According to the Occupational Safety and Health Administration (OSHA), workplaces that establish safety programs can impact the bottom line by reducing injury and illness costs by 20 to 40%. When it comes to the costs associated with safety, consider that employers pay almost $1 billion per week for direct workers’ compensation costs alone and that lost productivity from injuries and illnesses costs companies roughly $63 billion each year.
Since measuring can be time consuming, general cost formulas are sometimes used. A Stanford study conducted by Levitt and Samuelson places safety costs at 2.5% of overall costs, and a study published by the Economist Intelligence Unit (EIU) estimates general safety costs at about 8% of payroll.
For measuring data, safety costs can be divided into two categories, direct and indirect. When calculating soft costs, minor accident costs are about four times greater than direct costs, and serious accidents about 10 to 15 times greater, especially if the accident generates OSHA fines or litigation costs.
OSHA studies indicate that for every $1 invested in effective safety programs, you can save $4 to $6 as illnesses, injuries and fatalities decline.
Considering these statistics, safety experts believe that there is direct correlation between safety and a company’s profit. The Flanders Group is committed to helping you establish a strong safety, health and environmental program that protects your workers and your bottom line. Contact us today at (585) 381-8070 to learn more about our services.