Understanding OSHA's Safety Pays Tool

Are you trying to make the business case for safety to your C-suite, or even upper management? And as usual, you find yourself trying to crunch numbers to present an argument that management will take to heart.

What if we said there’s an easier way to present the business case for safety, courtesy of the Occupational Safety and Health Administration (OSHA)?

It’s all thanks to OSHA’s “Safety Pays” tool. Here’s what the tool is, how it works, and how it can help get your management team on board with safety.

What Is OSHA’s “Safety Pays” Tool?

OSHA’s “Safety Pays” tool is a free online calculator using data on workplace injury costs compiled from the National Council on Compensation Insurance. It leverages that data on your behalf to calculate the direct and indirect costs of an injury, as well as the additional revenue you would need to offset these costs.

It covers no less than 40 different types of injuries and illnesses, from amputations to cancer to freezing to poisoning (three different types of poisoning, actually).

The process is simple.

• First, select an injury type from the drop-down menu. You can also enter the total workers’ compensation costs spent on that injury.
  
  
• Second, enter your profit margin. You can leave the spot blank if you want to use a default margin of 3%.
  
  
• Third, enter the number of injuries. The default is one, so if you’re trying to calculate one injury, leave the space blank.
  
  
• Fourth, select “Add/Calculate” and take a look at the various estimated total costs in the next section down below. If you want to add additional injuries to the list to show the cost of your injuries for the year, simply repeat the whole process rather than clicking “Clear”.

Et voila: a clear, easy-to-understand estimate of how your workplace injuries are hurting your bottom line. Want to give it a try? Click here to test it out for yourself.

Background of Cost Estimates

The numbers provided by the calculator use average estimates from the National Council on Compensation Insurance (NCCI). Data used to reach your numbers reflects the average numbers seen on insurance claims and statistical reports for policy years 2013 to 2015.

NCCI manages the country’s largest database of workplace compensation information and uses that data to analyze industry trends and provide a variety of recommendations to maintain a healthy workplace compensation ecosystem.

The indirect cost estimates are derived from Improving Construction Safety Performance, a publication of the Business Roundtable, and are based on a study conducted by the Stanford University Department of Civil Engineering.

Indirect costs include things like wage losses not covered by workers’ compensation, lost productivity due to work rescheduling, overtime costs, administrative costs, etc.

Making the Business Case for Safety

We know that making the business case for safety is no easy task, especially when you’re trying to convince reluctant executives. That’s why OSHA’s “Safety Pays” tool is so important for safety teams trying to deliver the message.

And for everything else, our safety software can help, bolstering data visibility across your whole organization so your safety team can make informed decisions. Want to see it in action? Get in touch today to learn more.