The cost of an unsafe industrial workplace

Organizations that focus on safety, such as always wearing the proper personal protect equipment, likely are saving money in the long run by avoiding expensive and resource-draining employee injuries. Rudzhan Nagiev/iStock/Getty Images Plus

In 20 years covering the metal fabricating industry, I’ve never covered a shop that won the Fabricators & Manufacturers Association’s Award for Safety Excellence that wasn’t doing well.

Maybe that has something to do with the overall robustness of the metal fabricating economy in North America over the past couple of decades. But it also might be connected to the way they value their employees’ overall safety, which in turn helps to foster an engaged workforce. That’s when you start to talk about culture development, which is something that doesn’t snugly fit into the column in a general ledger.

Those accountants, however, can easily identify costs related to safety efforts. Sometimes the target, like the salary for a full-time environmental, health, and safety manager, is easy to identify. Other times, the focus might be on smaller items, like lunches or t-shirts, that celebrate successful safety initiatives.

But do those same people with an eagle eye for controlling expenses consider the costs that are avoided because the risk of injury has greatly been reduced? Do they truly value the small investments that help to establish a healthy safety culture?

Christopher Chell, engineering, fabrication, and equipment manager for the 2023 Award for Safety Excellence-winning Nova Group, said that there’s a real business value to the company’s safety commitment. Not only does it stand out to its clients in the defense industry, but the fact that the company has had no OSHA-recordable injuries or illnesses over the last six years means that the shop has been about as productive as it can be.

“The amount of time, energy, and money that we would be spending on mitigating injuries would be astronomical compared to the amount of time we spend on the front-end preventing injuries and promoting safety,” Chell said. “Working on all of these [safety] programs and having employees participating in these programs is very valuable. It’s literally saved us money.”

The numbers can be pretty astronomical when you look at them from a macro point of view. According to the National Safety Council (NSC), the total cost of work injuries in 2021 was $167 billion. That covers wage and productivity losses ($47.4 billion) medical expenses ($36.6 billion), and administrative expenses ($57.5 billion). The NSC estimated that that the cost per worker for these injuries in 2021 was $1,080; that’s the dollar value of goods and services that each worker has to produce to offset the cost of the work injuries.

Those dollar figures are hard to fathom, but the monetary impact on an organization because of injuries is easy to understand. An injured person misses time from work. The accident needs to be investigated, and forms have to be filled out and filed with authorities. Others possibly need to be trained, taking people away from their regular duties.

With most injuries, you assume a worker has an accident, spends time at home getting better, and returns to the job. Sometimes the results of an injury can linger, and that leads to extended periods away from work. This often occurs with musculoskeletal injuries, such as carpal tunnel syndrome, which now account for more than 50% of all nonfatal occupational injuries resulting in missed work, according to the Bureau of Labor Statistics. Twenty-five percent of employees that experienced this type of injury missed 31 days or more. That’s a huge impact, particularly for small and medium-sized shops that count on their workforce showing up every day and being productive.

The other nonfinancial benefit that comes with a metal fabricating company dedicated to fostering a work environment where employee safety is paramount is that it feeds the formation of the hard-to-create culture that separates top-performing organizations from those that just get by. Employees can see through pronouncements filled with buzzwords and luncheons where a company president shows up to eat and have some pictures taken with people whose names he probably doesn’t know. They do see peers being honored for participating in the safety program and take note when jobs are halted, and even delayed, to address an unsafe situation.

Seeing is believing, and employees see a lot on the shop floor. If a metal fabricating company wants a dynamic workforce, employees need to see an organization that supports them. The most obvious way to do that is to keep minimizing the chance of someone getting hurt at work. It makes financial sense. It’s also the right thing to do.