Executive Summary
Contemporarily, many countries across the world grapple with the problem of workplace accidents and illnesses. The negative consequences of these occurrences have triggered the establishment of measures, which are often very costly, both at national and organizational levels. This report seeks to explore these negative consequences in a bid to understand why governments and organizations invest time and resources to abate the accidents and illnesses. Workplace accidents are reported all over the world including in advanced countries like the US where they account for huge negative costs on the national economy. They vary in severity, but despite the level of severity, accidents at all levels bear negative economic impacts (Mazzolini 3-16).
This negative aspect of workplace accidents also applies to workplace illnesses, which often come from workplace accidents. The negative impacts manifest in the form of direct and indirect monetary costs for concerned organizations and consequently the national economy. Direct costs may take the form of compensatory fees or legal and administrative costs alongside lost earnings. The indirect costs mostly take the form of a negative image for the concerned organization (s). All these consequences when combined translate to huge costs, which for-profit organizations cannot condone. It is thus necessary to curb the negative via national and organizational policies, which espouse strict adherence to workplace health and safety measures. At the organizational level, a bit of creativity can heighten the extent of employee adherence to these policies, and thus they should be adopted.
Introduction
Countries across the world endeavor to reduce workplace health and safety hazards to the least possible. On one hand, the need to improve working conditions as advocated by human rights activists and other welfare organizations has inspired the need for workplace safety and health. On the other hand, the move towards better working conditions for employees in organizations hinges on the findings of empirical studies that have widely been conducted to determine the effects of poor working conditions on employee performance. Even in circumstances where the cost of a possible accident is estimated before its occurrence, the consequential cost often transcends what may be envisaged for consequential costs incorporate the cost of lost workdays, disrupted production, administrative costs, legal costs, and bad publicity (Mazzolini 3-5). In a bid to avoid the heavy costs that accompany workplace accidents and diseases, organizations have increasingly embraced workplace best practices. Notably, the requirements for compliance with the requirements of workplace safety and health standards call for considerable investment by organizations. Interestingly, most organizations choose to incur the costs and invest heavily towards making the workplace safe and healthy for workers. This report explores the negative effects of accidents and diseases on the wellbeing of for-profit organizations in a bid to understand why such organizations choose to invest in workplace health and safety.
Workplace Accidents
Workplace accidents are critical occurrences that impair the work function of employees physically or emotionally, which affect organizations negatively. The negative effect on the organization stems from the fact that accidents cause illness, disabilities, and in acute cases death of employees. Mazzolini (2) notes that most workplace accidents cause only minor injuries with insignificant consequences; however, a considerable number of casualties suffer long-term complications or permanent impairments. Workplace accidents are reported all over the world including in the developed world contrary to the notion that they are only prevalent in the developing or middle-income countries in which organizations still have difficulties with adhering to world-class health and safety requirements. For example, in 2012, the US, which is among the most advanced countries in the world in economic as well as technological terms, recorded about three (3) million mild workplace injuries and diseases within the private sector (U.S. Bureau of Labour Statistics Para. 11). This figure is conservative for it only features cases within the private sector.
The occurrences of workplace accidents come in different forms and at different levels as already hinted. The simplest approach to the classification of these accidents is to base the classification on their severity. Using this system of classification, the most common categories of workplace accidents are minor accidents or accidents that cause minor injuries, reportable accidents (those that cause enough injury that is considered worth reporting for purposes of seeking compensation), and fatal accidents (those that cause fatal injuries and even death) (Richardson and Impgaard 175).
An alternative system of classifying workplace accidents also proposes three categories of classification namely First Aid Injuries (FAI), Lost Time Injuries (LTI), and Medical Treatment Injury (MTI) (Hoskins 31). A first aid injury is that which only requires first aid treatment to enable the casualty to resume his/her normal job activities. Injuries classified in this category include minor scratches and cuts among others. Lost time injuries compel the casualties to spend at least a day or shift away from work to recover before resuming work. A medical treatment injury is one in which the casualty has to undergo treatment under the auspices of a physician. The outstanding feature of this category of injury is that a physician must be involved in administering the medication required to recover from the injury (Hoskins 31). Examples include treatment, surgical debridement, and sutures among others.
The bulk of workplace accidents in the US occur in the service industries. In 2012, 75.2% of total workplace injuries occurred in the service industries, which employ over 80% of the private workforce (U.S. Bureau of Labour Statistics Para. 6). This aspect shows that the service industry employees are more prone to workplace accidents as compared to their manufacturing industry counterparts. However, the number of accidents that occur in the manufacturing industries is also considerable. These figures pertain to the private sector, but the incidence in the US public sector is higher than in the private sector. In the public sector, the incidence rate of workplace injuries was 5.6 cases for every 100 full-time employees, which is almost double that recorded by the private sector, which stood at 3.2 cases for every 100 full-time employees (U.S. Bureau of Labour Statistics Para. 9). This observation implies that the aforementioned figure of about 3 million cases of workplace injuries and illnesses in the private sector could translate to over 5 million cases in the public sector thus giving about 8 million cases of workplace accidents and illnesses in the US in 2012. In essence, workplace accidents are prevalent across the world.
