It’s no surprise to industrial workplace managers that employee injuries have a direct impact on the health of your business, your employees—and your bottom line. But beyond the immediate physical consequences and direct cost of care, there are strong downstream effects on project timelines, productivity, employee well-being and the overall financial health of your business. Even with general awareness, many organizations don’t know the true costs of these effects associated with the mismanagement of workplace injuries. That’s why it’s vital to not only have an effective way to prevent injuries and mitigate risk but also to treat them prudently when they occur.
How employee injuries affect your timelines and productivity
According to the National Safety Council, employees missed 103,000,000 days of work due to workplace injuries in 2021 alone—for an estimated $47.4 billion in lost productivity and wages. Do you know how much of that came from your workplace? Getting a handle on the number of days missed due to worker injuries is a start; but it’s also important to identify and understand the costs associated with missed deadlines and pushed project timelines. What’s more, many organizations will face an opportunity cost associated with injured workers, as they may be unable to take on additional jobs due to reduced resources. The strain on the remaining team members to compensate for the injured employee’s absence can lead to burnout and decreased morale, further dampening productivity.
How workplace injuries affect your Experience Modification Rating (EMR) and Workers’ Compensation premiums
EMR is a metric used by insurance companies to assess a company’s historical workplace safety performance—almost like a credit score but for the safety of your workplace. For businesses with premiums of at least $5,000 per year, a low EMR can help significantly reduce annual workers’ comp insurance premiums. EMR calculations can be complicated and involve several different factors—including NCCI classification code rates, expected losses and industry averages.
Bottom line—injuries resulting in workers’ compensation payouts are sure to increase your EMR (and subsequently, your insurance premiums)—if not immediately, over time. In fact, insurance experts say that even an increase in your EMR of just .2 (i.e. from a score of 1 to 1.2) will inflate your premiums by as much as 20% per year!
How workplace injuries affect employee retention and well-being
One of the biggest issues affecting industrial employers of all kinds (from construction to logistics and beyond) is the skilled labor shortage. Organizations that don’t figure out how to recruit and retain top employees will suffer—or fail completely. The financial impacts of this are obvious, but most employers don’t realize that workplace safety—or a perceived lack thereof—can impact morale, productivity and retention.
According to the International Risk Management Institute, companies with “appropriate, active, and visible safety leadership, generally tend to have fewer accidents, injuries, and losses.” In turn, those workplaces are likely to be rated higher as “preferred places to work” with greater job satisfaction. It goes without saying that serious injuries and fatalities on a job site can significantly impact the mental and emotional well-being of whole teams of workers, resulting in additional lost time and resources.
How workplace injuries affect your OSHA Rating (TRIR)
Your Total Recordable Incident Rate (TRIR) can have a significant impact on your bottom line in ways you might not be able to predict. When TRIRs get too high (usually above just 2-3 cases per 100 employees), you’re inviting OSHA crackdowns. The financial impact of these inspections and penalties can be hard to foresee, so it’s best to avoid it as much as possible. Furthermore, TRIR ratings can tarnish your company’s reputation, risking business deals with clients and partners and making it harder to hire.
How to reduce the cost of workplace injuries
All in all, workplace injuries have far-reaching consequences—sometimes impacting the financial health of your business even years later. By prioritizing workplace safety and correctly managing workplace injuries, companies can mitigate the ripple effects.
An additional important factor in mitigating costs to not overlook is your healthcare provider. Industrial healthcare providers can unfortunately develop a reputation for prioritizing excessive care and treating injuries in ways that create unnecessary recordable incidents. When making your choice, make sure to choose a provider that you trust, not only to take care of your employees appropriately but also to ensure proper management of all injury cases to avoid over-care and recordable incidents that negatively impact your bottom line.
When it comes to the health of your business and your employees, you can count on On Site Medical to help! With on-demand, on-site care; dedicated job-site clinics; and off-site urgent care clinics, our team guarantees to reduce the impact of workplace injuries, so your employees stay healthier – while mitigating costs and liability for your business. Enroll today!