Editor's Note: In the past decade, safety directors have gotten pretty good at demonstrating the indirect or hidden costs of accidents to argue that injuries and illnesses are more expensive than commonly believed. Last week, safety engineer and consultant Robert Bernard, who has made this argument many times himself, went out on a limb and questioned whether it's appropriate to include certain losses as indirect costs. SafetyXChange board member Mark Hansen, another grizzled safety veteran, provided the rebuttal.

We asked you, the SafetyXChange members, to weigh in on the debate. Here's what you had to say:

Look Past Fixed Operating Costs

To think that an accident and/or injury doesn't cost a business money over and above a fixed operating cost is a bit short sighted. As long as there are workers' comp insurance premiums for a business to consider, accidents will cost money. The scope of the injury and its frequency have a direct effect on the bottom line. The ability to control collateral costs of injuries greatly affects the company's competitiveness. In addition to rising premiums, there are risks of litigation and OSHA citations. Food for thought, don't you think?

L. Randall, OHS
Marsh Aviation

Administrative Services Associated with Accidents Are Embedded Operating Costs

I agree [with Mark] that there are embedded costs associated with W/C claims that go unaccounted for. Yes, [as Bob points out], we would be paying for administrative support anyway, even if it wasn't used to investigate the accident and process the claim. However, the people who do this have a job that we have assigned a particular value to and now they are taken away from that to perform the investigation. To me that is a loss. Also, as we all know, it's just not as simple as completing the paperwork or calling your carrier. Let's talk about the time spent on the phone with the case manager, the meetings with the employee to get billing issues resolved, the talk about light duty, etc. Those costs are all relative and have a dollar figure that can be attached.

Darla

They're Both Right

I agree with both [Bob and Mark]. Unfortunately, most companies usually look only at direct costs. I try to educate them about the indirect costs. . . We have found that creating/maintaining a safe work environment has increased our productivity and profits. We have also experienced decreased absenteeism and improved morale. Many of our employees report that they are working safer at home, thereby reducing our group medical insurance costs, which helps our bottom line since we self-insure. We finished 2004 with a 2.62 OSHA Incident Rate and our OIR for the first quarter of 2005 was 1.95.

MTColeman

The Final Word: Remember the Human Costs

By Kevin Cobb

Editor's Note: Keep up the debate on the SafetyXChange discussion group. In the meantime, I don't mean to be unfair to Bob and Mark, but I can't resist giving the final word to Kevin Cobb:

Often, when calculating the so called "real" cost of safety we crunch numbers and forget about what really matters. Recently while training, one of my students reminded me of the human costs.

Seven years ago, "Jim" was driving his pickup truck down a four-lane highway. He wasn't speeding and had his eyes on the road. He was about to pass an 18-wheeler when a driver trying to cross the highway tried to beat the rig. The driver never saw Jim's pickup coming. Two young ladies died in the crash - the driver and a passenger. They were just 17.

Jim was devastated even though the accident wasn't his fault. For three days he refused to talk to anybody. On the fourth day, the phone rang. For some reason, Jim decided to answer. It was the father of one of the victims. "You killed my daughter and I want to kill you." Jim didn't, couldn't say a word. After a few moments of painful silence, the girl's father spoke: "I realize you're a victim of this horrible tragedy too and I'm calling to make sure you're allright." Jim broke down, sobbing.

Jim has struggled to get his life back to some semblance of normal. He's even become an EMT hoping to somehow save lives to make up for those he feels he took. But he can't get those girls out of his head for more than an hour or two at a time. He thinks of them every holiday. Their birthdays are especially painful. But the anniversary of the accident is the worst day of all.

Conclusion

The moral to Jim's story is simply this: The cost of accidents can be measured in many ways. But the most significant cost of all is its impact on lives - not just those of the victims but of the survivors.

$AFETY & THE BOTTOM LINE

Injuries & Donuts: Both take a lot of dough!

SAFETY IN DONUTS

Accidents are expensive. But dollar figures don't necessarily do justice to how much they really cost. So the next time you sit down with your CEO, think about stating the case in donuts. Ask the CEO to consider that to cover the cost of a fairly modest $500 accident, a company would have to:

• Bake and sell 235,000 donuts;
• Bottle and sell 61,000 cans of soda; and
• Deliver 20 truckloads of concrete.

Source: American Society of Safety Engineers

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