Cost of Accidents
The HSE calculate the national average cost of a 7 day lost time incident at £4,800 and major injuries at £1,200 for an organisation that has one or two RIDDORS each year the cost of incidents can be high. When you add in other costs such as claims, fines, lost business, effect on reputation, lower/lost production, higher staff turnover and higher insurance premiums the costs can spiral.
As a business owner, senior manager or QHSE professional you should know how much incidents cost you. You are missing a big opportunity if you don't.
What should you measure?
As a starter you should measure the direct costs that are easy to quantify. For example you may choose to track costs of one or some of the following:
Lost time hours
Agency staff to cover absence
Occupational Health Fees
Cost of any claim
Cost of any fines
Costs such as staff morale, its impact on productivity and impact to reputation are examples of indirect costs. Trying to objective identify the cost of these relatively indirect and intangible amounts can be very difficult but it is good to have an understanding that they exist.
Data is Power
We are not recording just for the sake of doing so. Recording costs of incidents helps you in a couple of ways.
Firstly, it enables you to quantify whether implementing a safety control or spending money to make improvements is justifiable. Understanding what it is costing you not having the control suddenly makes it easier to reconcile the cost of a proposed control measure.
Secondly, it is hard to know whether your controls have been effective. By recording such data you can see not only whether the number of incidents have been reduced implementing a control measure but also the direct cost benefit.
Finally, it allows you to set targets and KPI’s which will help you keep track of your performance. Measuring cost of incidents is a great way of motivating your management team and budget holders.