The business case for adopting best practices in health and safety is compelling to say the least.

The daunting challenge that most organizations face today is how to produce more with fewer resources for customers who relentlessly demand more for less. In addition, you not only have to be concerned about competition from business down the street, but from business all over the world.

Today’s brutally competitive global economy has given a whole new meaning to the Darwinian phrase, survival of the fittest, as saving-savvy employers quantify the impact that employee health and safety has on their bottom line.

The Association of Workers’ Compensation Boards of Canada (AWCBC) publishes accepted time-loss injuries and fatality reports under the National Work Injuries Statistics Program (NWISP)

NWISP reports that direct Disability and Time-Loss in Canada averages 7.4% of payroll cost and the average time-loss per employee is 11.5 days.

Now, just look at what time loss costs a small company with only 20 employees and a modest payroll:

• The total number of working days lost per year is 11.5 X 20 = 230 days lost
• Average gross salary = $45,000
• Gross daily rate = $180.00 per day (Average gross salary ÷ 250 working days)
• Cost per year is 230 days X $180 = $41, 400.00. And that’s just the obvious, direct cost of time loss for a company with a modest payroll and only 20 employees!

Now, do this simple math to calculate your own company’s annual cost of time-loss:

11.5 X (# of employees) X (Average gross salary ÷ 250)

But what are the total damages with all the indirect or hidden costs of time-loss included?

Hang on to your hat, because it’s the indirect costs that really kill you!

Exactly how does time-loss impact productivity in your operation? Think about these questions very seriously for a moment:

1. How does time-loss affect the morale and productivity of burned out employees who have to continually pick up the slack?
2. How do sickness, injuries and absenteeism diminish customer service?
3. What is the average lifetime value of every customer that you lose?
4. What does it cost to replace a lost customer?
5. What is the extent of the damage to your company’s reputation knowing that a disgruntled customer will tell, on average, 11 other people about their bad experience with you?
6. How much new business is potentially lost to a competitor when you’re short staffed?
7. What’s the cost of employee turnover?
8. What’s the cost of training a replacement?

When you factor-in the many hidden costs of time-loss, the final tab can easily climb as high as 10 times your company’s average gross salary! This may seem hard to swallow but it’s no exaggeration. It’s an indisputable managerial cost accounting fact, and it explains in part why some former titans of industry went broke. The joke that the big three automakers were better providers of health care than automobiles is no laughing matter.

Don’t think for a moment that what happened to auto giants like Chrysler and GM can’t possibly happen to your company, because it most certainly can. If left unabated, time-loss will drain the lifeblood out of your company. It’s precisely because so many of the costs of time-loss are both staggering and hidden that companies without an effective OHS and Return-to-Work program run into serious financial trouble. It’s relatively easy for these costs to spiral out of control because, unlike your workers’ compensation insurance rates, they aren’t readily seen or as easily measured.

What’s the next step?

Ask us to show you what several of our clients have already discovered, namely, how to minimize your company’s time-loss costs and maximize its discount on workers’ compensation insurance. It will be the greatest return on investment you will ever receive in your business. That’s a promise!

You should also know what the extent of your personal legal risk is given the way your company is currently operating. We can tell you this too. But in the mean time, you would be wise to check out what Bill C-45 has to say about you and Due Diligence. You may be very glad one day that you did.