Diseases at the Workplace
Apart from the problem of workplace accidents, which continues to plague many industries across the world, workplace illnesses, which often go together with the accidents, are also part of the workplace predicament many countries continue to grapple contain. In most cases, workplace illnesses are caused by workplace accidents. However, a considerable number of cases originate from unfavorable working conditions. Nonetheless, they contribute significantly to presenteeism (being present at the workplace, but not working at full capacity), absenteeism, and employee turnover as witnessed in many organizations (Mazzolini 8).
As aforementioned, some workplace illnesses come from workplace accidents. This category of workplace illnesses is often physical because they come from injuries such as cuts, fractures, or scratches (Mazzolini 9). The degree of seriousness of such illnesses is pegged on the degree of fatality of the accidents that cause them. This assertion implies that like workplace accidents, illnesses too can be classified into minor, reported, or fatal categories. The alternative classification used for classifying workplace accidents is also applicable to the illnesses because some may only need first aid, others need an employee to take some time off, and others require serious medical attention from physicians.
Apart from workplace illnesses that emerge from accidents at the workplace, there is another category of illnesses such as stress, depression, and other chronic conditions that may be caused by the nature of work that an employee does or the working environment. Sullivan et al. (8) note that workplace stress occurs when an individual is unable to harmonize the conflicting job demands and personal life issues alongside other issues such as job insecurity or low remuneration among others. Stress in itself may not be a problem unless it reaches levels where it directly affects the quality of employee output. However, the complications that accompany it such as heart attacks and hypertension are the main issues of concern in the workplace.
Thus, as a workplace illness, stress is multifaceted and it has a wide range of consequences. Depression is another emotionally triggered illness that has the potential to affect employees adversely at the workplace. Like stress, depression may also be a result of work-related matters as well as personal non-work related matters. Depression causes notable levels of work function impairments, which worsen over time as victims who seek medical attention often receive treatment for their physical symptoms leaving the main cause unaddressed (Sullivan et al. 46-60). In effect, the productivity of the affected employees undergoes a continuum of decreases until they cannot work anymore if the cause of their problems is not properly diagnosed and addressed.
Business Implications of Accidents and Diseases
Accidents and illnesses in the workplace affect the productivity of employees and consequently the performance and profitability of an organization or a business. The effects of accidents and illnesses manifest directly or indirectly in different harmful ways to the organization. However, the most serious effect of workplace accidents and illnesses come in the form of financial costs. Mazzolini (2) notes that the costs associated with accidents are both direct and indirect. In the direct sense, the costs include medical care costs, rehabilitation costs, and loss of income. The income losses in question here include the loss of gross income by the employee due to absence from work as well as the loss of income that an organization would earn from the work of the affected employee. In the indirect sense, Mazzolini (2) notes that the costs are slightly difficult to measure in monetary terms. They include the likelihood of future unemployment due to inability to perform some tasks on the part of the affected employee or worse still, negative health effects manifesting later in life. This aspect may result in permanent disability or chronic conditions that come about due to workplace accidents.
Sullivan et al. (8) consider the costs associated with accidents and illnesses at the workplace to be more than can ever be estimated before the accidents occur. The estimation approach considers both direct and indirect costs all at once and the costs it identifies include the cost of lost workdays, disrupted production, administrative costs, legal costs, and bad publicity (Sullivan et al. 8). All these costs collectively include the costs of insurance covers for employees, compensation, legal tassels that often ensue after such accidents, and other miscellaneous costs, which cannot be directly identified but are incurred in the process. Workplace accidents and illnesses are not good for any organization as empirical studies that have been conducted across the world to estimate the actual costs in monetary terms reveal that huge sums of money are lost. A study that was conducted in 2006 in Ireland to determine the costs and effects of workplace accidents showed that Ireland loses an estimated €3.3 and €3.6 billion per annum. The study indicated, “Median losses amounted to approximately €10,000 for each accident. The highest proportion of this €10,000 was extra salary costs averaging approximately €3,000. Productivity losses averaged approximately €1,700 and repair costs averaged approximately €2,000. Court costs were approximately €10,000 for each relevant accident” (Sullivan et al. 7).
