To cost justify your program, first you must calculate your current costs due to poor employee performance. Be sure to include INDIRECT costs like management time, overtime, rework, lost customers, to get the whole picture. Total up what you're spending now and show upper management how much they're losing.Find out how much in NEW SALES your company would have to make to generate enough BOTTOM LINE profits to cover those losses. Call us for help cost justifying your program if you need it. Some national statistics....
*Each lost time injury averages $27,000 in total costs
*Each Doctor Treated Injury averages $3,000 in total costs
*Reducing Absenteeism by 1% can save you TENS OF THOUSANDS of DOLLARS
*Each employee you lose costs you 30% of annual salary to replace & retrain.
COST JUSTIFYING A SAFETY INCENTIVE PROGRAM
Perhaps this information will help you a little bit with COST JUSTIFICATION. Follow this simple method to see how much your accidents are REALLY COSTING YOU (this method was developed by Dupont).
First, calculate your YEARLY accident totals....
NUMBER OF DOCTOR TREATED INJURIES:_______ times $3000=________ Total Cost.
LOST TIMES:_______ times $27,000=_______ Total LTI Cost.
Add both lines together and you'll have your TOTAL ACCIDENT COSTS!
COST JUSTIFYING AN ATTENDANCE INCENTIVE PROGRAM!
When someone isn't on the job, quality, productivity and EVERYTHING SUFFER! But, when someone's absent, you have to pay OVERTIME to replace them! THUS...
Every PERCENTAGE point of absenteeism you can REDUCE saves you $75 per employee per year (assuming your base wage is $8 per hour--if it's more, you save more!). So when Dorsey Trailers went from 7% absenteeism to 1.5%, THEY SAVED $350 PER EMPLOYEE. That means that their UNSCHEDULED OVERTIME COST dropped by... $350,000 in one year!!!!
TO FIGURE OUT HOW MUCH YOUR COMPANY IS LOSING FROM ABSENTEEISM, let's do a little math....Take your NUMBER of DAYS ABSENT and multiply it as follows...
(DAYS ABSENT times 8 times (your hourly wage) times .5)= EQUALS YOUR COST EVERY YEAR FOR ABSENTEEISM.
So for a plant with 2200 days of ABSENT WORKERS and a HOURLY WAGE of $8, it would work as follows...
2200 x 8 x $8 x .5= $70,400 in ABSENTEEISM COST for OVERTIME!!!!!
DETERMINING THE UNISURED COST OF AN ACCIDENT
Take a second and you'll be AMAZED at how much your accidents REALLY DO COST YOU! The National Safety Council calculates that every Lost Time Injury has a total cost of $27,000; every RECORDABLE is $3,000!
