Impact of workplace injury on your business

Impact of workplace injury

Impact of workplace injury explains how workplace injury can negatively affect your business.

There is a cost associated with every workplace injury, both visible and invisible cost, this is why every reasonable business owners strives to prevent injury in their workplace as much as possible.

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Visible cost includes payments of accident compensation, payment of hospital bills, payment of burial rights, replacement of damaged materials/equipment, re-building destroyed structures, etc.

Invisible cost includes:

  • Time lost from work by injured employee(s)
  • Loss in earning power
  • Loss of production
  • Failure to fill orders
  • Economic loss to injured worker’s family
  • Lost time by fellow employees
  • Loss of efficiency due to break-up of crew
  • Lost time by supervision
  • Time lost for replacing damaged equipment
  • Spoiled work
  • Overhead cost (while work was disrupted)
  • Cost of training a new worker
  • Increase in workers’ compensation premium

From the cost of accident enumerated above, it is obvious that invisible cost is more than the visible cost.

However, both visible and invisible cost can be converted into monetary value.

Read Also: Workers compensation and how does it works

Lets see how these different cost of injury could affect your business:

Here some negative impact of workplace injury to any organization

  • Sanctions: The organization with high injury rate may face sanctions from regulatory agencies. These may result to payment of huge amount for fines or loss of practicing right.
  • Will make the organization to lose money: The organization will lose money on both visible and invisible cost.
  • They company will have excessive workers turnover: The organization will need to employ new workers as replacement for injured workers or for workers who leave the organization due to poor safety structure.
  • Loss of competitive advantage: The organization will lose competitive advantage when bidding for contract due to their poor safety structure and probably high accident rate. This will make it difficult for companies with high injury rate to win contracts.
  • Low workers moral: Rampant accident and injury in the workplace will result to low moral among workers which will directly affect productivity.
  • Inability to meet deadlines: Injury to a worker(s) can prevent the organization to meet deadlines set by client; this will affect the ability of the organization to get another contract from the client.
  • Poor social image: The organization will have poor social image because of high injury rate. I know of a particular company heavy equipment drivers being referred to as hired killers by the public.
  • Inability to acquire competent hands: Competent workers will prefer to work for organization with a good safety track record than organizations with poor safety track records. They need where their safety will be guaranteed.
  • High insurance premium: Organization with high injury rate will have to battle with high insurance premium from insurance companies.
  • Bankruptcy: In conclusion, any organization that records high injury can easily go bankrupt. When the organization is paying fines, attending to both visible and invisible cost, inability to acquire competent workers due to inability to meet deadlines, lack of competent workers, etc, they will be gradually tilting to bankruptcy, until they get bankrupt.

The impact of workplace injury cannot be over-emphasized. Workplace injury is detrimental to any organization, no matter the perspective considered.

The best option is to do everything possible to prevent accident.

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All organization need a good health and safety management system to help them manage all workplace hazards and risks to prevent injury.



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