The costs of workplace incidents can’t be underestimated by any company, or there could be severe consequences. Despite this, there are some that are often overlooked by modern leaders, but that can be extremely damaging to any business. From extra recruitment and training costs to additional administrative overheads, here are some common examples.
Table of Contents
Reduced Employee Morale
The workforce is everything when you have even one worker, and there is no substitute for skill and competence. However, a major incident that causes harm to the point of facing a personal injury case can severely impact the staff. When your business doesn’t address the situation and take the necessary steps to address a genuine case, employee morale can take a hit. As such, employees can feel that management prioritizes money over lives, leading to disengagement.
Extra Recruitment and Training Costs
One of the highest costs of hiring someone is the initial recruitment funding, such as paying an agency or professional recruiter to find skilled workers, and the additional training and onboarding process. These can add up to a substantial amount that often surprises new business owners. However, these can be made worse by a workplace incident, especially if a skilled and reliable worker needs to take extended time off due to something preventable.
Downtime Costs of Workplace Incidents
Downtime is the enemy of most businesses, especially manufacturing and production. However, even for a small business, the cost of IT downtime can be as high as $9,000 per minute! This is just one reason why it is time to take security at your business seriously and address issues such as network management and cybersecurity. But what about operations? An initial stoppage might mean employees take on unfamiliar tasks that can also require double pay and overtime.
Additional Administrative Overheads
The aftermath of an incident in the workplace doesn’t end when the injured employee goes to the ER. In fact, that is just the beginning of the work that needs to be done. Aside from the legal issues the business can face, the process of internal documentation and investigation begins. HR and admin teams must put together a comprehensive report for external bodies such as OSHA regulators and attend many meetings about the case, at high cost to the company.
Potential Reputational Damage
There are some things more important than money in business. When an incident happens in the workplace, word gets around. So aside from the potential monetary losses, there is the problem of reputational harm. Why is this so bad? Money can always be made, but it is much harder to regain trust when it has been lost, including internally from workers and externally from clients, suppliers, and regulators. And then there’s the problem of handling investors!
Summary
Reduced employee morale is one of the highest costs of workplace incidents that are overlooked by some managers. Of course, there’s also the potential for extended downtime, and the further harm caused extends beyond revenue and into the realm of losing valuable trust.
