Safety Taboo: Talking about the financial side of safety

The National Safety Council has estimated the total cost of worker injuries in the US to be over $175 billion dollars per year. This is more than the total cost of major diseases such as cancer and diabetes. Estimates are for the direct costs of incidents only, not indirect costs such as lost productivity, training replacement employees, and administration costs. The numbers are staggering.

The financial cost of injuries varies from company to company depending on industry and maturity of safety culture. Although costs differ, one thing is fairly consistent: people are often hesitant to discuss the financial aspects of safety. This is likely because safety is seen primarily as a matter of protecting lives rather than cutting costs, as it should be. Talking about safety in terms of dollars is taboo, particularly when talking to those on the frontline. However, when the cost of incidents isn’t openly discussed among leaders, it too often isn’t included in decision making.

In our experience, many safety professionals and operations managers are unaware of the true cost of incidents within their organizations. As a result, the safety investment decisions they make often focus solely on the upfront expense, rather than considering the broader financial impact. While managing budgets responsibly is important, it is also important to factor in the current costs of workplace incidents. When leaders are fully aware of costs, it makes it possible to assess return on investment when making spending decisions. Although ROI can be difficult to measure precisely, the American Society of Safety Professionals (ASSP) estimates that every $1 invested in safety yields a return of $4 to $6. Given the average cost of a lost time injury is $58,800[1], it doesn’t take too many incidents to make most safety investments appealing. 

While safety professionals and operations managers might not be fully aware of the cost of incidents, executives surely are. However, in our experience, even those that spend millions on worker’s compensation are often reluctant to spend a few hundred thousand on preventative technologies. Again, the primary motivation for safety decisions should always be the prevention of harm. However, ignoring the financial impact of incidents can undermine that goal. When safety is viewed purely as a cost rather than a smart investment, it becomes easier to justify not spending money. “It’s not in the budget” is an acceptable rationale. But if a company is experiencing incidents, (even taking human suffering out of the equation) doesn’t it make sense to conduct a cost-benefit analysis before rejecting safety investments?

Greater transparency around the true costs of incidents empowers safety professionals to advocate more effectively for the resources they need, and helps all decision-makers make choices that are both fiscally responsible and ethically sound.