Four Indirect Costs of Workplace Injuries

By Alana Smart / July 26, 2022 / Blog ,

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Four Indirect Costs of Workplace Injuries

The Occupational Safety and Health Administration estimates that employers pay almost $1 billion per week for direct workers’ compensation costs alone. While that estimate may trigger some alarms for employers, it is only the tip of the occupational safety iceberg. Under the surface, many other workplace injury related costs are lurking, which can lead to unexpected expenses after an employee accident. While many employers’ insurance plans cover direct costs like medical expenses and workers’ compensation payments, indirect costs of workplace injuries like the following come out of a company’s profits.

Cost to cover the injured employee

When an employee is injured and is going to be out for an extended period of time, someone needs to step in to fill the role. If a new team member is hired, the process of hiring and training can be lengthy and expensive. New employees will have a learning curve, which is natural, but productivity may be lower than with a seasoned employee. If an existing coworker steps in to take over the responsibilities than employers will potentially have to pay out overtime to ensure the same amount of work is being done.


Cost of administrative tasks

After an employee is injured, there is undoubtedly paperwork that needs to be handled. Depending on the state that the company is located in, various documents need to be completed such as accident investigation reports, wage statements, and reports of injury. Investigating the accident, writing reports, filing claims, and following up to implement corrective measures takes time. This can take away from the day-to-day dealings of running a business. If any equipment was damaged during the workplace incident, it will need to be repaired or replaced. Additionally, depending on the nature of the incident, training may need to occur for the entire staff, as to avoid similar situations in the future. All of which can be costly and time consuming.


Cost of disruption in the workplace

Other employees are also affected by workplace incidents. When the injury or accident is occurring, employees may go to assist their coworker, get the attention of supervisors, or help clean up damage from the incident. If they witnessed the accident or were involved, they may have to step away to file a witness report. Depending on the severity of the incident, and the nature of the business, work may have to pause for a few hours or days. After the incident, other employees may have to disrupt their normal routine to cover the absent employee or attend trainings.


Cost of injury for other employees

Following a workplace injury, other employees may experience low morale and feelings of uneasiness about their own safety or risk of being injured. For those who witnessed the incident, they may be dealing with guilt, and struggling with residual trauma. Also, if employees are stepping in to cover the absent employee’s responsibilities, they may feel resentful about having to take on more work, and exhausted by the workload which could make them easily distracted, and less productive.


How to mitigate indirect costs of workplace injuries

There is no way to prevent all injuries and incidents in the workplace, but there are steps that can be taken to try to decrease the chances of them happening. Focusing on workplace safety through safety audits and site inspections is a great first step to ensure that hazards are not present and identify potential risks. Involving employees in workplace trainings helps employees to familiarize themselves with risks, learn how to identify hazards, and gives them a stake in creating a safer work environment. Additionally, medical testing such as fit for duty testing, physical exams, and physical ability tests can be a beneficial measure to identify if employees have an underlying health condition that could predispose them to injury. These tests can be performed as a baseline or to monitor an employee's condition over time, and gives employees the opportunity to seek treatment, lifestyle changes, and safety accommodations.


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