To accurately calculate the costs associated with workplace violence incidents, it’s essential to consider both direct and indirect costs. Here is a detailed breakdown of the various cost components, using average values where available.
Direct Costs
- Medical Expenses:
- Average Cost per Injury: $37,500
- Average Cost per Fatality: $1,150,000
- Workers’ Compensation:
- Average Cost per Claim: $30,000
- Costs include medical treatment and compensation for lost wages.
- Legal Services:
- Average Legal Costs per Incident: $45,000
- Includes legal defense, settlements, and penalties.
- Emergency Response:
- Average Cost: $10,000 per incident
- Covers immediate response actions such as calling emergency services and on-site medical care.
Indirect Costs
- Lost Productivity:
- Productivity Loss per Incident: Approximately $1,500 per day for affected employees.
- Consider the downtime for both the victim and other employees affected by the incident.
- Training and Replacement:
- Cost to Hire and Train Replacements: $5,000 per new employee.
- Includes recruitment, hiring, and training costs.
- Investigation and Reporting:
- Investigation Costs: $8,000 per incident
- Involves internal investigations, documentation, and compliance reporting.
- Increased Insurance Premiums:
- Annual Increase: $4,000 – $6,000
- Higher premiums due to increased risk assessments by insurers.
- Employee Morale and Turnover:
- Turnover Costs: $20,000 per lost employee
- Includes productivity loss, hiring, and training new employees.
- Reputation Damage:
- Estimated Loss: $50,000 – $100,000
- Costs related to loss of business, public relations efforts, and brand rebuilding.
Example Cost Calculation
For a company experiencing one serious injury and one fatality in a year, the estimated costs would be:
Direct Costs:
- Medical Expenses: $37,500 (injury) + $1,150,000 (fatality) = $1,187,500
- Workers’ Compensation: $30,000 (injury) = $30,000
- Legal Services: $45,000
- Emergency Response: $10,000
- Total Direct Costs: $1,272,500
Indirect Costs:
- Lost Productivity: $1,500/day × 20 days = $30,000
- Training and Replacement: $5,000
- Investigation and Reporting: $8,000
- Increased Insurance Premiums: $5,000
- Employee Morale and Turnover: $20,000
- Reputation Damage: $75,000
- Total Indirect Costs: $143,000
Total Costs:
- Total Direct Costs: $1,272,500
- Total Indirect Costs: $143,000
- Grand Total: $1,415,500
Preventive Spending Justification
Given the high costs associated with workplace violence incidents, it is economically justified to invest in preventive measures. Effective preventive programs may include:
- Training Programs: Annual training for all employees on recognizing and reporting violence, at an estimated cost of $50 per employee.
- Security Measures: Enhancing physical security (e.g., CCTV, access controls) with a one-time cost of $50,000 and ongoing maintenance of $10,000 annually.
- Employee Assistance Programs (EAPs): Providing counseling and support services at $100 per employee annually.
- Safety Audits: Regular risk assessments and safety audits costing $15,000 annually.
If you would like to prevent these types of damaging incidents in your workplace then contact us for your free consultation and review today.
Email: Training@southerncross.company
Phone: 708-990-4443
Stay Lethal My Friends,
Joe Malone
Sources
https://www.mscdirect.com/betterMRO/safety/workplace-injury-cost-calculator