What are the costs to employers?
Research from WorkCover Corporation demonstrates that the indirect costs of workplace injury can be estimated to be 5-10 times greater than the direct costs. These indirect costs to employers include increased insurance premiums, lost productivity, driver replacement and training, overtime, damage to vehicle and load or loss of contract/penalties for late delivery.
Let’s examine the costs in Example 1
Direct Costs
Medical = $1,600.00
Salary = $17,000.00
TOTAL $ 18,600
Indirect Costs
Investigation costs
Supervisor Investigation time $20.00
Complete paper work - Manager and OHSW coordinator $120.00
Treatment
First Aid treatment
Time of other employees who assisted injured driver
Transport to Clinic $70.00
Administration
Office Staff $150.00
Replacement driver
Time for induction and additional supervision $125.00
Overtime to make up lost deliveries $60.00
Wages/On-costs $17,000.00
Purchase
(drum handling device) $200. 00
TOTAL $ 17,745
GRAND TOTAL $ 26,345
How do you calculate the real costs of these kinds of injuries?
This $18,000 direct cost injury claim could cost as much as another $18,000 in indirect costs and put your company into a significant penalty on your WorkCover premiums of up to 50 per cent in the following year. Note that if there was damage to the vehicle, freight, other vehicles or members of the public then as the research demonstrates, the indirect costs could be at least $90,000.
If your company operates on a 5 per cent profit margin, then you would need approximately $360,000 in turnover just to recover the indirect losses of this one claim. Imagine what the impact would be on your organisation if you had more than one of these high cost claims every year.
A set of lightweight steps that prevents a fall or a trolley to help shift freight may cost several hundred dollars, but if it saves you just one injury, then clearly you are ahead. How much more competitive would you be if you could prevent these kinds of injuries?
(Excerpt from ‘Effects of Unsafe Handling of Freight’, Road Freight Transport Industry INFORMATION)
