The Indirect Costs Of A Worker's Compensation Claim
Business owners know that keeping their employees safe and secure is important. Unfortunately, accidents do happen. The worker's compensation program is designed to allow injured workers the opportunity to seek financial aid after an injury, but paying out an employee is not the only cost associated with a worker's compensation claim.
In order to help you better prepare for the burden a worker's compensation claim can place on your business, here are three indirect costs you might face after a claim is filed in the future.
1. New Employee Training
Each employee plays a vital role when it comes to business operations. When one of your employees becomes injured, he or she must be replaced in order to maintain production. One of the indirect costs associated with a worker's compensation claim is training new employees.
Recent studies show that the cost of hiring and training an individual to replace an employee who makes $8.00 per hour is $9,444.47. This cost must be absorbed by your business, and it needs to be considered when calculating the financial impact a worker's compensation claim will have on your company's bottom line.
2. Damaged Equipment Repairs
If a worker is injured while using a piece of equipment for the job, you could incur some expenses associated with repairing this equipment. Anytime an essential piece of equipment is out of commission, your company could be losing profits.
Whether the injury was caused by an equipment malfunction or the injury itself resulted in serious damage, repair costs must be factored in when trying to estimate the financial burden your company will bear after a worker's compensation claim is filed.
3. Low Employee Morale
Since workers spend a significant amount of time each day on the job site, losing a comrade to injury could affect morale. While lowered employee morale isn't an obvious deterrent to productivity, workers who are bearing the emotional burden of missing one of their own can affect your bottom line.
Experts estimate that disengaged employees cost the American economy an estimated $350 million each year. Because low morale can translate into decreased production, increased rates of absenteeism, and higher levels of conflict in the workplace, it's important that you take the time to consider how a worker's compensation claim will affect your employees.
Taking the time to uncover some of the indirect costs of worker's compensation claims will help your business better prepare to shoulder the financial burden of these claims in the future. You can also contact a professional workers' compensation law firm like Ransom, Gilbertson, Martin & Ratliff, L.L.P for more advice on how to approach a workers' compensation claim.
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