Healthcare and safety costs are unavoidable expenses for any employer. The UK has strict rules for compliance to these guidelines. Employers often find it tricky to adhere to these regulations, which end up hurting their businesses.
You don’t have to be afraid of strict rules. If you only understand how these regulations work, it will be easy for you to comply. Let’s understand the basics of compliance for health and safety costs that you have to incur.
The various costs involved
You will have to focus on two types of costs- human and financial.
Financial costs are incurred when an employee suffers an injury or illness. It is the absolute financial liability that will land on your shoulders in case an employee suffers. Human costs are costs borne by the sufferer due to his injury or illness. In case of an injury, the cost borne by your employee is the human cost while the cost borne by you is the financial cost.
In 2015/16, 528,000 people reported a case of ill health which they attributed to their working conditions. Meanwhile, 622,000 people were injured at work. In 2014/15 alone, employers paid a collective of 14.1 billion pounds as human costs and financial costs, of which 9.3 billion pounds were spent on workplace illness claims alone. These are huge numbers and a business’ financial costs can increase rapidly if these trends continue.
To put this into perspective, we distributed them into various categories. The human, financial and government contributions were 8 billion, 2.8 billion and 3.3 billion pounds respectively. While fatal injuries make business pay an average of 106,544 pounds, non-fatal injuries could cost at least 1,232 pounds.
How to save costs
We talked to access platforms suppliers Nifty Lifts, who help UK workplaces to handle compliances with health and safety procedures. They also help businesses in determining the cost of mishaps for a company and ways to mitigate the expenses arising thereof. In addition to using such service providers, if you had access to on-site clinics (like Eden Health, for instance), you could probably reduce medical costs incurred from workplace accidents and other cases requiring immediate medical attention.
That said, here are a few costs that can easily be saved if you only follow the required compliance guidelines.
- Paying absent employees
- Costs of overtime for employees that cover the workload of the absent employees
- Loss of profits because of lower output
Apart from the direct costs involved in the process, there are many indirect costs that are involved in the process too.
- Cost of hiring a new employee and getting them adopted to the job profile
- Diminished quality of product/service because of absence of regular employee.
- Continuity problems or potential losses.
- Expenses occurred due to recruitment of temporary staff or contract workers.
- Training and support to new/unskilled staff
Does insurance work?
Insurance can help you cover a few costs related to illness and injuries at workplace. However, it fails to cover for sick pay, damage to products and loss materials and compensation for lost time. This is not all. Cost of repairs for machinery and equipment, production delays, legal costs, loss of reputation etc. are not covered by insurers.
Therefore, the simplest way to save your costs is to ensure that your workplace complies fully with the health and safety regulations. Failure to do so will not only make you pay thousands of pounds but will also be increasing your insurance premium.