Last Updated on October 23, 2023 by Ossian Muscad
Workplace safety, often overlooked, carries with it a weighty cost that extends beyond the immediate and tangible. The manufacturing industry experienced 490,000 preventable injuries in 2022, marking an alarming 10% increase in fatalities from the previous year. These figures, sourced from the National Safety Council (NSC), serve as a wake-up call for businesses.
More than just a compliance obligation, ensuring safety is a pressing concern that reaches the heart of a company’s operations, financial health, and employee well-being. This guide aims to lay bare the true cost of workplace safety, providing valuable insights into safety incidents’ financial and non-financial implications. In the forthcoming sections, we will explore in depth the direct costs, indirect costs, and the profound human impact.
Workplace Safety Incidents: A Comprehensive Overview
Workplace safety incidents continue to be a significant concern for employers and employees. According to the U.S. Bureau of Labor Statistics, millions of nonfatal workplace accidents occur annually in the United States’ private sector. These incidents not only affect the health and well-being of workers but also have substantial financial implications.
Liberty Mutual’s 2022 Workplace Safety Index estimates that U.S. employers pay over a billion dollars every week for serious nonfatal injuries. This figure, however, only represents the direct costs to employers. The National Safety Council (NSC) points out that the total injury costs are more than three times this amount when accounting for expenses incurred by individuals and society.
Last year, these costs reached an estimated $167 billion. The breakdown of these costs includes:
- Administrative expenses such as insurance and legal costs ($57.5B)
- Loss of wages and productivity ($47.4B)
- Medical expenses ($36.6B)
- Uninsured costs, such as resources for investigation, reporting, and time lost by other workers ($13.8B)
- Fire losses ($6.3B)
- Motor vehicle damage ($5.4B)
These figures highlight the importance of proactive measures to prevent workplace safety incidents and the need for robust systems to manage them when they do occur. The impact of these incidents is far-reaching, affecting not just employers but also individuals and society as a whole.
An In-depth Look at Individual Incidents and Noncompliance Costs
While the National Safety Council (NSC) provides a comprehensive picture of the total costs associated with all workplace injuries, it’s also instructive to examine these figures individually. According to NSC’s estimates, the average cost for each medically consulted injury stood at $42,000. However, this figure dramatically escalates to over $1.3 million in the unfortunate event of a fatality.
In addition to these direct costs, businesses must also account for potential regulatory penalties resulting from noncompliance with safety laws. In 2023, the U.S. Occupational Safety and Health Administration (OSHA) raised civil penalties for workplace safety violations by 7.7%. This hike means that companies face a fine of $15,625 per violation for serious and other-than-serious violations. The penalty significantly increases to $156,259 for willful or repeated violations.
In 2022, OSHA identified the most frequently violated standards in general industry, which included:
- Hazard communication (2,424 violations)
- Respiratory protection (2,185 violations)
- Lockout/tagout procedures (1,977 violations)
- Use of powered industrial trucks (1,749 violations)
- Machine guarding (1,370 violations)
These statistics underline the critical importance of adhering to workplace safety standards and regulations to avoid financial and human costs.
Hidden Costs of Workplace Safety Problems
Beyond the overt financial implications of safety incidents, numerous hidden costs often go unnoticed. These can drastically impact a company’s bottom line and operational efficiency.
Training Replacement Workers
When an experienced worker is injured, businesses often need to hire and train a replacement, which is a cost-intensive process. The expense of recruiting, onboarding, and training can quickly escalate and significantly affect the company’s resources.
Corrective Action Costs
Following a safety incident, companies must invest in corrective actions to prevent recurrence. This may include amending safety protocols, purchasing new equipment, or implementing additional training—all of which carry a cost.
Loss of Efficiency
The sudden loss of skilled workers and the resulting crew disruption can lead to inefficiencies in the workflow. New workers’ time to acclimate and reach peak productivity adds to these inefficiencies.
Equipment Repairs and Downtime
Workplace accidents often result in damaged machinery or equipment, necessitating repair or replacement. Moreover, the downtime resulting from such incidents can result in lost production time, negatively impacting the company’s output and delivery schedules.
Delivery Delays
Safety incidents can lead to unplanned work stoppages, resulting in late deliveries. These delays can affect the company’s reputation, compromise customer relationships, and even result in lost business opportunities.
