If there is an accident in your workplace, it can result in damaged products, hospitalization costs, and perhaps some lost productivity while the aftermath is cleaned up. But once everybody is back to work, that’s the end of it, right?
Wrong! The truth is that even a single workplace accident can cost businesses an astronomical amount of money. And the costs can keep on piling up for months or even years after the actual accident has been forgotten.
When an accident occurs, business as usual typically stops — at least temporarily. But this momentary pause in productivity can cause timeframes to be thrown off schedule, deadlines to be missed, and customers left without the products or services they are expecting.
If there is an injury that requires recovery time, the business can be left shorthanded, affecting productivity even further. Completion of projects may be delayed.
Maintenance and Equipment Costs
A direct result of a workplace accident is damage to equipment or the physical property of the business. The cost of repairing or replacing damaged or destroyed property can be high.
There can even be long-term bookkeeping consequences. If a particular piece of equipment such as a forklift, conveyor system, or other big ticket item has to be replaced, the accrual of that property has to start all over from scratch. That not only will affect the business’s annual operating budget for the current year but for many years to come, not to mention the potential tax implications of lost depreciation of the damaged equipment.
In many instances, a person injured in an accident may sue the business, which can result in high legal expenses. Attorneys fees, court costs, and settlements can cost huge amounts of money. And even if the business successfully defends itself against the lawsuit, the company’s legal expenses will likely go up, along with its insurance premiums.
At the very least, the company may have to pay an injured employee’s salary during their recuperation. And because the worker is not adding anything to productivity, that expense comes right out of the bottom line.
Reducing Costs by Reducing Accidents
All of these costs can be avoided altogether if the workplace accident never occurs. Implementing workplace safety programs, employee training, and careful supervision can eliminate dangers and reduce accidents.
While these measures may require a little upfront investment on the part of ownership, it can be a drop in the bucket compared to the long-term costs of a single workplace accident.