HSE medication

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Melting the Iceberg The cost of accidents
work-related ill health
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Karen Haefeli Cheryl Haslam Institute of
Work, Health and Organisations

• Roger Haslam
• Health and Safety Ergonomics Unit,
• Department of Human Sciences

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Presentation Overview

• Background
• Aims Objectives
• Phase 1 Focus groups
• Phase 2 Case-study survey
• Phase 3 Real-time accident costing
• Implications of research
• Questions / comments

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Background
Workplace injuries, work-related ill health and
non-injury events cost UK employers 3.5 - 7.3
billion a year (HSE, 1999) The cost to employers
has been highlighted in a number of promotional
campaigns designed to demonstrate the business
case for HS Based on assumption organisations
are primarily motivated by economic incentives
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• Few organisations make improvements to health and
  safety due to concerns about the cost of
  accidents / work-related ill health
• Attempts have been made to encourage
  organisations to start measuring these costs
• HSE - Ready Reckoner
• European Agency for Safety Health at Work

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Aims Objectives

• Explore perceptions of the cost of accidents /
• work-related ill health
• Investigate the extent to which companies assess
  these costs
• Examine barriers and attitudes towards measuring
  cost
• Determine whether collecting cost data in real
  time influences attitudes and working practices

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Phase 1 Focus Groups
3 focus groups with HS professionals from medium
and large organisations 6 individual interviews
with Managers and Directors from small and medium
sized firms Industrial sectors manufacturing,
construction, distribution, transport,
healthcare, education
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Phase 1 Findings
Awareness of costs incurred Most respondents
did not know how much either accidents or ill
health cost their organisations Small companies
focused mainly on the cost of absence Medium /
large organisations recognised time spent dealing
with incidents as a significant cost
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• Concern about the cost of accidents and
  work-related illness
• Concern tended to focus on POTENTIAL large scale
  losses rather than actual costs incurred as a
  result of more frequent events
• Main areas of concern
• Impact on insurance premiums
• Major disruption to production
• Possibility of being fined and prosecuted
• Potential cost implications of damaged reputation

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• Measuring cost of accidents and work-related ill
  health
• - 4 - cost of accidents
• - 1 - cost of work-related ill health
• Barriers to assessing cost
• Lack of time and resources
• Complexity
• Lack of expertise

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• Attitudes towards measuring cost
• Several HS professionals recognised the
  potential benefits of highlighting cost to
  directors and managers
• Higher up, I think they instinctively know the
  cost of accidents. Thats why theyre willing to
  support the HS community. The problem I have is
  at the lower level, local managers not realising
  the cost. Id like to give them something they
  can tangibly see and then they can realise the
  importance of health and safety.

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• Others felt that their organisations would not
  benefit from knowing the cost
• Low levels of accidents (small)
• Established safety culture (medium/large)
• For companies that have had a high focus on
  HS for a long time, youve got to look at other
  things as well. Working out the cost of an
  injury would just be another cost of that injury.
  If its not going to be a useful parameter to
  drive your HS management system, then you dont
  need to do it.

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• Other important drivers
• Potential legal implications
• (corporate responsibility and prosecution)
• Benchmarking against the health and
• safety performance of competitors
• Awareness of the impact of damaged
• reputation

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Phase 2 Case study survey

• 282 in-depth interviews
• 129 organisations (55 SMEs, 74 Large)
• 10 industry sectors
• Agriculture - Transport
• Manufacturing - Public Admin/Defence
• Construction - Education
• Distribution/Repair - Health/Social Care
• Catering - Other

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Phase 3 Real-time accident costing

• The final phase has involved providing companies
  with a tool to collect cost information relating
  to every accident/incident occurring over a
  specified period (ranging from 4 to 16 weeks)
• Every company that took part in phase 2 was
  invited to take part in phase 3
• 32 companies have provided accident cost data
• 3 small companies had no incidents
• 54 declined the offer to take part

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Phase 3 Method
Standard accident/ work-related ill health
costing forms were developed by the current
research team, based on previous HSE costing
methodologies Paper and electronic versions of
the forms were accompanied by guidance sheets to
aid completion of the forms The costing forms
were designed to capture every possible cost
relating to an incident, including both financial
and opportunity costs
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Phase 3 Definitions

• Any unplanned event that results in injury of
  people, or damage or loss to plant, material or
  the environment or loss of a business
  opportunity
• Opportunity costs - costs of labour paid for no
  production (E.g. value of time that an IP is away
  from their work as a result of an incident time
  that people are unable to perform their regular
  tasks, or focus on proactive work, because they
  are redirected to deal with the consequences of
  an incident)  
• Financial costs - additional costs incurred to
  achieve desired output (E.g. replacement labour
  costs, repair costs, fines and penalties)

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Phase 3 Contd
Although companies were provided with a standard
tool to collate the relevant cost information,
the actual process of form completion varied
somewhat between the companies Some chose to
include all incidents occurring within the
company, others decided to focus on just one area
of the business or location In most cases, the
local HS Manager/team was responsible for
completing the forms, local Managers were
responsible for the task in others
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Case study 1
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Implications
Findings from the individual interviews will
provide new and in-depth data on how
organisations actually view and assess the costs
of accidents and work-related ill health
research that has not been conducted before The
real-time accident cost data, collected within
organisations of varying size and complexity,
will provide an indication of the cost of
accidents over a range of industry sectors This
data will ultimately be used to update the
current HSE publication The cost to Britain of
workplace accidents and work-related ill health
(HSE, 1997)
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Benefits to organisations
Interviews allowed HS professionals and others
within a variety of organisations to share their
views on a range of important issues Companies
participating in phase 3 have been provided with
a usable tool to guide them in the collection of
accident cost data and the figures derived from
the study can be used to estimate the yearly cost
of incidents occurring within the individual
organisations The final report will allow
organisations to compare their own costs with
those occurring within other anonymous
organisations, both within and between
industries.
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Questions or comments?
Karen Haefeli Karen.haefeli_at_nottingham.ac.uk 011
5 846 7485