We all know that safety is important, but do you realize just how costly a workplace injury can be? When all is said and done, injuries can cost business owners hundreds of thousands of dollars. The extra expense to pay for injuries has a powerfully negative effect to a company’s bottom line.
Why is profitability also an important issue to you? The only way that can stay in business is to operate at a profit, and that ability can be threatened by a serious workplace injury.
The Real Cost of Workplace Injuries
It may be surprising to hear that most companies do not have a high profit margin—8 percent is about average. Expenses take a large chunk of the income, and competition limits how much we charge for the products we sell.
Each time an accident occurs, the cost of the injury must be subtracted from profits. Consider the following two examples:
At a 5 percent profit margin, an extra $20,000 in sales is needed to compensate for a $1,000 injury.
If the profit margin is nearer to 1 percent, an additional $100,000 worth of new income is necessary to maintain that profit level for the same injury.
As you can see, that adds up to a lot of extra sales just to compensate for a single injury. And we all know that we can’t just find more customers because we need the extra income. Thus, every time a worker gets hurt on the job, other employees are affected too. The company may be forced to make difficult budget decisions such as cutting hours or jobs, plus some employees will need to work extra hours to make up for the injured employee’s lost time.
Also, recovering from an injury can mean time away from work, reduced compensation, painful rehabilitation and frustrating adjustments to daily life.
Though operating at a profit is essential to our success, our top priority is to keep our employees safe and healthy. That’s why we are counting on you to help practice good safety principles, including following safety protocols, even if they seem unnecessary or slow you down. Safe work behavior will contribute directly to our bottom line as well as to everyone’s job security. By observing safety precautions, we can limit on-the-job accidents.
It is always wiser to spend a bit more time doing the job safely than to risk getting a serious injury. Be sure to always follow our safety guidelines and stay alert for unsafe conditions. Think of practicing good safety as both pain-free and profitable—a win-win situation for everyone!
Contact E.B. Cohen to learn more.