FEATURE
staff recruitment, training and salary costs, possible compensation pay-outs or lawsuits and the avalanche of legal and administrative documentation that needs addressing.
A report by Oxford Economics estimates average costs of over £30,000 to replace a member of staff, made up mostly from the cost of lost output while a new employee ‘learns the ropes’ and the logistical costs of recruiting and absorbing a new worker.
Other estimates of staff turnover costs place a percentage of their annual salaries as the real costs of re-hiring, with mid-level employees earning over £30,000 per year costing about 150% of their annual earnings to replace.
In a world where business owners are responsible for the welfare and safety of their staff, the knock-on costs of an accident can be astronomical – and that is before the often even more costly secondary factors are considered.
SECOND WAVE There is a related line-up of other less tangible expenses that have the potential to endure even longer.
Take the company’s reputation and credibility. No business wants to get involved in massaging the PR fallout of a workplace accident. No business wants to deal with the messy business of a damaged reputation. But more importantly, no potential client would want to do business with a company if they thought that company was lax in its operating procedures. After all, a company with a reduced capacity to operate, or a company being dragged through court, or a company with failures in its health and safety practice is a company with potential to underachieve for clients.
In business, ‘mud sticks’ is a truism. Rumours of a bad reputation can spread extremely quickly. Existing customers may be placated, particularly if they have had previous good service, but new customers may become much more difficult to find – and as all businesses know, new customers are the lifeblood of successful companies.
On top of this, insurance premiums are likely to suffer after an accident. Any no claims bonus will be forfeited, but compulsory insurance,
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such as Employer Liability, could rise. Even those employers with solid insurance may discover the accident is not fully covered.
Any uninsured costs will come directly from a company’s ‘bottom- line’ profit and, in some cases, there may even be difficulty in obtaining future insurance cover.
an increase in cases of anxiety and depression when compared to a control group, disturbed sleep, frustration and anxiety about the future – even detrimental changes in the behaviour of associated children.
Indeed, workplace accidents can impact on family life, as well as attribute to social isolation and economic problems. It is difficult to fully gauge the residual psychological effects on other members of staff who were witness to, although not directly connected to, the accident.
In the cold light of business, these factors contribute to reduced productivity and increased costs over an indefinite period of time.
EMPLOYERS SUFFERING An overlooked factor of workplace accidents is the effect on employers. While few will have sympathy with a business owner who has deliberately overlooked health and safety best practice, there are still business owners with good intentions who have simply failed, through poor planning or bad advice, to implement suitable safety practices – and while excuses are no excuse, particularly where an injured employee is concerned – the aftermath of an accident on the wellbeing of employers can be extremely negative.
PSYCHOLOGICAL FALLOUT Other effects can be hard to quantify, but there is growing evidence of the negative psychological and behavioural consequences that follow the aftermath of a serious incident. Consequences which keep workers absent for longer periods, or contribute to reduced performance at work.
The Health and Safety Authority of Ireland noted ‘serious work-related accidents and illness can have a widespread impact on individuals and their families’ and that ‘many will find their working life is significantly affected.’
The psychological and behavioural consequences can include PTSD,
Managing directors have the stress of dealing with the immediate accident situation while also trying to maintain the business and other responsibilities to employees. They may need to facilitate access for the HSE or other authorities and it is likely there will be very stressful legal implications, from compensation claims to fines to liability and court costs.
Except in far flung corners, most employers today understand the benefits of good health and safety practice, but not every employer understands the real implications of a workplace accident. Hindsight might be a wonderful thing – but for businesses who neglect or ignore health and safety, it can also be filled with regret.
And in health and safety terms, the only way to live without regret is to put accident prevention and protection at the heart of a facility.
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