Cost Calculation for Workplace Violence Incidents

Cost Calculation for Workplace Violence Incidents

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

  1. Medical Expenses:
    • Average Cost per Injury: $37,500
    • Average Cost per Fatality: $1,150,000
  2. Workers’ Compensation:
    • Average Cost per Claim: $30,000
    • Costs include medical treatment and compensation for lost wages.
  3. Legal Services:
    • Average Legal Costs per Incident: $45,000
    • Includes legal defense, settlements, and penalties.
  4. Emergency Response:
    • Average Cost: $10,000 per incident
    • Covers immediate response actions such as calling emergency services and on-site medical care.

Indirect Costs

  1. 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.
  2. Training and Replacement:
    • Cost to Hire and Train Replacements: $5,000 per new employee.
    • Includes recruitment, hiring, and training costs.
  3. Investigation and Reporting:
    • Investigation Costs: $8,000 per incident
    • Involves internal investigations, documentation, and compliance reporting.
  4. Increased Insurance Premiums:
    • Annual Increase: $4,000 – $6,000
    • Higher premiums due to increased risk assessments by insurers.
  5. Employee Morale and Turnover:
    • Turnover Costs: $20,000 per lost employee
    • Includes productivity loss, hiring, and training new employees.
  6. 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:

  1. Training Programs: Annual training for all employees on recognizing and reporting violence, at an estimated cost of $50 per employee.
  2. 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.
  3. Employee Assistance Programs (EAPs): Providing counseling and support services at $100 per employee annually.
  4. 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

https://www.osha.gov/safetypays/estimator

https://www.sequoia.com/2024/04/california-requires-workplace-violence-prevention-plan-effective-july-2024-updated

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