If your company has a high-injury incidence rate, you probably pay a significant sum of money for workers' compensation. In addition, many hidden costs associated with injuries and illnesses significantly increase the total cost. These hidden costs include:
Slowing of production due to lost time.
Lower productivity from replacement workers.
Damage to facility, equipment, raw materials and finished products.
Clerical and administrative costs of claims processing.
The situation does not have to remain this way. There is a solution, and the Division of Education and Training is ready to help.
Companies that have fully embraced and implemented a proactive safety and health program management system have reaped the benefits tenfold.
One such example of the many success stories is the Alumax-Aluminum Division in Magnolia, Ark. When the company decided to prioritize its safety and health effort in 1991 and apply for the Voluntary Protection Program, its workers' compensation costs were $713,766. In 1995, its workers' compensation costs were $66,522, a 90-percent reduction.
Similarly, the Nicolet Paper Co. in DePere, Wis. reduced its costs from $59,111 in 1992 to $18,930 in 1994, a 70-percent reduction.
In addition to these significant economic benefits, employers have reported side stream advantages such as decreased absenteeism, higher morale among employees, a feeling of ownership among employees and an enhanced relationship between labor and management.
Vanity Fair Mills in Milton, Fla. realized a 26-percent decrease in absenteeism from 1991 to 1994. Winpak Portion Packaging in Chicago, Ill. experienced a drop in absenteeism from 6.4 percent in 1993, to 1.86 percent in 1995 (more than a 70-percent decrease).
To compete in today's global economy, companies must achieve better cost savings, enhanced productivity and higher quality production. Implementation of an effective safety and health program management system is one crucial element in becoming or remaining highly competitive in today's market.
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