The Hidden Costs of Operator Error

Nov 25 2019 | 3 Min. Read Training Safety

When you are investing in workplace safety, such as maintaining your equipment or installing new safety signage in the workplace, do you ever wonder how much an on-the-job injury could potentially cost your company? The truth is that there are multiple factors to consider when calculating the total cost of an injury. With each injury that occurs on the job, your company could incur healthcare/legal expenses, OSHA fines, financial losses due to decreased productivity, and other indirect expenses. When you look at the big picture, all of these hidden costs can really add up!

Healthcare/Legal Expenses

When an employee is injured on the job, the employer has a legal duty to compensate them accordingly for lost-wages and healthcare expenses through workers’ compensation. According to OSHA, “It has been estimated that employers pay almost $1 billion per week for direct workers' compensation costs alone” ¹. The fees incurred as a result of these direct costs include payments to workers’ compensation, legal fees, and the employee’s medical expenses. With the rising costs of healthcare and insurance premiums, an influx in workers’ compensation claims could be damaging to a company’s bottom line.

OSHA Violations

To stay compliant with the law, you must document and report all “serious work-related injuries and illnesses” ² to OSHA. Aside from the possible health-care expenses and legal fees associated with reportable injuries, OSHA fines start at $13,260 per violation ³ . Even with just one injury occurrence, your business could be on the hook for thousands of dollars in OSHA violations. Think about if you had multiple serious injuries occur in just one year; these fines can add up quickly!

Loss of Productivity and Indirect Expenses

In addition to the obvious financial risks you run with operator error, injuries impair your company’s productivity, and in turn, your bottom line. The Centers for Disease Control (CDC) estimates that “productivity losses linked to absenteeism cost employers $225.8 billion annually in the United States, or $1,685 per employee” ⁴. OSHA refers to these expenses as “indirect costs,'' which include “training replacement employees, accident investigation and implementation of corrective measures, lost productivity, repairs of damaged equipment and property, and costs associated with lower employee morale and absenteeism” ⁵. Operator absenteeism places a large financial burden on your business as it may require you to retrain, rehire, and reorganize your entire operation.

Injury Prevention in the Workplace

The good news is that while workplace injuries are costly, they are also entirely preventable. There are an estimated 96,000 injuries each year on powered industrial trucks, or one every 5 ½ minutes. However, proper equipment maintenance, considering environmental risk, and providing effective training can become huge assets to companies who comply with regulation to reduce risk, damage, and liability.

First, consider your environmental safety factors such as proper signage and lighting. Are your work areas well lit and do they display the proper safety signage such as stop signs and speed limits? Second, inspect your equipment and ensure that everything is in proper working condition prior to each trip. If equipment needs to be replaced, do not delay! Replace or repair damaged equipment immediately.

Finally, think about your training program. Why gamble with something as important as operator training when you could call in an expert? Consider utilizing a company who specializes in operator training, such as TrainMOR. Effective training increases operator confidence and enhances safety, protecting your business from the hidden costs of operator error.

Ultimately, prevention is the most cost-effective way to address workplace injuries. By investing in additional safety measures, you are mitigating risk by ensuring your employees know how to safely and effectively operate their machinery.