The Business Case
Implementing proven Behavioral Safety processes in your company can dramatically reduce the number of lost-time and minor injuries and their associated costs which detract from your bottom-line.
The costs of workplace injuries are considerable: For example, in 2004, OSHA estimated the direct costs of a lost-time injury to be $28,000. Indirect costs are usually estimated to be 10 times the direct costs. This means just one Lost-time injury is estimated to cost some $308,000, all of which comes straight off 'bottom-line' profits! If your company's profit margin is 10%, you can expect to have to earn some $3 million dollars just to pay for one lost-time injury! Not controlling your injury rates in the current economic climate is sheer madness.
The costs of recordable injuries can also be considerable, especially as you can expect around 30 minor injuries for every lost-time injury. The direct cost for each recordable injury is estimated to cost approximately $8,066, plus a multiple of 10 for indirect costs ($80,660) means one recordable injury costs around $88,726.
If the ratio of 1 lost-time injury to 30 recordable injuries holds, as accident triangles suggest, then the total direct/indirect costs for ONE Lost-time Injury and 30 recordable injuries[$308,000 (LTI) + $2,661,780 (30 Recordable injuries)] are in the region of $3 million!!
Behavioral Safety and Return on Investment
Although Behavioral Safety has an astonishingly successful track record, it has been proven that some Behavioral Safety processes are more effective than others (Professional Safety, Feb, 2009).
Building on this scientific research, we have calculated the Return on Investment of common Behavioral Safety process designs. The table below reveals it is possible to gain about $1.7 Million dollars per 200,000 hrs worked (Average of 100 people, working for a year) for an optimally designed and executed Behavioral Safety process, versus a loss of about $2 million dollars per 200,000 hrs worked, for a poorly designed and executed process.