Friday, June 29, 2018

Why Effective Safety Management Can Protect Your Bottom Line

Construction, Worker, Construction Workers

By Catherine Metcalf

When you run a business, it’s important to control expenses so that you can remain profitable. However, unexpected costs can arise that throw off the balance. Employee injuries can be one of the most disruptive things that happen to a company.

According to one work injury lawyer in Philadelphia, “When an employee suffers an injury at work, the employer’s workers compensation coverage will pay benefits to the injured employee.” However, the initial payout is only the beginning of financial effects that can be felt from this type of injury. Having an effective safety management system in place can help you to maintain your bottom line and keep you in business.

Increased Premiums

In many states, workers compensation insurance is mandatory for businesses with more than one employee. This insurance covers employees for rehabilitation, costly medical expenses, and wages lost as a result of a work-related incident.

However, companies pay premiums based on their safety history. The more injuries on the job, the higher your premium will be.

The cost of worker injuries is no small matter. Studies estimated that the direct cost to companies was anywhere from $58 to $74 billion in 2009. With an effective safety system in place, you can cut down on these high expense injuries.

Unexpected Payroll

Beyond these direct costs, unexpected or hidden costs can be even more costly to businesses. Indirect costs can be two times higher than direct costs.

The largest impact is felt in payroll. After an employee is injured on the job, chances are that you’ll have to hire someone new to replace them for the time being. This means spending money on training the new hire.

Additionally, overtime must be paid to help cover the gap in productivity. Managers’ attentions will be directed towards admin tasks that relate to the accident, causing even more expenses to add up.

Pause in Productivity

When someone is injured on the job, work comes to a standstill. Investigations must be run and efforts must be taken to prevent the same injury from happening again. In the case of damaged equipment or tools, costly repairs must be done or replacements brought in. All of this has to happen before work can start again.

This major delay can affect scheduling and the timeline of the project, as well as the ability of your team to complete the project within the expected timeframe. Productivity is often affected as workers can be fixated on the injury that took place.

The Unseen Advantages of Safety Management

Effective safety management can help your business avoid these costly pitfalls. A good strategy can boost employee morale as they feel your company cares about their safety and wellbeing. This helps to increase productivity and will also help to attract other workers to your company. Businesses with a safety-conscious reputation are looked at as good employers.

Additionally, clients will feel more confident in companies that pay attention to their employee’s safety. Emphasizing safety will strengthen your company's standing in the eyes of the community, and generate good feelings towards your brand. This will all help to increase client confidence.

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