How much does an injured employee cost your company?  Many different models and formulas have been used in an effort to help one determine the true cost of an occupational injury.  One fact that must be immediately addressed is that there are "Direct & Indirect" costs associated with occupational injuries.  To say that the cost to our company is just the cost of the worker comp claim is short sighted to say the least.

Recently OSHA has come out with a basic formula to help folks get a handle on estimating the TOTAL COST to a company for an occupational injury.  The total cost (TC) is generated from adding the Direct Cost (DC) with the Indirect Cost (IDC).  The IDC are costs such as the hiring of temporary employees, new training expenses & work slow downs or spoilage to name just a few.

Once you have obtained the TC you really have only half the answer.  To determine the true impact in financial terms, one must also calculate the Profit Margin and relate this to the TC.  In making this relationship, you will be able to numerically see the impact that an injured employee has to the bottom line of your company.  The true cost to your firm will vary but this formula will at least get you started.  Understanding this formula is often the key to successfully negotiating increased funding for you health & safety programs.

CLICK HERE to find the worksheet for finding your Ergonomic Economics!

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