The Cost of Safety: What Gets  Measured Gets Managed

Jonathan Harper,

Business Development Manager

Strate Insurance Group, Inc.

Across the country, employers pay almost $1 billion per week for direct workers’ compensation costs alone. In fact, lost productivity from injuries and illnesses costs companies roughly $63 billion each year.

According to OSHA, workplaces that establish safety programs can reduce their injury and illness costs by 20 to 40 percent. Safe environments also improve employee morale, which positively impacts productivity on the manufacturing line.

Want to lower your costs? Start by measuring the impact of a safety program.

There are many approaches to measuring the cost of safety. Safety costs can be divided into two categories: direct and indirect costs.

Direct costs for safety can include safety wages, operational costs, insurance premiums, accidents and incidents, or fines and penalties.

Indirect costs go beyond those recorded on paper. They include accident investigation, repairing damaged machinery and line equipment, administrative expenses, worker stress, training and compensating replacement workers, and even a company’s tarnished reputation because of safety accidents.

Just the act of measuring costs will drive improvement. In theory, those providing the data become more aware of the costs and begin managing them. This supports the common business belief that what gets measured gets managed. And, as costs go down, what gets rewarded gets repeated.

OSHA studies indicate that for every $1 invested in effective safety programs, you can save $4 to $6 as illnesses, injuries and fatalities decline. With a good safety program in place, your costs will naturally decrease. I am committed to helping you establish a strong safety, health and environmental program that protects both your workers and your bottom line.