In Britain, between 2009 and 2010, an extrapolated £5.4 billion was lost to workplace accidents and illnesses (Mazzolini 2). The costs were distributed between the casualties and employers. The money was directed to medical costs, legal costs, and so on due to the occurrence of workplace accidents. Trends have been similar in other countries across the world. For instance, the US reports similar statistics in its labor market. In a 2012 survey by the US Bureau of Labour Statistics, it was established that more than 50% of about 3 million cases of workplace accidents and illnesses in the private sector were serious (U.S. Bureau of Labour Statistics Para. 4). Such occurrences required the affected employees to spend some time away from work to recover. The 3 million cases that were reported by the private sector came from an incidence rate of 3.2 cases for every 100 full-time workers (U.S. of Labour Statistics Para. 9). The cost implications of these figures are high and unwelcome as they take up funds, which would otherwise be invested elsewhere.
The same logic applies to the case of businesses and organizations in which the accidents occur. Mazzolini (2) points out that the casualties and their employers cater for the costs; however, this aspect denies the economy funds that would be injected into some productive channels. Businesses are primarily concerned with making profits. In essence, every activity that a business engages in is normally aimed at improving its productivity and consequently its earnings, which means that additional expenses that come in the form of covering workplace accident costs boil down to reducing the profits of a business. This element makes workplace accidents and illnesses a non-welcome scenario in the business realm.
A different perspective on the issue of earnings and costs associated with workplace accidents and illnesses is that employees involved in the accidents, depending on the severity of the accident, may sustain permanent injuries or disabilities that in the long run bear negatively on their efficiency and hence productivity. A chronic condition from an accident leads to impaired production of the affected employee (Richardson and Impgaard 177). Under such circumstances, the employee may continue working, but the level of productivity will be way below the normal operational capacity. Such a scenario affects the efficiency of an organization especially if several employees in the workforce are suffering from such a condition. Disability also affects the work function of an employee in the sense that the employee is unable to carry out some tasks that were initially within his/her capacity to accomplish (Richardson and Impgaard 177).
Like in the case of chronic conditions, which come from accidents and illnesses, the organization suffers from reduced productivity and consequent losses of income that result in inefficiency. Illnesses may directly cause an employee to be unable to cope with job demands and interfere with productivity. However, in most cases, these illnesses lead to other conditions such as coronary disorders and hypertension, which cost organizations directly through compensatory changes and indirectly through reduced productivity or loss of productive and reliable employees (Sullivan et al. 8). Such losses eventually translate to negative financial implications for business organizations.
Conclusion/Findings
This report sought to explore the negative effects that workplace accidents and illnesses have on the well-being of business organizations. Workplace accidents and illnesses have a significant negative financial and non-financial impact on the wellbeing of all organizations in which they occur. For instance, the national labor statistics published about several countries across the world indicate that a significant loss of earnings emerges from workplace accidents and illnesses (Mazzolini 3). The negative aspect of these occurrences stems from the fact that they take up funds that would otherwise be channeled elsewhere to influence the overall economy positively. In the business sense, organizations suffer negative image problems alongside direct monetary costs in terms of compensatory fees and foregone income and indirect costs in the form of reduced productivity and efficiency when employees’ work functionality is altered by workplace accidents and illnesses. When all the negative impacts are combined and considered in monetary terms, they translate into huge potential losses for organizations. Such a scenario directly cuts down the profits and proceeds to trigger a series of other events, which amount to reduced overall earnings for the organizations. In this sense, workplace accidents and illnesses are not good for business organizations at all.
Recommendations
In a bid to curb these costs, national governments and organizational leadership must ensure that every necessary measure is put in place. This goal can be achieved through the following means.
- At the national level, legislation should be enacted to guide workplace health and safety campaigns (Mazzolini 25-27). In most cases, countries have workplace health and safety policies, but they lack strict means of ensuring that the policies are adhered to, which should be an issue of primary concern
- For organizations, there is a need to ensure that compliance with existing legislation is strictly observed. Additionally, every organization should have a functional internal health and safety policy that strictly ensures that employees adhere to health and safety measures. Programs such as reward schemes for policy adherent employees and punitive measures for non-adherent employees can assist organizations in this sense.
Works Cited
Hoskins, Anne. “Occupational injuries, illnesses, and fatalities among women.” Monthly Labour Review 12.8 (2005): 31-37. Print.
Mazzolini, Gabriele, 2010, The economic consequences of accidents at work. Web.
Rikhardsson, Pall, and Martin Impgaard. “Corporate cost of occupational accidents: an activity-based analysis.” Accident Analysis & Prevention 36.2 (2004): 173-182. Print.
Sullivan, Carl, Elaine Seymour, and Rosemary McDermott 2007, The costs and effects of workplace accidents: Twenty case studies from Ireland. Web.
U.S. Bureau of Labour Statistics. Workplace Injury and Illness Summary, 2013. Web.