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Hidden costs of workplace injuries and how to reduce them

Published 05 August 2021

Workplace injuries costs

A workplace injury can have significant impact on the person involved, the rest of their team and the business more broadly, and these can far exceed the individual worker’s loss of productivity. Drawing on the Gallagher Bassett  article ‘The Hidden Costs of Workplace Injuries for a Business’ we look at the wide implications of workplace injury incidents, with input from our Gallagher Workplace Risk experts. 

Affecting 4.2% of employees a year Australia’s workplace injury rate is double that of the United States at 2.8%. it’s in employers’ interests to reduce this incidence, not only to keep workers safe but also in terms of cost savings. 
Costs include direct expenses such as workplace injury lawsuits and increased insurance premiums, but workplace injuries can also trigger hidden costs, depending on the types of injuries, recovery times and the impact on your business. 



Time off work

The paid time off work for the injured employee costs businesses in two ways: continuing to pay the injured worker’s wages during their recovery and reduction in productivity/hiring a temporary replacement. 


Reduced productivity

The injured employee’s colleagues and witnesses to the accident can also be affected by the disruption both at the time of the incident and afterwards, both emotionally and in practical terms. 
Losing the team member’s specific skills can also cause an imbalance in working synergistically or a loss in efficiency. There may also be a drop in morale among your staff, which can also affect productivity.


Potential overtime pay

Employee absence can create delays on time sensitive projects, necessitating paying overtime rates to workers making up the shortfall. If the injured employee is unable to return to work for an extended period these costs can mount up. 


Training costs

In some situations you may need to hire a new or temporary employee to fill in for the injured one, involving hiring costs as well as training, either by an external provider or in-house. Even with training it may take some time for the replacement to get up to normal speed.


Paperwork and administration 

From documenting the incident to filling out compensation claim forms, a workplace accident requires time and paperwork to record and respond to the incident, another indirect cost to the business.


How Gallagher Workplace Risk experts can help businesses reduce potential costs

At Gallagher Workplace Risk, we believe that incidents and injuries are preventable. Our team of experts in safety prevention, workers’ compensation and education and training have decades of experience in helping clients to reduce compensation claims costs, workplace injury frequency and facilitating return of injured workers safely to their workplace. 

The Gallagher approach is based on partnering with clients across these three distinct focus areas:
1. Safety and incident prevention ‒ to review safety management systems, incident data and workplaces as part of proactively identifying hazards and providing recommendations for practical measures that effectively mitigate risk, aligned with the business’s capacity for investing in interventions. This includes due diligence briefing for officers and directors, safety strategy and risk management workshops for senior leaders and development of procedures and training guides for frontline workers. 
2. Workers’ compensation ‒ our advisory service includes both insurance and injury management. Our consultants can also help businesses meet the most recent regulations and deal with factors impacting premiums across self-insurance and conventional schemes.
3. Occupational therapy – as allied health professionals our therapist consultants can help to limit time lost to injury, through proactive rehabilitation strategies and direct engagement with treating practitioners. Using a range of interventions, including functional capacity assessments and job task evaluation, our therapists proactively advocate with GPS and insurers for increased capacity where appropriate.


Education and training available through Gallagher Workplace Risk

Our education servicesare aimed at preventing workplace incidents before they occur and mitigating their effects through preparedness.

  •  Innovation is a key aspect in our education and training experience, where we have provided our clients with new ways of inducting and communicating hazard information. 
  • Our team provides induction and training modules for an online immersive 360 degree view experience and a chance to test competency through different risk choices for the viewer.
  • Our facilitated programs are based on industry best practice and using our experience in different industries to tailor an individual approach for clients. 
  • Finally, our most popular offering is delivering mental health awareness and mental health first aid sessions to help workplaces deal with the emerging impact of mental health illness and injury.

To access our expertise in reducing workplace injuries and impacts in the workplace connect with our Workplace Risk specialism now.

Further reading


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Gallagher provides insurance, risk management and benefits consulting services for clients in response to both known and unknown risk exposures. When providing analysis and recommendations regarding potential insurance coverage, potential claims and/or operational strategy in response to national emergencies (including health crises), we do so from an insurance and/or risk management perspective.
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