Return On Investment (ROI) Of An Effective Safety Management System
Employers, especially those in high-risk industries, hear a lot about the importance of workplace safety. OSHA safety precautions are in place to help guide them in creating processes to keep workers safe from common dangers on the job. However, despite even the most vigilant employer’s best efforts, workers are injured on the job. In virtually every industry, workplace injuries and illnesses occur on a daily basis. When occupational injuries and death are looked at annually, on a national level, the cost is staggering.
The solution is simple: investing in an effective safety management system.
Why Do You Need A Safety Management System?
The short answer is, to protect the lives of your workers. However, in the business world, investment costs associated with implementing safety measures and a company must be able to justify money spent with a positive ROI. Even if you desire to do everything in your power to protect your employees, the hard truth is that resources will dictate the level of safety you provide. Even so, various studies have shown that just $1 invested in injury prevention returns between $2 and $6 – that’s bottom line profit from money that is not being spent on administrative costs, insurance, healthcare and lost wages due to workplace injuries
How Much Do Workplace Injuries And Death Cost?
That $2-$6 return doesn’t seem like much until you look at the big picture and start adding it up.
According to the National Safety Council’s “Security Facts” report in 2014, the total cost to society for all occupational injuries and deaths in 2012 was $198.2 billion. This breaks down to:
- $36.5 billion in administrative expenses
- $55.7 billion in medical costs
- $89.6 billion in wage and productivity losses
- $11 billion in employers’ uninsured costs
- $3.2 billion in fire losses
- $2.2 billion in vehicle damages
When you use this to calculate the injury impact per worker, every worker in the US must produce an additional $1,400 in goods or services each year to offset the cost of workplace injuries and death.
While the cost of different types of injuries varies drastically, the average cost per medically consulted injury is $39,000, and the average cost of each death is $1.4 million.
The ROI Of A Safety Management System
If we assumed a very conservative estimate that 1,000 companies nationwide invested an extra $5,000 each in safety management systems, according to the ROI above, it could save them each anywhere from $10,000-$30,000 in accident-related costs. On a national level, it could save society anywhere from $10 million – $30 million. If more companies invested in better safety management, it is possible to significantly decrease the number of occupational injuries and deaths and the financial impact to society.
Optimum Safety Management Can Create Or Improve Your Safety Management Systems
As an OSHA safety management firm, Optimum Safety Management can conduct a safety assessment of your workplace and make recommendations based on OSHA safety precautions and guidelines for your industry. With the goal of reducing workplace injuries, illnesses and deaths, we will identify risks and present you with plans to mitigate them. Once you have a system in place, we will help with implementation, employee training, and required OSHA reporting to ensure both safety and compliance.
Get started with your initial consultation by contacting Optimum Safety Management at 630-759-9908 today.