What is the cost of workplace accidents to your business?

What is the cost of workplace accidents to your business?

Health and safety can be seen as an ever-changing risk for businesses, because many businesses don’t understand the impact of violating the standards. While many businesses understand the impact of a large fine, it is perhaps less understood that good health and safety process management can offer businesses a return on investment.

Evidence suggests that businesses can expect to spend $4 in indirect costs for every $1 in fines. For a business facing a $15,625 fine, this means that the real overall costs could spiral upwards to $78,125. This could put many businesses in significant risk of collapse.

So, what do the indirect costs of workplace accidents look like? A few examples of the costs to business are:

• Insurance premiums increase
• Compensation claims
• Lost productivity and employee morale
• Recruitment for replacing temporary or permanent employees
• Accident investigation
• Damaged property
• Tarnished reputation
• An employee perspective on workplace accidents

When we consider the impact of health and safety failures on employees, we have to start with the prospect of an employee getting injured whilst at work. In the US, in 2021 alone, there were 4.26 million work-related injuries that required medical consultation, and 4,472 preventable injury related deaths. Specifically, for retail there were over 500,000 injuries requiring medical consultation. If employees in unsafe working environments are injured or worse, the human costs are incalculable on an individual level.

In addition, there are the costs associated with replacing the injured person on a temporary or permanent basis. The workload of the injured person must be shared amongst their colleagues. In the short term, for an injury lasting less than a week, this could be manageable but stressful for the remaining employees. For on-going absence, it is necessary to recruit replacements. However, it can be difficult to recruit if the company has a reputation for health and safety failures, and workplace accidents. This is often perceived as an indicator that employees are not valued. This leaves roles open which is an on-going cost and burden to the recruitment process.

When businesses hire new employees, they allocate resources, both time and money, to train them. However, this training is often delivered by in-store colleagues who may not have a comprehensive understanding of OSHA violations. As a result, the training may not be delivered in full or may not be fully comprehended by the new recruits. This can lead to more health and safety issues and add to the pressure felt by employees to complete their duties.

A customer experience perspective

Customers will experience the effect of workplace accidents and sub-standard health and safety, low employee morale, and insufficient team members if the store is not properly managed. The impact of their experience then impacts their loyalty to the store and chain.

A store with less employees trying to cover more tasks will inevitably lead to some crucial tasks being missed. This could be empty shelves as the employees have not had time to restock, it could be long wait times at the checkout due to a lack of available cashiers, or it could be encountering a stressed employee and not having a good experience in store. These issues are all linked to the employees the business is placing on the frontline, and they can leave customers feeling frustrated and taking their custom elsewhere.

How can businesses take the lead and change these perspectives?

The reality is that the negative impact of workplace accidents on both employees and customers is challenging to overcome once it has happened, much like the health and safety issues that brought them about in the first place. Having a serious OSHA violation on record leads to a chain of stores vulnerable to inspections at other premises.

Investing in health and safety can help businesses demonstrate that they are taking the consequences of failures seriously, and that they want their business to flourish, their employees to thrive and their customers to feel welcomed and satisfied on every visit.

Investing in injury prevention makes workplaces safer and returns on average $2 for every $1 spent. The return from this investment pays dividends not just to shareholders, but to:

• OSHA – demonstrating that violations are being taken seriously. Implementing a health & safety management system shows businesses are investing in better standards
• Employees – a safer workplace will help employees to feel valued, boosting morale and reducing absenteeism and high turnover
• Customers – a commitment to a safer store, happier employees and a demonstration of meeting OSHA standards can help customers to feel safer and have a more enjoyable experience in-store