The Systematic Accident Cost Analysis (SACA) project is a research project carried out during 2001 by The Aarhus School of Business and Pricewaterhouse Coopers Denmark with financial support from The Danish National Working Environment Authority. It empirically tested a method - the SACA method - for evaluating the visible and hidden costs of corporate occupational accidents. It also focused on whether the registration, processing and reporting of these costs could be integrated in the corporate accounting information system. The project was based on case studies in 9 Danish companies within 3 different industry sectors. The main conclusions are that only 2/3 of the costs of occupational accidents are visible in corporate accounting systems while 1/3 is hidden from management view. The highest cost of occupational accidents for a company with 3.600 employees was estimated to approximately $682.000. The integration of occupational cost calculations into accounting systems such as SAP R/3 is considered unlikely for the relatively small Danish companies although technically possible. The costs of doing this and the subsequent costs of registration and control are considered prohibitive. A way forward could be to periodically analyze the costs of occupational accidents and develop standard cost estimates for use in assessing company costs of occupational accidents.
Besides causing pain and suffering occupational accidents cost money. The European Agency for Safety and Health at Work has estimated that 4,6 million occupational accidents happen every year in the EU resulting in 146 million lost working hours (EU OSHA 2001). This means that approximately 2,6 to 3,8 % of the collective EU Gross National Production (GNP) is lost every year. If occupational accidents could be prevented this would be avoided.
Occupational accidents also create costs for the companies in which they happen. Costs which are by their very nature non-value added - i.e. they have a negative impact on the corporate value creation. It thus seems logical to conclude that preventing occupational accidents, apart from being ethically right, makes good economic sense both for business companies and society as a whole. Identifying the costs of occupational accidents illustrates the benefit of the corporate occupational health and safety effort in terms of costs that could be avoided if accidents are prevented. In modern companies this could increase the organizational visibility of the Health and Safety department and illustrate its contribution to corporate profitability. As such, occupational accidents cost calculations do not lead to fewer accidents per se. However, this information adds an important dimension to traditional accident cost statistics and can in conjunction with these statistics motivate managers to increase focus on accident prevention (Dorman 2000).
Evaluation of the business costs of occupational accidents has been the subject of numerous research projects in the past. Dating back to the 1920s a study by Herbert Heinrich documented that the costs of occupational accidents in American companies were substantial and that many costs were hidden from the view of management (Heinrich 1959).
