Workplace injuries—common among frontline workers—are costly to employers and employees alike.
U.S. employers pay over $1 billion per week in direct workers’ compensation costs include upfront costs such as workers’ comp payments, medical expenses, and legal services. Employees pay the price too, as an injury can lead to lost wages and medical bills not covered by insurance.
Indirect costs-often 2-3x higher than direct costs-drain drain profitability through lost productivity, operational disruptions, and rising insurance premiums.
The National Safety Council estimates that work-related injuries cost businesses $167 billion in 2022. It's a staggering sum that includes lost wages and productivity, medical costs, administrative losses, and many more indirect costs.
3 hidden costs of workplace injuries every employer should know
1. Operational disruptions
When an employee is injured, it doesn’t just sideline them–it ripples across the organization. Other workers may need to stop what they’re doing to assist. Supervisors and HR staff will spend valuable time dealing with paperwork, investigating the incident, and managing workers' comp claims.
The injury may trigger a cascade of disruptions—reworking schedules, hiring temps, and rearranging job duties. Every hour spent dealing with the aftermath is time and money lost.
2. Loss of productivity and profit
Injuries impact productivity across the board. Whether it's an absence that forces others to take on extra work or an injured worker who returns with limited capacity, the overall efficiency of your workforce declines.
To fill the gaps, you might need to pay overtime or hire temporary workers—both costly solutions that also risk lower productivity. The bottom line? Injuries can slow your business down and cut into your profitability.
Days lost to injuries in 2022 totaled 75 million.
3. Rising Workers’ Comp premiums
Every injury affects your safety score or experience modification factor, which directly impacts workers’ compensation premiums. The higher your injury rate, the more you’ll pay in the future. A single incident today can drive up costs for years to come. By ignoring the risk of injury, you’re not just dealing with today’s costs—you’re increasing future financial liabilities.
Beyond the obvious: More costs you might be overlooking
- OSHA fines and legal costs: Serious injuries often trigger investigations, which can lead to fines, legal costs, and consultant fees.
- Equipment damage: Injuries sometimes come with equipment damage, and repair or replacement costs can quickly add up.
- Reputation damage: A poor safety record can hurt your brand, impacting relationships with customers, investors, and potential partners.
- Employee morale: Unsafe workplaces lead to disengagement, lower productivity, and higher attrition rates.
The solution: Prevent injuries before they happen
The most effective way to manage both direct and indirect injury costs? Prevention.
A robust safety program—complete with regular inspections, proper personal protective equipment (PPE), training, and employee engagement—goes a long way. Even better, tech-driven solutions like wearables, included as part of innovative workers' comp insurance, are revolutionizing injury prevention. Wearable tech is verified to cut injury rates in half, reduce lost work days, and save employers on workers’ compensation claims costs.
By investing in proactive safety measures, you protect your employees and your bottom line. The data is clear: prevention is the key to controlling the true cost of workplace injuries.
