The cost of injuries can be viewed in several ways. Of course, there are also the human and emotional costs. You cannot measure these in dollars and cents.
However, the cost to your operation can be calculated in dollars and cents.
In the calculator, input your business margin. Then, put in any out of pocket costs incurred for an injury. Think about overtime to cover an injured employee, time for the investigation and an OSHA fine plus attorney’s fees. You can also put in your annual Workers’ Compensation premium or increases in this premium.
The result shows the amount of sales needed to make up for the cost of an injury and or the compensation costs. It pays to do the prevention rather than to react as you go along.
Here is an example.
Lets say that you have had an increase in Workers’ Compensation and overtime to cover injured employees. The company out of pocket cost is $30,000 and your company has a 15% business margin. When that $30,000 is divided by 15%, the amount of sales needed to just RECOUP the cost of the overtime and increase in Workers’ Compensation is $200,000. That $200,000 is the amount of sales needed to recoup the cost of the overtime and increase in Worker’s Compensation. You could just forgo the increase in Workers’ Compensation and overtime costs ($30,000), or raise your prices, neither of which is a good thing to do.
Try out the calculator for your own company below.