Presentations to management on the costs of worker injuries and illnesses can be attention-getting and convincing, provided the data are plausible and can be supported with suitable references. Unfortunately, little research and hard data exist to support the frequently used ratios of indirect to direct costs that appear in safety-related literature.
Furthermore, as in the sources cited by this article, the elements included in direct and indirect cost categories may differ (Heinrich, 1931; Grimaldi & Simonds, 1989; Leigh, Markowitz, Fahs, et al., 1997). And, the ratios in those sources are invalid because the direct costs of accidents have increased in re-cent years at a pace far greater than in-direct costs.
This article discusses the author’s review of select data pertaining to indirect and direct accident costs. Computations are made in order to update a ratio re-ported in a plausible research study in order to approximate the current ratio of indirect to direct costs. In addition, the author discusses the inappropriateness of the "additional sales needed" argument to cover total indirect and direct accident costs.
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