What are work site injuries costing your company? Way more than you may think! If you look at the bigger picture, a single debilitating work site accident could cost your firm millions in profits. A new white paper from Staples Facility Solutions explores this topic in detail. It includes a spreadsheet that shows how the average company can take a huge hit in terms of profits because of the cumulative costs of debilitating workplace injuries. The figures it presents are very general - not for any specific industry. So, of course, we had to dig deeper to determine how the industries we serve - mining and construction - compare with their estimates. What's intriguing is that Staples doesn't just consider the direct and indirect costs of injuries as their total economic impact. Instead, it assumes that the firm must get the money to pay for the cost of injuries from somewhere. It can do this either by cutting costs or increasing revenue via sales. This intriguing report looks at the latter option. The bottom line? In either mining or construction, it takes an average of $5.4 million in additional revenue to offset the cost of a single debilitating workplace injury.
Developing a model for the mining and construction industries
In the course of our research into injury statistics for the mining and construction industry, we discovered OSHA's $afety Pays online calculator, which enabled us to adjust our assumptions to being them more into line with the agency's data. This makes our industry-specific model much closer to real-world data for mining and construction. Our assumptions and the sources for the data we used follow in the footnotes after the spreadsheet.
Footnotes
This spreadsheet is based on calculations from the Staples Facility Solutions whitepaper, Putting Employee Safety First Can Improve Your Bottom Line.
The cost of disabling workplace injuries comes from National Safety Council 2011 statistics.
Injury statistics come from the BLS 2011 Workplace Injuries & Illnesses report. Yes, the incident rate per 100 workers is identical for mining and construction. This is not a typographical error.
The source for the company profit margin is the average performance of the S&P 500 for the last 15 years.
The indirect cost multiplier is taken from an OSHA online calculator. The actual multiplier will vary based upon the severity of the injuries.