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No one goes
to work expecting to have an accident. Accidents that cause injury or
illness cost workers their present and extended health, as well as,
impose costs onto their employers, which affect the financial health
of the company. This increase to the cost of goods sold cannot be passed
on to the consumer because competition limits how much a company can
charge for the goods or services it provides. In addition, competition
is no longer just local--it is often has worldwide implications.
Most companies operate and compete based on a small profit margin. Each
time an accident occurs, the cost of the injury or illness must be subtracted
from profits either in real income or additional expenses such as insurance
premiums. These incidents therefore, impact a company in terms of both
direct and indirect costs. Here is an example of how many additional
sales are required to pay for industrial injuries:
ACCIDENT
COSTS |
1%
PROFIT MARGIN |
5%
PROFIT MARGIN |
10%
PROFIT MARGIN |
|
ADDITIONAL
SALES |
ADDITIONAL
SALES |
ADDITIONAL
SALES |
$1,000 |
$100,000
|
$20,000 |
$10,000 |
$5,000
|
$500,000
|
$100,000 |
$50,000 |
$25,000 |
$2,500,000 |
$500,000 |
$250,000 |
$50,000 |
$5,000,000 |
$1,000,000 |
$500,000 |
$100,000 |
$10,000,000
|
$2,000,000 |
$1,000,000 |
$250,000 |
$25,000,000
|
$5,000,000 |
$2,500,000 |
If
a company is operating at a profit margin of 5%, then $20,000 in new
sales will be needed to offset the cost for a $1,000 injury. If the
profit margin is nearer 1%, an additional $100,000 worth of goods or
services are necessary to keep that profit level. A lot of "goods
or services" must be manufactured and supplied to compensate for
those losses. Industrial back injuries for example average about $5,000
in expenses, every time a worker strains his back, other employees must
work longer and harder to achieve necessary production levels. And,
what of the impact to a workers quality of life considering the possible
increase in their susceptibility to chronic back problems.
Loss Prevention can contribute directly to the profitability of a company
and promote job security. The more profitable the company, the more
likely there will be funds available for better equipment, improvements
in the work environment and, potentially, an increase to wages.
While financial considerations are an important factor to both you and
your employer, your personal well being is equally as important, if
not more so. It is the knowledgeable worker that spends a little bit
more time, if necessary, to do the job safely than to suffer the consequences
of recovering from an injury.
Construction
Industry
Longshore
Industry Green Book (pdf)
Accident
Investigations
Worksite
Analysis
OSHA
Recordkeeping Requirements
Training
Roster
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