Lower Morale and Higher Employee Turnover
Workplace accidents can drastically affect employee morale, especially if workers feel their safety is not a priority. This can lead to higher turnover rates, adding to the costs of recruitment, training, and lost productivity.
While the direct financial costs of workplace safety incidents are significant, the hidden costs are equally impactful. Therefore, businesses need to view safety as a regulatory requirement and a fundamental aspect of their operations and culture.
The Significance of Plant Floor Safety
A safe plant floor is a regulatory requirement and a vital asset to any manufacturing business. Ensuring the safety of the plant floor can mitigate the risks and costs related to workplace incidents, extend the lifespan of equipment, and foster a productive work environment.
Reasons to Invest in Plant Floor Safety
Investing in plant floor safety offers a variety of benefits, including:
- Reduction in Workplace Accidents: A safer plant floor means fewer accidents, less downtime, and lower costs related to medical expenses, compensation, and equipment repair or replacement.
- Improved Productivity: A well-maintained, safe plant floor reduces workflow disruption, promoting efficiency and productivity.
- Compliance with Regulations: Adherence to safety regulations helps prevent incidents and avoid noncompliance penalties.
- Boosted Morale: When employees see that their safety is a priority, it can improve morale, increase job satisfaction, and enhance loyalty, which in turn reduces turnover.
- Reduced Hidden Costs: By investing in safety, businesses can avoid the hidden costs associated with workplace accidents, such as training replacement workers or facing delivery delays.
- Proactive Risk Management: Regular safety inspections and preventative maintenance can identify potential risks before they evolve into costly incidents.
By recognizing the true cost of workplace safety, businesses can make informed decisions about investing in plant floor safety. Doing so creates a safer, more productive environment that positively impacts their bottom line.
Streamline Workplace Safety Using a Low-code Platform
Low-code platforms are versatile in promoting workplace safety, enabling businesses to streamline processes, enhance communication, and foster proactive risk management. By leveraging a low-code platform, companies can automate safety protocols, track incidents, and ensure a safer working environment.
Automation of Safety Protocols
Low-code platforms allow businesses to automate their safety protocols. Businesses can ensure regular compliance without requiring manual intervention by automating routine tasks like safety checks and equipment inspections. This reduces the burden on staff and decreases the risk of human error, enhancing overall safety.
Incident Tracking and Management
Low-code platforms can be utilized to create incident tracking and management systems. This allows businesses to promptly record, monitor, and respond to safety incidents. With the ability to generate real-time reports, businesses can gain insights into safety trends and implement corrective actions swiftly, mitigating the risk of repeat incidents.
Enhancing Communication and Training
With their ability to integrate seamlessly with other systems, low-code platforms can serve as central hubs for safety communication and training. Businesses can leverage these platforms to ensure all employees have access to updated safety protocols, training materials, and important notifications, fostering a safety-conscious culture.
Proactive Risk Management
Low-code platforms provide businesses with the tools for proactive risk management. These platforms can predict potential safety issues by analyzing data from incident reports and safety inspections before they escalate. This allows businesses to proactively address vulnerabilities and prevent accidents, further promoting plant floor safety.
By utilizing a low-code platform, businesses can bolster their commitment to workplace safety, minimize the likelihood of accidents, and significantly reduce direct and indirect costs associated with safety incidents.
Promote Workplace Safety with DATAMYTE
DATAMYTE is a quality management platform with low-code capabilities. Our Digital Clipboard is a low-code workflow automation software with a built-in checklist and smart form builder. This feature and its drag-and-drop interface allow you to create any checklist and form template you need—including those for safety protocols, equipment inspections, and incident tracking.
DATAMYTE also lets you conduct layered process audits, a systematic review of critical process steps. This auditing method focuses on the areas with the highest risk of failure or noncompliance. By conducting LPA using DATAMYTE, you can effectively identify and correct defects before they escalate.
With DATAMYTE, you have the perfect solution for creating a safer workplace. By automating safety protocols, tracking incidents, and fostering a culture of proactive risk management, DATAMYTE enables you to reduce the true cost of workplace safety while promoting operational excellence. Book a demo today to learn more.
Conclusion
In the fast-paced world of manufacturing, safety cannot be overlooked. Each investment made towards improving workplace safety translates into tangible benefits for both employees and the business. By understanding the true cost of safety, industries can effectively mitigate risks, foster a safer work environment, and enhance overall productivity.
