How to Create a Workplace Safety Program

Summary: Workplace injuries result in both direct and indirect costs to businesses, like medical expenses and loss of productivity. Find out how to create and implement a workplace safety program that can positively impact a company's bottom line.



The latest data shows that the number of non-fatal workplace injuries was 2.7 million, down 5.7% from the previous year continuing the declining trend over the past 15 years due to improved safety conditions and requirements. However, even though the workplace has gotten safer for employees over the years, accidents can still happen and cost businesses thousands of dollars annually in medical and other expenses. Workplace injuries and illnesses lower productivity and employee morale, and they also result in increased absences that could ultimately lead to lower profits.

Knowing how much workplace injuries cost could help convince managers and executives to invest more in safety or loss control programs. A safety program’s financial return on investment (ROI) is revealed in increased productivity, improved customer service, savings from fewer injuries and lower workers’ compensation costs– though these savings may take time to realize. The experience modifier that adjusts their workers’ compensation premium up or down may take up to four years to fully come to fruition, but the other costs of safety (both direct and indirect) would accrue immediately – every time a process is improved or an accident or injury prevented.

AmTrust Financial explored the direct and indirect costs of workplace injuries for a business, as well as how implementing a safety program can both positively impact the bottom line and make employees safer in “ROI of Safety-How to Create a Long-Term Profitable Safety Program.”

Costs of Workers’ Compensation Claims

A report from the National Safety Council  shows that the most recent data puts the cost of work injuries at $163.9 billion. The cost per worker was $1,100, which includes the value of goods or services each worker must produce to offset the cost of work injuries. The cost per death was $1.310 million while the cost per medically consulted injury was $44,000. The true cost of work-related injuries is much more than just the cost of workers’ compensation insurance and medical bills. It impacts the workplace both directly and indirectly.

Direct costs of worker injuries and claims:

• Wage replacement
• Medical expenses
• Litigation costs
• Property losses

Indirect costs of workers injuries and claims:

• Workplace disruptions
• Loss of productivity
• Low employee morale
• Impact on company reputation
• Worker replacement
• Repairs to equipment

What is a Workplace Safety Program?

The direct and indirect cost of workers’ compensation claims can be quite high. But, companies are creating workplace safety programs as a way to invest in their company’s safety while at the same time increasing employee welfare and productivity. Companies that invest in these safety programs believe losses from accidents are risks that can be prevented, so taking the steps to prevent accidental losses is seen as an investment into the health of the company. Reducing losses improves the quality of products and services, leading to better customer satisfaction and increased revenue.

ROI of Workplace Safety Programs

Investing in workplace safety programs brings savings in workers’ comp and other medical costs, but also provides a large financial savings overall in the long run. The Occupational Safety and Health Administration (OSHA) shows that employers who establish employee safety programs are able to reduce costs related to injury and workplace illness by up to 40%. These reductions bring immediate return on investment in the form of increased profitability. The key is to look at the money put into a safety program as an investment in the business, rather than an expense.

Employers that enforce safety procedures and regulations, provide safety training, education and occupational health programs not only create a workplace environment in which employees feel safe, but also create an environment of employee loyalty. Additionally, effective employee safety programs provide a means for businesses to comply with state and federal regulatory requirements, reducing the concern over exposure to fines and legal sanctions.

Basic Elements of a Safety Program

OSHA has recommended practices for safety and health programs for businesses of all sizes, which then can be customized to an organization’s specific needs. Workers feel more content on the job when they are engaged in the processes of a workplace safety program. Plus, employers will spend less time recruiting and training new employees and more time developing their company’s next leaders.

Basic elements of a workplace safety program include:

Management Commitment & Worker Involvement

If a leader’s attitude towards their company’s safety reflects its importance to the company’s operations, the workers’ actions will in turn reflect that. Management should communicate the program clearly to the workers and involve them in the formation and continuous implementation of the program.

Worksite Analysis

A critical step in an effective workplace safety program is creating a process to identify and assess current hazards on the premises or jobsite. Rigorous self-inspection combined with a visit or informational resources from the company’s insurer, local safety council, OSHA, etc., can help identify hazards. In addition, employees should be encouraged to recognize and report hazards or near miss accidents immediately.

Hazard Prevention & Control

Effective controls protect workers from workplace hazards, and help minimize or eliminate injuries, illnesses and accidents. Once safe working policies are established, make sure these are enforced at all levels.

Train Workers, Supervisors & Managers

Train everyone in the company at the implementation of the safety program. Include the safety program in new hire training or when an employee’s tasks and potential work hazards change. Establish and stick to a rigorous safety training schedule for the entire staff. Don’t become complacent by thinking that annual “refresher” training will accomplish your objective. To be effective, safety training must be presented, and repeated, often. An abundance of training solutions are available, especially those in a digital format that eases the chore of content development. For example, your workers’ compensation carrier may offer a full array of complimentary streaming video on demand that fits into your schedule without impairing productivity.

Courtesy of AmTrust

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