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What Employee Injuries Really Cost- How Can You Help?

It is the grand opening of your newest, and third store. Business has been great in your other two stores, and you can’t imagine why this location would not skyrocket to success like the others have. You have pulled a veteran clerk, Jake, from one of the other locations to assist with the grand opening rush. Jake trains many of your new hires, has been on board since the opening of your first store and is a vital part of your team with a wealth of knowledge about your business.

Today, Jake tripped over an electrical cord stretched across the breakroom floor and fell into a stack of boxes by the doorway. As a result of the fall, he has a broken ankle and has been taken off work for six weeks. Suddenly your vision of a successful third store may not be realized due to the costs associated with this injury. You did not anticipate this in budgeting!

What does an employee’s injury, like Jake’s, cost your business? You probably think immediately of the obvious, or direct, costs such as:

  • Employee’s medical bills;
  • Raised workers’ comp insurance premiums;
  • Investigations;
  • Disability compensation; and
  • Legal expenses/settlements.

But what about the less apparent, or indirect, costs? Such factors as:

  • Lost productive time of the injured employee;
  • Equipment that may have been damaged during the incident;
  • Interruption of business during the incident;
  • Time and resources invested in hiring and training a temporary replacement for the injured employee;
  • Stained company reputation when word begins to spread about the injury;
  • Loss of employee morale; or
  • OSHA fines.

Indirect costs are usually two to ten times costlier than the direct costs we typically think of regarding employee injuries. Unlike direct costs that commonly are paid by the insurance company, indirect costs come directly out of your company’s pocketbook.

Here is the good news, there is a way to help these costs and your bottom line. According to OSHA, businesses that implemented health and safety programs cut these expenses by twenty to forty percent in 2016. Here are some good tools to help achieve this:

  • Have regular mandatory safety meetings;
  • Incorporate games and incentives into your safety program (make safety fun!);
  • Ensure that all employees are aware that they are responsible and will be held accountable for adhering to safe work practices; and
  • Ensure employee “buy-in”, employees must believe safety is important.

Without full organizational participation, your program may not be an effective one. Having an effective program will then strengthen employee morale and build a strong culture of safety when employees trust that management values their well-being.

Although the direct and indirect costs of an employee’s injury, like Jake’s, can have astounding effects on your bottom line, it should be re-assuring to know that there is a way to help combat these costs by implementing a sound safety program and building a strong safety culture. This does not only fulfill a moral obligation to keep your employees safe, but can also substantially propel your company toward meeting its financial needs by reducing those indirect and direct costs. Making safety a priority can truly propel your organization by promoting organizational growth and success. Jake’s injury should not derail your financial plans in successfully opening your third store.

Modern Business Associates is a HR outsourcing company offering flexible, cost-efficient solutions for payroll, tax accounting, benefits administration, risk management and HR consulting. If you would like more information about how the experts at MBA can help your business operations, please email us at or call (888) 622-6460 or visit

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