No worker wants to lose an arm, leg, eye, hearing, or be exposed to an inhalation hazard.  Most employers recognize that personal protective equipment (PPE) can help limit or prevent such losses, paying dividends in worker safety, security, and moral.  Less apparent is that the small investment in PPE can save employers big money by more than offsetting costs resulting from injuries, chronic health problems, and potential workplace fatalities that the right equipment and training could prevent.

Failure to provide workers with the right PPE, training, and someone to make sure they are wearing the equipment is a mistake that gambles with your employees’ safety and health, the bottom line, and with your companies future (whether public or private).  It is no longer acceptable to look at workplace injuries in terms such as: “Well, I’ll have to pay higher insurance premiums” or, “This is going to cut into my productivity.”  Instead, when an injury does occur, its impact must be considered in terms of the amount of new business (revenue) that must be generated to recover the profit loss.

COST BENEFITS OF PPE

· The National Safety Council (NSC) reports that the average lost-time injury costs nearly $30,000.  PPE and proper training cannot only prevent injuries, it can lessen the severity of injuries that do occur.
· Workers compensation premiums are affected by injury frequency as well as severity.  So, the more injuries your company or department has (even if they are not serious ones) – the higher your premiums.  PPE and training can reduce injury frequency and severity.
· The U.S. Bureau of Labor Statistics reports that each non-fatal occupational injury or illness among workers in heavy construction (for example), requires the employee miss eight to nine workdays.  It is easy to see that by lessening injury severity, PPE and proper training can reduce the number of days missed.

WHAT MAKES UP THE COSTS ASSOCIATED WITH WORKPLACE INJURIES?

As some of you know, workplace injuries consist of “direct” and “indirect” costs.  Direct costs typically are those covered by worker compensation insurance and disability benefits.  Workers compensation covers ambulance services, emergency room care, treatment by a physician, medication, and hospitalization.   If necessary, temporary disability benefits are calculated as a percentage of the injured worker’s lost wages.

Indirect costs include those not directly related to the injury, but which occur as a result of the injury (stick with me, it gets better).  Because there is never such a thing as a “typical/normal” injury, these costs vary and can be difficult to determine.  However, reliable estimates place these costs at up to thirty times (30) the direct costs, but a more accurate representation would be three to four times the direct costs.  The International Safety Equipment Association (ISEA) points out that attempts have been made to trade these hidden costs since as early as 1931.

Some of these hidden costs include:
· Cost of the lost time of the injured employee(s)
· Cost of the lost time of the employees who have to stop work and respond to assist the injured
· Cost of replacing the first aid supplies needed to treat the injury
· Cost of the lost time to perform a thorough investigation of the accident
· Costs due to damage to machinery, tools, and other property
· Cost of training a new employee to fill in for the injured employee
· Cost of training the injured employee to perform a new job while rehabilitating
· Cost of blood and other fluids disposal

This list does not mention the costs associated with the management and litigation of the injury case.  As you can see, these costs can add up quickly.

SO HOW DO YOU CALCULATE THE TRUE COSTS OF WORKPLACE INJURIES?

Here is a simple formula that the ISEA feels can help you calculate the true effect of a workplace injury on the bottom line:

A) Direct cost of the injury   $__________

B) Indirect costs of the injury  + $__________ (three to four times the direct costs is a good rule of thumb)

C) Total nominal cost of injury (A+B)  $__________

D) Profit margin on job where injury  occurred $__________

 E) Added revenue needed to recover injury cost (C/D) $__________

Here is an example worked out using a typical injury that could occur in private industry (an eye injury) and that PPE could have prevented.

• A) Direct cost of an eye injury     $5,000
• B) Indirect costs of the eye injury  $15,000  (three times direct)
• C) Total nominal cost of eye injury (A+B)  $20,000
• D) Profit margin on job where injury occurred  ÷  5% (0.05)
• E) Added revenue company must generate {$20,000/0.05}= $400,000

In this hypothetical case, the company could have prevented this injury with a $5.00 pair of safety glasses or an $8.00 pair of goggles.  As you can see, the difference between the costs of eye protection and the $400,00 in new revenue that must be generated leaves no room for unprotected workers.  Keep this little exercise in mind, next time you hear or feel that PPE is too costly.

Related:
Personal Protective Equipment Program
Personal Protective Equipment Training

About the author:
Captain Benjamin is a career Safety Professional for a global chemical company headquartered in Cincinnati.  He is also a Captain on the Glendale Fire Department, which is a historic residential community just North of Cincinnati, Ohio.  The Glendale Fire Department runs Automatic Aid (on all structure related calls) with the Woodlawn and Lincoln Heights Fire Departments in Ohio.  James has served the Glendale Fire Department since 1988 when at the age of 14 he joined as a Cadet.  At the same age, James joined the Springdale Fire Department Explorer Post (Post 911).  During his time as Explorer Post Chief, Post 911 was ranked 3rd in the Nation.

Captain Benjamin holds both a Masters of Science Degree in Loss Prevention and Safety, as well as, Bachelors of Science Degree in Police Administration with a minor in Fire Protection Engineering Technology from Eastern Kentucky University.  Some of the professional certifications Captain Benjamin holds include:Firefighter II, National Registered EMT-B, Certified Arson and Explosion, Investigator/Instructor, Certified Safety and Health Manager, Certified Fire and Safety Inspector, and Certified Hazardous Materials Technician.

Captain Benjamin is also an active member of the Hamilton County Local Emergency Planning Committee (LEPC).  He is also a member of the following organizations: National Fire Protection Agency (NFPA), The American Society of Safety Engineers (ASSE) Professional Member, National Association of Fire Investigators (NAFI), Institute for Safety and Health Management (ISHM), and the Fire Department Safety Officers Association (FDSOA).

Prior to working as a Safety Director, James was employed by Eastern Kentucky University as an Adjunct Professor and taught courses in Fire Protection Engineering Technology and Fire ground Command and Tactics.

In 1994 Captain Benjamin received the Lincoln Heights Fire Department’s Heroism Medal for a double rescue involving a man and his infant son who were trapped in a fully involved apartment fire.

James is a native of Cincinnati, Ohio and currently lives in Glendale.  He is a second-generation firefighter; his father (deceased) was a firefighter with Glendale and his brother is a career firefighter for the Loveland-Symmes Fire Department in Loveland, Ohio.