Costs of Incidents

April 5, 2009

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Few safety departments have systems in place to verify these statements, however.

Furthermore, companies which use verification systems that simply capture cash costs are missing a significant piece of the true incident cost puzzle.

If the department does not understand an organization’s true financial loss, senior management will find it difficult to see what financial benefits the S&H department provides.

To determine average direct incident costs for a given time period, one sums the actual cash costs, divides that total by the number of incidents, and records this average in the total incident costs (TIC) worksheet (Figure 1).

To determine average indirect costs, one must multiply the average time (in hours) a department spends on incidents by the average hourly compensation rate; the result is then recorded in the TIC worksheet.

Finally, one adds direct costs to indirect costs to arrive at total incident costs.

Consultation with the victim; recordkeeping and filing; follow-up consultation; disciplinary action.

These supplemental compensations are often difficult to determine and, unless applied consistently, introduce an unstable element to the calculations.

By working to minimize these costs, safety professionals will be able to exhibit fiscal responsibility and show the value-added aspects of safety efforts.

Presentation at 1998 American Industrial Hygiene Conference, Atlanta.

. “What Does Management Think About Safety and Health?”

Jeffery E. LaBelle, CSP, CIH, is safety manager for Gateway, located in North Sioux City, SD.

He holds a B.S. in Physiology from Michigan State University, an M.S. in Industrial Hygiene from the University of Michigan and an M.B.A. from the University of Toledo.

LaBelle is a member of ASSE’s Northwest Chapter and Chair of its Siouxland Section.

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