How Calgary Businesses Save Money With OHS Incident Investigations

Having A Best in Class Investigation Program Yields Abundant Advantages

Here are the important factors to keep in mind for doing investigations: 

1. Minimizing Direct Costs: Immediate Financial Impact

When an incident occurs, the most visible financial impact is usually direct costs, which can include:

• Medical Expenses: Injuries can lead to high medical costs for treatment, rehabilitation, and long-term care.
• Workers’ Compensation: Workplace injuries typically trigger workers’ compensation claims, which directly affect an employer’s insurance premiums.
• Equipment and Facility Repairs: Some incidents result in damaged machinery or property, leading to additional repair or replacement costs.

By identifying the root causes of these incidents, companies can introduce safeguards, training, and policy changes that significantly reduce the likelihood of costly future events. A study by the Liberty Mutual Research Institute for Safety found that every dollar invested in safety and health initiatives returns four to six dollars in cost savings through reduced injury-related expenses.

2. Reducing Indirect Costs: Productivity and Operational Efficiency

Indirect costs are often harder to quantify, yet they can be much higher than direct costs. These include:

• Lost Productivity: When incidents occur, they disrupt workflow. Downtime caused by injury, investigations, or equipment repair can lead to delays, lost output, and increased overtime pay to cover shifts.
• Employee Morale and Engagement: Frequent incidents or a lack of focus on safety can lead to disengagement, low morale, and ultimately, higher turnover. Low morale and high turnover increase recruitment and training costs and can reduce overall team productivity.
• Customer and Public Perception: Repeated incidents may erode trust of clients and the public. If an incident impacts service quality, delays a product launch, or attracts media attention, the negative impact on reputation can be significant.

Employers who attempt to investigate incidents can address these root issues early, maintaining workflow continuity, employee satisfaction, and company reputation. Proactively improving safety can also improve employee engagement, leading to better productivity and reduced absenteeism.

3. Avoiding Legal and Compliance Costs

In many industries, companies must meet stringent safety and regulatory requirements. Failing to comply can lead to:

• Fines and Penalties: Safety violations often attract fines from regulatory bodies.
• Legal Costs: Incidents that lead to lawsuits are not only costly in terms of legal fees but also carry the risk of punitive damages.
• Insurance Premium Increases: Regular incidents or unsafe working conditions can cause insurance premiums to rise.

Comprehensive incident investigations can help companies identify non-compliance issues early, ensuring they meet or exceed regulatory standards and avoid hefty penalties. For instance, according to the National Safety Council, the total cost of work injuries in 2021 was $163.9 billion, including lost wages, medical expenses, and administrative costs. By investigating incidents and addressing the causes, companies can prevent costly safety violations and keep insurance costs under control.

4. Enabling Data-Driven Safety Improvements for Long-Term Savings

Incident investigations offer valuable data that can guide future safety strategies. By analyzing patterns and trends, companies can:

• Identify High-Risk Areas: Determine which activities, machinery, or practices pose the highest risk and prioritize interventions accordingly.
• Develop Targeted Training Programs: Training employees in areas with a high rate of incidents can address knowledge or skill gaps, making workplaces safer and more efficient.
• Implement Effective Controls: From engineering controls to personal protective equipment (PPE) standards, companies can use incident data to tailor controls to their specific needs.

By continuously improving safety standards based on investigation findings, companies can create a safer work environment and reduce both direct and indirect costs over time. This proactive approach also ensures the business remains agile in the face of regulatory changes, emerging industry standards, and evolving safety challenges.