The Implications of the indirect cost following workplace incidents and accidents

The Implications of the indirect cost following workplace incidents and accidents

Indirect costs have a greater impact on the business financially, than the direct cost.

It’s important to be aware that workplace incidents and injuries can have a significant impact on the potential business revenue and viability, as they can cause loss of productivity, reduction of sales, low staff morale, loss of reputation and at worst business closure. If any worker suffers an injury during their employment, they are entitled to workers’ compensation.

However, while the direct cost of a workplace incidents and injuries such as workers compensation are covered by insurance, the indirect cost which often account for 60-80% of the total cost to the incident or accident remains as an expense to the business.

Some of these indirect or hidden cost following a serious incident or injury include:

  • Downtime following the event to investigate and provide assistance the injured and determine the damages and the ability for continuity of the work activities.
  • Time off work for the injured workers or awaiting repairs for the damage to plant or equipment.
  • Reduced worker activity during and following the accident or incident.
  • A loss on productivity because of lower skill levels filling in for the position.
  • A loss in moral by the workers who are impacted by the unsafe event.
  • Overtime payments due to workers that take on addition work for those that are unfit to attend work.
  • Training costs for new recruits or upskilling workers.
  • Administration costs for the processing of insurance claims and responding to the regulator with investigation reports.

 To minimize the potential of workplace incidents and injuries workplace should implement systems and process to mitigate risk.

How we are willing to help you:

As the Principal Consultant with FOCCALE Safety Management I will be having a Live Free Webinar, where I will teach “The 3 Strategies to help prevent unnecessary financial and human loss in your business”.

SafeWork NSW Inspectors focus on the building & Construction Industry
Picture of Faith Eeson

Faith Eeson

Faith has over 20 years experience working in a large government organisations; medium and small business organisations with roles from administration, Workplace Safety Management System (OHSMS); Injury Management and Rehabilitation; Safety Audit; Records Management, Investigation and Training. Faith has owned and managed various business such as boutiques, retail stores and currently a commercial cleaning service and safety management businesses.



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