The Economics of Employee Safety Training

How saving lives saves money

Economics of Employee Safety Training

Let’s face it: not everyone gets excited about employee training. Employees themselves often dread it. On the other side of things, upper level management and executives are often more focused on the bottom line and keeping costs low. Fortunately, looking at the economics of employee safety training reveals that there are plenty of ways to discuss the importance of a good onboarding program while simultaneously focusing on your company’s finances.

The primary consideration with any safety training is how well it prepares employees for the hazards associated with performing the many tasks demanded of them. Specifically, it should focus in on those dangers that are most prevalent and that are most likely to cause an injury, and it must convey this information in ways that ensure employees are able to retain it.

However, there is a second side to the safety training discussion. It’s no secret that successful employee onboarding costs money, and it’s also no secret that executives don’t want to spend any more money than is necessary. For this reason, it is important to be able to explain the economics of employee safety training and the financial upside to developing and implementing a strong onboarding plan.

Fortunately, there are a number of statistics that readily demonstrate that value in concrete terms. According to this article on OSHA’s website, 60% of chief financial officers in one survey reported that every $1 invested in injury prevention saves the company $2. That same article also shares the story of one company that saved $1,000,000 over the course of 5 years with an investment of only $50,000 into their employee safety training programs and safety improvements.

The NSC relates similar findings on its own website. In this document posted there, they share a number of statistics demonstrating the financial value of effective safety training programs. Of particular note is the fact that on average, each employee lost-time injury costs a company $37,000. Multiplying that figure by the number of injuries your company has per year shows how much money is going toward injuries, and will provide a good estimate of how much is at stake and what a good safety training program would be worth.

The same document from the NSC goes on to state that each employee fatality, in addition to the invaluable life that was lost, costs a company $1,390,000. A new employee training program that would save only one additional life per year, then, is financially worth pursuing provided that it costs less than $1,390,000 to implement. Adding in any additional lives saved or injuries or illnesses prevented, and it becomes clear that an effective onboarding program is well worth its weight in gold.

 

Stay tuned for more posts on the economics of employee safety training. 

Or, for more information on Successful Employee Onboarding, see our other blog posts.