3 Hidden Costs of Employee Injuries

Haley Bass

The cost of workers’ compensation is often compared to an iceberg, with direct, expected costs peeking above the surface, and the hidden indirect costs a danger concealed beneath the waves. The metaphor seems dramatic, but dealing with these unexpected costs after an accident can produce some major financial damage, both in the short- and long-term.

The U.S. Bureau of Labor Statistics reports that there are about 3 million non-fatal workplace injuries in the United States every year. When an accident occurs in the workplace, an employer is prepared with insurance to cover (or reduce) medical expenses and workers’ comp payments. But indirect costs come out of a company’s profits.

According to the Occupational Safety and Health Administration (OSHA), nearly a billion dollars per week is spent on the direct costs of workplace injury, such as medical care and insurance claims. But that billion could be only 10% of the total cost of workplace injuries—and OSHA studies claim that the ratio of indirect costs to direct costs may be even higher--up to 20:1.

What could possibly cost so much money? Here are some of the hidden costs of employee injuries, and how you can reduce (or even avoid) them:

1. You have to replace or cover for the injured employee.

If an injured employee is going to be out for a long period of time, you’ll need to hire and train someone else to temporarily replace them. Not only does that process cost time and money on its own, but a new employee has a learning curve and will be less productive while training. And if you’re not replacing the employee, you’ll need to have existing workers cover the responsibilities of the injured employee, and you’ll potentially pay for their overtime.

2. You have a lot more paperwork to do.

Dealing with the workers’ compensation claim will take time away from your regular work. From investigating the accident and filing the claim, to dealing with insurance and implementing corrective action, time will inevitably be lost. If equipment or property was damaged in the workplace accident, it will need to be repaired or replaced. This typically isn’t cheap, and the time it takes for repairs ends up increasing lost productivity costs.

3. Your other employees often lose productivity.

When an injury occurs, time and productivity is lost as other workers go to assist the injured employee. They might also have to clean up damage from the accident or file a witness report. Not to mention, the overall morale of the workplace is lowered after an accident. Employees are distracted, uneasy, and often afraid that they might get hurt next. Normal work procedures are disrupted to deal with the accident and to change schedules to cover the absent employee. All of this leads to a loss in productivity.

The best way to avoid these costs is by implementing a safety program. Perform regular safety inspections, provide your employees with necessary protective gear, schedule thorough safety training, and display safety reminders throughout the workplace.

The best way to reduce these costs is through a quick return-to-work program. Concentra is a leader in occupational medicine, treating more than 180 million workplace injuries since 1979. Our active return-to-work program keeps your employee engaged in productive work while going through physical therapy, so you get your employee back to health and work quickly.