True Cost of a Health & Safety Incident at Work

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True Cost of a Health & Safety Incident at Work

Cost Risk Benefit

Estimates by the HSA in Ireland suggest that 18,796 people experienced work injuries requiring an absence from work of four or more days in 2014.

There are a couple of startling things to take from that figure:

  1. With an average annual wage of €36,919 in 2016 according to the CSO, the average labour cost alone for the four days (assuming they were paid when they were out) was in the region of €700 per employee.
  2. Now 18,796 people is roughly 10% of the workforce so an SME with 200 employees would typically have 20 people out per annum for four or more days which equates to a worryingly €14,000.
  3. Typically, the number of people that took between 1 and 3 days off as a result of an injury also stands at 10% so it would be safe to put a cost of €6,000 on that category.
  4. So therefore we conclude that the average SME employing 200 people has a direct annual labour cost of €20,000 associated with work related incidents.
  5. In 2015, Ireland lost 250,000 work days so I would say that the €20,000 cost is real enough.

Trying to put a cost on the loss of productivity and you could certainly multiply that €20,000 by a number of factors.

Now most incidents are covered by insurance but certainly that affects premiums. Depending on the nature and size of your business it could also easily add another couple of thousand onto the bottom line.

Now let’s talk about mental wellness, most of which also require some days off but few are rarely reported to the HSA as they aren’t seen as incidents as such.

At this stage, we are running into the tens of thousands and while statistics are quite poor from Ireland, there are some interesting stats in the UK that will definitely have some correlation.

The Health and Safety Executive (HSE) in the UK carried out studies in an attempt to calculate the true costs of accidents. They looked at companies where there were no fatal injuries, no prosecutions nor any significant civil proceedings. Even for me the results were surprising. One transport company found that accidents amounted to 37% of its annual profits. A construction site costs amounted to 9.5% of the tender price of the project being undertaken, and in a third organisation, accident losses amounted to 5% of running costs

Female workers typically have lower injury rates than male workers which wouldn’t surprise many. What is interesting is that they have a higher rate of lost days due to illness! You can speculate on that yourself if you dare!

A figure that may surprise many comes from the non irish national workforce. Non-Irish national workers comprised 14.8% of the Irish workforce in 2014. In 2015, 17% of nonfatal injuries notified to the HSA involved non-Irish national workers so really, they are no more or less likely to be involved in an accident at work.

It would appear therefore that the disproportionate number of claims by non irish nationals comes from those who don’t work rather than those that do!

There were 56 work-related fatalities reported to the HSA in 2015. What cost can you put on the loss of a colleague and friend not alone the cost of demotivation and loss of productivity.

Bringing out the impact of potential losses can sometimes influence the attitudes of those who may be reluctant to spend money to make health and safety improvements. The aim is to stop these losses by building health and safety management systems and a strong “culture” into everyday business practices. It is important that underlying causes of accidents are tackled rather than acting after things have gone wrong.

Dulann is a provider of technology-enabled learning solutions for many of the world’s leading organisations. Services include Product & Process Simulations, Contractor Inductions & Employee Onboarding, Mandatory & Commercial Training, Contractor Management & Learning Management Systems.

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About Damian Donlon.

Damian is a Non Executive, Senior Consultant, Interim Manager and Talent Adviser with specialist experience in the Construction & Technology sectors. Please feel free to contact him directly on 0879218616 for a confidential conversation.