives might be willing to invest more in safety control programs if they knew how much workplace injuries cost. According to AmTrust Financial’s “ROI of Safety: How to Create a Long-Term Profitable Workplace Safety Program” report, a safety program’s financial return on investment (ROI) is revealed in increased productivity, improved customer service, savings from fewer injuries and lower workers’ compensation costs. The issue is that these savings are often not immediately quantifiable and may take time to realize.
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An injured worker’s true cost
How much does an injured worker cost a business?
In 2017, according to a report from the National Safety Council, the cost per worker was $1,100, which includes the value of goods or services each worker must produce to offset the cost of work injuries. This is especially jarring for businesses with relatively new workers, as the Bureau of Labor Statistics found that nearly 40% of injured workers have been on the job less than a year.
The true cost of an injured worker is determined by how much the injury, directly and indirectly, impacts the workplace. Direct costs include medical expenses, civil liability, litigation costs and much more, while indirect costs pertain to loss of productivity, reputational damage, fines from the Occupational Safety and Health Administration (OSHA) and legal costs, among others.
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Watch the investment grow
Investing in workplace safety programs delivers savings in workers’ comp and other medical costs, and it also provides large financial savings in the long run. OSHA revealed that employers who establish employee safety programs are able to reduce costs related to injury and workplace illness by up to 40%.
The key is to look at the money being put into a safety program as an investment in the business, rather than an expense. The report notes that some companies are saving $3 or more for every dollar they put into their workplace safety program; other studies show that for every dollar invested in safety programs, companies get a return of $4-$6 in reduced costs.
In addition to protecting lives and business assets, effective safety programs provide a means for businesses to comply with state and federal regulatory requirements, reducing the concern over exposure to fines and legal sanctions. But the true value of a workplace safety program is not in the bottom line but in creating a workplace environment where employees feel safe coming to work.
No matter the size of a business or its industry, injuries can and will strike without a moment’s notice. Investing in employees and the business with a comprehensive workplace safety program will help keep costs down, foster employee loyalty and bolster a company’s reputation of being focused on more than just the bottom line.
The full findings of AmTrust’s report can be found here.
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