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Calculating the Costs of Lost Time Incidents and How to Prevent Them

According to EHS Today and the US Bureau of Labor Statistics, non-fatal workplace injuries and illnesses rose 7.5% in 2022, from 2.3 million in 2021 to 2.8 million. However, with fewer than half of employees not reporting potentially recordable injuries, health and safety professionals believe that much more can be done to reduce actual occupational injury rates across the US.

There are several recommended measures to achieve this, including encouraging workers to report all types of workplace injury or illness; however, underpinning them all is the need for accurate and reliable data that tracks recordable incident rates. This kind of safety metric, among others, delivers valuable insights into safety performance, giving organizations tangible benchmarks on which to base the efficacy of EHS programs.

In fact, our clients are already using these metrics to monitor how their programs work to improve safety within the workplace, and one specific data point they report as particularly valuable is lost time incidents (LTIs). So, through our experience of using data to provide businesses with purpose-driven technologies designed to protect vulnerable employees, this article will explore why it’s important to track LTIs, how they impact your bottom line, and how to prevent or reduce them.


What is a Lost Time Incident or Injury?

 A lost time incident (LTI) is an event that occurs during working hours that leads to employee injury or when an employee is involved in an accident that hampers their ability to perform their regular job duties. Ultimately, these recordable work-related injuries and incidents lead to absenteeism and lost working hours, as well as disrupting workflows, decreasing productivity, and impacting other workers within an organization.


Why it’s Important to Track LTI Data

In the US, the Occupational Safety and Health Administration (OSHA) requires organizations with more than 10 employees to keep a record of serious work-related injuries and illnesses, and incidents recorded must be submitted annually through the Injury Tracking Application (ITA). While this requirement is a mandatory element of maintaining a legal workplace, it can also enable your organization to track LTI data and put measures in place that reduce injury and absenteeism and increase efficiency and productivity.

 In fact, since LTI data is a key indicator of the efficacy of your health and safety programs, we have found that it is crucial in identifying trends or patterns that allow you to put preventative measures in place. Alongside other metrics such as lost time injury frequency rate (LTIFR) and injury severity rate (ISR), LTI data gives your organization the tools information it needs to improve safety for all employees.


Understanding the Costs of Lost Time Incidents and Injuries

The bottom line is that each lost time accident your organization records has a financial impact on your organization, so reducing the rate of incidences can help boost growth and drive profitability. Direct costs include medical expenses, the replacement or upgrading of safety equipment, and investigation costs, as well as potential compensation and legal fees if the employer is found to be at fault.

In addition, an organization with a high number of LTIs may also incur other indirect costs that include low employee morale leading to high turnover, lost productivity, the temporary or permanent replacement of workers, increased insurance premiums, and reputation damage. Taken together, both the direct and indirect costs can very quickly become unmanageable, particular for smaller organizations that do not have the capital to deal with multiple claims at the same time. 


Methods for Calculating Costs

Understanding the costs involved with LTIs is the first step to reducing incidence rates, and ROAR’s expertise in helping you realize an ROI on panic button systems means we can help you calculate expenditure per employee. However, it is important to remember that this metric should not be taken alone and should be calculated alongside other metrics such as TCOR (total cost of risk) when evaluating elements of your safety program.

In most cases, the lost time incident rate (LTIR) calculation is based on a total of 200,000 hours which represents 100 employees working 40 hrs per week over a 50-week period of time. However, in high incident industries or those considered hazardous, the base total may be reduced to 100,000 hours over the same given period. This high figure is used to ensure realistic calculations across most industries; however, it is also worth noting that the LTIR is known as a “lagging indicator” since it measures the number of lost time injuries that have already happened.

Below, we highlight the calculations your organization needs to begin benchmarking your health and safety performance, providing a standardized way of comparing incident rates to the costs incurred. To break things down a little, we have also included an example of how to start.


·  LTIR = (Total LTIs / Total number of hours) × 200,000

·  TCOR = Direct Costs + Indirect Costs


So, let’s say your calendar year ends with 3 lost time injuries and you estimate 180,000 hours worked. The calculation is as follows:


  • 3 / 180,000 x 200,000 = 3.33 LTIs per 100 workers


Next, you can calculate the costs incurred. Let’s say that the total direct costs associated with those incidents were $20,000 and indirect costs were $5,000:


  • $20,000 + $5,000 = $25,000


So, to get the costs per worker, you can use this calculation: 


  • Costs per Worker = TCOR/LTIR


  • $25,000 / 3.33​ = $7,508 per worker


Strategies to Prevent Lost Time Incidents 

Once you are able to measure LTIR and TCOR metrics, your organization can begin to build safety management strategies that reduce absenteeism, injury, lost productivity, and costs, helping your employees to feel safer and your organization to build happy and inclusive workplaces. Below, we look at a few strategies to prevent LTIs in your workplace.


  1. Risk Assessment and Hazard Identification

Conducting a thorough risk assessment, creating a workplace violence prevention plan, and identifying potential hazards is the first step in preventing LTIs. This involves evaluating the work environment, the equipment used, and employee activities to pinpoint potential risks. 


  1. Implementing Robust Safety Training Programs

Educating employees on workplace safety and security procedures, emergency protocols, proper equipment and PPE usage, and providing first aid training are crucial for preventing LTIs. In addition, regular training sessions can reinforce safety practices and raise awareness of potential hazards.


  1. Continuous Monitoring and Improvement

Establishing a culture of continuous improvement involves regularly monitoring and assessing safety performance. This can be achieved through incident reporting systems, regular safety audits, and feedback mechanisms. Identifying and addressing root causes of incidents ensures that preventive measures are continually refined.

Finally, feedback from our clients has shown us how effective panic button systems can be in reducing incidence rates in industries with the most vulnerable workers, while also improving safety culture across the board to decrease turnover and improving job satisfaction among many other metrics. For more information on how real-world solutions to LTIs can help your organization, explore our case studies here or contact a member of our team to discuss your specific requirements and request a demo.

About Author

Yasmine Mustafa

Yasmine Mustafa believes ROAR found her, not the other way around. A former refugee and undocumented immigrant, she draws upon her unique life experiences to lead ROAR in its mission to empower and protect workers across all industries. Her journey is a testament to resilience and unwavering commitment. With over 15 years of leadership in the tech industry, including the successful sale of her first company, 123LinkIt, to a firm in Silicon Valley in 2009, Yasmine is a driving force for positive change, balancing profits with purpose. Yasmine’s workplace safety advocacy and leadership have earned recognition from the BBC, CNBC’s Upstart 100 and the City of Philadelphia. Yasmine is a highly sought-after conference speaker. A two-time TEDx speaker, Yasmine has also presented at the prestigious SXSW and CES conferences, sharing her deep passion for harnessing technology for positive change. Beyond her professional life, Yasmine enjoys time spent with friends and family, exploring the outdoors, biking, and hiking. She also dedicates her time to the boards of Coded by Kids, Leadership Philadelphia, and the Philadelphia Alliance for Capital and Technologies.

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