When we talk about accidents or illnesses must always be aware that we often speak of real tragedies fall not only on workers but also on their families. Often the same accidents or illnesses that affect the entire community has to take care of and 'assistance to workers and families. The theaters or companies in general, especially for minor injuries, suffer economic losses (not only) high.
The size of indirect costs is in fact inversely related to the severity of the accident. Less serious is the injury, the greater the ratio of indirect costs to direct ones (4 or 5 times higher).
Let us briefly what is meant by direct and indirect costs: Direct costs are associated
uniquely object Cost regarded as an accident, injury or occupational disease:
- medical costs for the injured (hospital costs, medical consultations, rehabilitation, medicines);
- Integration of wages for the portion not covered by insurance;
- Damage sustained by the means of production (machinery, equipment, buildings, vehicles);
- Value of production disruptions caused by accidents;
- Possible loss of productivity of injured worker after his return to work.
Indirect costs are not defined according to a report instead of uniqueness, and you must use an allocation method.
Indirect costs include:
- Cost of strikes or reduced productivity of the workforce due to the high frequency of accidents;
- Cost of overtime necessary to recover the time lost as a result of the accident and the absence of injured workers;
- Cost of investigations, compilation of reports and relations with the authorities;
- Cost of retraining, and recruiting in the event that the injured workers of changing to the task, because of 'high staff turnover, which always occurs in the workplace unsafe.
Investing in prevention is definitely the way that benefits all.
Some examples can be immediately put in focus the subject matter:
in Switzerland was conducted a prevention program that involved employees working on ladders. The program included a training package which cost 2.2 million USD. After the first year there was a reduction of 500 accidents. Considering that a fall from a ladder accident involves costs (insurance, administrative and lost production) to $ 8,600, we see that the reduction of 500 accidents has brought a saving of 4.3 million USD. (Source ILO)
If we think in a logic of countries we see that those with health and safety systems spend less developed, because of injuries and occupational diseases, a higher percentage of GDP and are forced to use resources potentially be destined more productive activities.
The International Labour Organisation (ILO) estimates that occupational diseases and injuries are up to 10% of GDP in Latin America from 2.6 to 3.8% compared to EU countries.
A study done by the journalist Peter Veronese in the newspaper La Repubblica of 22/09/2009 we see that in addition to the human balance, the high mortality rate and the frequency of workplace accidents have a social cost that according to the Inail € 45.5 billion is only for Italy. 3.2% of GDP. In total this fall is Inail insurance costs, prevention interventions, the costs directly related to damage (work hours lost, failures, replacements, loss of image of the companies involved).
From this example it is clear that investing in prevention and improving health and safety in the workplace is appropriate for everyone, not just for ethical reasons but also for economic reasons.
I am aware that talking about costs when it comes to such a sensitive subject, it can be seen by some as a cynical way to approach the subject but I think if we show, for an employer or a manager, that investing in their security will benefit economically, we will have some more chance to convince him to make economic investments in prevention of occupational accidents and occupational diseases.
It is important to consider that in the case reduction of accidents and the benefits are immediate in the case of reduction of occupational diseases, the benefits are seen in the long run.
An effective way to get investment in prevention may be to carry out economic and financial forecasts, providing a realistic view of the total costs of injuries.
Consider, in this work, only the costs that fall on companies and reserve those for other studies that fall on workers or society as a whole.
Some examples of items that generate costs for a company:
Absenteeism or sick leave: the sum of the costs of activities to alleviate the effects of working time lost;
Reduction of the flexibility and capacity to cope with unforeseen situations;
Staff turnover: total cost of the business generated by the rotation is not desired, such as replacement costs, additional training, lost productivity, announcements, recruitment procedures;
Retirement Early and disability: fines, compensation to the victim;
non-medical rehabilitation: amount spent by the employer to facilitate return to work (consulting, training, adaptation of the workplace);
Directors of absences: managerial activities that have be performed by the company in relation to sickness absence;
material damage, costs of damage or repair of machinery, premises, materials or products related injuries;
Other costs not related to health (research, management costs, external costs): time and money spent on investigations of injury, assessment of the workplace;
Responsibility: Employers or insurance companies are entitled to damages resulting from injury at work or occupational diseases;
Differentiation of awards: the insurance companies or public funding awards in the event of increased risk;
legal sanctions and fines: the Labour Inspectorate can impose sanctions or require improvements the temporary suspension of production;
additional paid leave, compensation for dangerous tasks;
lost production time, services not provided: the lost production due to an event that caused injury (eg. because you need some time to replace a car or because the production must be stopped during an investigation);
opportunity costs: orders lost or gained, market competitiveness;
Lack of profitability of invested capital, earnings not realized because of the cost of the accident, ie amount of costs due to accidents not invested in income-generating activities (such as production, stock market or savings) that generate interest
rules market attractive to new staff, loss of contracts, impact corporate image;
E 'possible to make an economic assessment of these costs? E 'possible to calculate the cost of an accident or an occupational disease?
The answer is yes.
There are sites that carry out an assessment of the costs that a company faces as a result of accidents or illnesses. One such site is the OSHA "$ afety Pays". The program is an interactive system that helps employers to assess the costs of accidents and occupational diseases and the impact on profitability of a company. This system uses the profit of a company, the average cost of an accident or illness and an indirect cost multiplier to project the amount of sales that a company would need to generate to cover those costs. Companies can use this information to predict the direct and indirect effects of injuries and illnesses and the estimated sales needed to offset those losses.
The site is:
click here
connecting to this site (in English) and entering the type of injury, the number of injured workers and the percentage of current interest rate (3% default) we to estimate the real and economic. Just then to convert the figure obtained from dollars to euro and then go to update the figure (which refers to the year 2005) with an excel file that is on the Istat website at:
click here
This calculation obviously can not be perfectly coincident with the actual calculation that we could get after a careful cost analysis. In calculating the costs we would still have the difficulty of estimating indirect costs. This program from OSHA "$ afety Pays" can be useful if we want to quickly make a rough estimate.
I think the OSHA program can be easily used by all even by those who did not make economic studies.
Giuseppe Patti
References:
Factsheets European Agency for Safety and Health at Work: http://osha.europa.eu/en/publications/factsheets/
Michael F . Drummond. Methods for the economic evaluation of health programs. Second Edition. Scientific thinking editor.
Istat: Annual Salary: http://www.istat.it/prezzi/precon/rivalutazioni/
OSHA "Safety Pays program"
http://www.osha.gov/dcsp/smallbusiness/safetypays/index .
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Thanks:
Professor Anna Montini University of Bologna
Dr. Stephen Vanzant MC Fondazione Teatro Comunale di Bologna
