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Is Incident Reporting A Waste Of Time?

Incident Reporting Is Not A Waste Of Time, But...

I can say with a lot of confidence that it isn't a waste of time to report incidents. But it can certainly feel like it. Depending on the maturity of your company's safety culture, the value in incident reporting just might not be seen. All the reporting and investigating can seem like a waste of time when compared to what employees and management could be doing. But, this way of thinking just assumes incidents will happen. Additionally, it probably isn't tracking and compiling just how costly the incidents are. If you take a good look at just how much money you're loosing by not tracking incident costs, well then it's easier to see why you might think incident reporting is a waste of time.

The Real Waste In Incident Reporting

Ironically, the real waste involving incident reporting isn't in the incident reports. Its the failure to perform thorough, effective investigation into what happened. From these investigations, effective corrective and preventative actions should arise such that the incident isn't likely to happen again. If you don't do this, the incident will probably happen again.

But, depending on how bad the incident was, just responding to it can take a lot of time, and thus money, away from production activities. This can be compounded by performing incident reporting, investigation, and corrective action determination. This will continue to be the case until the company realizes, in a dollars and cents kind of way, what incidents are costing them. This must be compared to what the reasonable cost of doing business (when things are operating as they should) actually is. So, lets take a look at how to put dollars to the incidents.

Put Dollars To The Safety Numbers

Although I'm using industrial examples, these concepts can be applied pretty broadly. How exactly you might accomplish this will depend on the resources your company has or is willing to obtain. Now, a company has a general cost associated with producing so much of a product. It's easier for me to visualize this in terms of a physical product, such as so many board feet of lumber, pounds of waste processed, etc. Things that go into that cost per so many products includes: labor (employees), energy (electricity, heat), raw materials, facility fees (lease), expected equipment maintenance, etc.

In the case of injuries, this will affect labor costs. Let's look at how that might be:

  • The injured employee was working but now is not. They are still on the clock for the moment.

  • Example of paying the labor cost but not getting benefit for the moment.

  • Supervision or emergency responders typically have other production related jobs that they were doing and now must be pulled from.

  • Drop in production related to what component of it the responders or supervision contributed.

  • Depending on the set up, production may require other positions to cover the job duties of the injured employee. Alternatively, that part of production may simply stop producing while dealing with this incident.

  • Loss of production means loss of an amount of income producing product while labor cost may be increasing due to overtime.

  • May have an overall net loss in production even with coverage if taking away from other active production lines or duties.

  • In order to comply with regulations and/or company policy, time must be dedicated to incident reporting. Time should also be given to incident investigation to get to the root cause of the issue.

  • Example of time potentially being taken away from production depending on the primary duties of the report writer.

  • Failure to comply with reporting requirements could lead to fines, which increase costs.

  • Even though you have workers compensation, there usually is a deductible on it. You pay out of pocket in one way or another until you reach the deductible threshold.

  • Example of paying for the costs associated with the medical treatment an injured employee may need prior to insurance taking over (effectively).

  • If an employee can come back, but not to full duty, the company gets less productivity from the employee. They are also responsible to pay up to full-time wages whether the employee works that many hours or not.

  • Example of an effectively part time employee being paid full time wages without full time work. This may be part of the deductible for workers compensation, and such deductibles can be very high depending on the company.

Are You Tracking Any Of This?

Well, are you? Have you considered all the ways that your company may have to pay for every incident that occurs? If not, well you might want to start. This doesn't include what might be paid for equipment damages and the costs to repair. When thinking "incidents/accidents just happen and are just a part of how business is done", I'd urge you to reconsider in light of the plausible, if not likely, examples given above. But how do you track all this effectively to be meaningful to decision makers?

Well, some companies make it a point to report their safety numbers, such as the total recordable rate (TRR) or the days away, restriction, job transfer rate (DART). The difference in the two is essentially how bad they are. TRR pertains to needing medical attention beyond first aid treatment. The DART is that plus any injuries that result in days away from the job (medically prescribed), job restrictions, or the need to transfer positions. There are some incidents bad enough that require timely reporting to OSHA, not just recording them in a log. If you want specific details on what Federal OSHA requires for recording and reporting, take a look here for recording, and here for reporting.

Now, wouldn't it be helpful to decision makers to have dollars attached to the TRR and DART rates? Now, it isn't distant hypothetical costs just looking at the safety numbers. These numbers show a clear relationship between how many serious incidents happened and how much they cost. Taking a deep dive into what incidents really cost might show that proposed safety improvements aren't so costly after all. If you wisely and effectively develop and implement solutions that keep the incidents from happening, all while allowing employees to do their primary production roles, well that's potentially a lot of costs being reduced.

Look At This As An Investment

Hopefully by now you have an idea that incidents are not some cheap occurrence that should just be treated as the cost of doing business. After getting real data to drive decision making, and investing in effective solutions to drive down incidents, you may find your profit margins starting to go up. This, as is often the case with investments, will have a return on investment time. But the less incidents that happen, due to effective corrective and preventative actions, well that's more time for producing products. Done right, you can increase your profit margins by increasing the revenue, while decreasing the long term costs.

As much as is feasible, solutions should not be designed with the "quick fix" mentality. These often are administrative controls that put additional burden on employees where they may already be overburdened. Design the immediate and long term fixes so that they work with how the employees need to do their job. Make the areas safe so they just have to worry about being productive. This reduces the chance of recurrence due to employees failing to adhere to administrative controls. It may not be all their fault, after all. It's a hard thing to do a lot of additional, seemingly unrelated safety tasks all while still being expected to maintain or increase in productivity. Gather the data on incident costs so can make good decisions on the bottom line.

Tip Of The Iceberg

You will probably find that it's fairly straight forward, though perhaps tedious, to get direct cost data. It's kind of in your face, in a way. Any medical bills, wage supplements, equipment repair invoices, and the like will have a readily accessible trail of what was paid and when. This should make justifying looking into what incidents cost you easier. However, there are also indirect costs that may be even more.

Indirect costs are often called the iceberg of costs, where direct costs are just the tip. This is because direct costs are fairly easy to see, as mentioned earlier. Indirect costs lie below the surface. They are your increases in labor costs due to having an employee who may be unable to work. They are the losses in production due to using employees that may not be as skilled in performing the work as the one who is now injured. This will be the time supervision spends reporting, investigating, and finding root causes to the incident. There can be others which depend on the specifics of your company.

In any case, once you get a handle on tracking, consolidating, and trending the direct costs with safety data like the TRR and DART, you will want to do the same for indirect costs. This will give the full picture of just how important reporting incidents is. You don't want to have incidents if you can help it. As you go through this fact finding endeavor, and putting meaning and dollars behind the numbers, you hopefully will come to the conclusion that it's just good business to be practically safe.

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