Achievement raises the company’s market value, increases productivity, reduces costs, and reduces employee turnover
The economic impact of accidents includes hidden losses up to 4 times the direct costs
Studies: Every dollar invested in safety programs returns up to $4.4
Prepared by: Muhammad Al-Sa’i
Major companies are racing to announce safe working hours, or what is known as working hours without lost-time accidents. !
Rather, in light of the increasing competition between companies, industrial and service institutions to enhance their operational efficiency and achieve the highest levels of productivity, “safe working hours” emerge as one of the standards and indicators that reflect the management’s success in providing an effective occupational safety system. Therefore, the announcement of achieving millions of hours of work without lost-time injuries is no longer just a propaganda announcement, but rather evidence of the company’s ability to manage operational risks and protect its human resources.
What does this term mean? What is its importance to the company? How are these hours calculated? What are the criteria that determine whether an accident is a loss of time or not? Conversely, what is the economic and moral impact that lost-time injuries have on the company?
Missing work
Simply put, safe working hours are defined as the total number of working hours completed by employees and workers in performing their tasks within the company or factory in a specific period of time without any incident occurring that leads to injury that prevents the worker from continuing his work the next day. This is known as a “lost work time injury.”
These hours are calculated according to the number of workers and the number of hours. For example, if the company has 100 workers, each of whom works 8 hours a day, this means that the company records 800 safe working hours per day. These hours are collected periodically. When a period of half a year or a full year passes without an incident leading to the absence of an employee, the company takes the initiative and proudly announces the achievement of “one million safe working hours” or more, which is actually considered a major achievement in the world of industry.
However, if an accident occurs that causes a worker to be absent to receive treatment, the meter is zeroed and the company begins the calculation again. Note that the calculation of “lost time” begins from the day following the accident. That is, the day of the accident itself is not counted among the lost days.
Here a question may arise about the criteria for classifying an accident as a waste of time or not.
In fact, the classification is not limited to the severity and seriousness of the injury, but also includes its impact on the employee’s ability to perform work and whether or not he is forced to stop working. The matter is subject to strict international standards set by occupational safety and health organizations such as:OSHAAmerican andILOInternational. !
Lost time injury (Lost!Time!Injury–LTIIt is an injury that renders the worker unable to return to work and perform his usual tasks on the work day immediately following the accident, such as sustaining fractures or back injuries.
While a non-loss-of-time injury is an injury that does not result in the loss of a full day of work, even if it requires medical treatment, such as wounds that are treated on the same day. !
There is an intermediate case, which is restricted work (Restricted!Work!Case), in this case the employee is not absent, but he may be prevented from performing his usual duties and assigned to lighter work due to the injury. Here, many companies develop a separate classification for lost-time injuries, but it remains an important indicator of safety performance.
Direct reflections
So…what makes companies care about proudly announcing the number of safe hours, and what is the importance of these numbers for the company?
In fact, companies’ interest in reaching millions of “safe working hours” goes beyond their mere desire to avoid accidents, but rather extends to being a strategic indicator that directly reflects the company’s financial and commercial success, its commitment to safety standards, its safe work environment, and successful risk management procedures, which enhances productivity and reduces financial losses resulting from accidents and operational interruptions.
Having a significant record of hours free of lost-time incidents helps any company:
– Maintaining reputation and market value. One of the most important pillars of evaluating companies is sustainability, environmental, social and institutional governance standards. The absence of repeated accidents reflects a good image of the company as a responsible and sustainable work environment, which increases its market value and investors’ confidence in it.
– Increase productivity. When the hours of downtime and absence from work are reduced, this helps maintain production continuity and achieve operational goals. !
– Obtaining better opportunities in major tenders and projects, especially in sectors such as oil and gas, construction and logistics. Many government or private contracts are only awarded to companies that have a clean safety record.
– Reducing costs and increasing returns. Accidents require compensation for the injured and treatment and repair of damaged equipment. At the same time, accidents cause a decrease in productivity as a result of production lines stopping, not only at the time of the accident, but may extend to long periods due to legal and administrative investigations after the accident.
Reducing insurance costs, as insurance companies raise amounts for companies with high accident rates. !
– Maintaining human resources and competencies and raising morale. A worker who feels that his life and safety are a priority for management increases his loyalty to the organization and increases his productivity. In addition, a safe work environment reduces employee turnover and makes the company attractive to the best talents in the market.
– Avoid huge financial fines or penalties that may lead to administrative closure.
Cumulative losses
In view of this, the economic impact of accidents and work injuries on companies is not limited only to the obvious direct costs such as compensation or medical costs, but extends much further than that to include losses that are considered economically hidden and accumulated, which some describe as an “iceberg,” the largest part of which is hidden beneath the surface. The International Labor Organization estimates that losses resulting from work accidents and occupational diseases cost the global economy approximately 4% of global GDP annually, which is enormous amounts if companies invested a small portion of it in developing safety systems (HSEThese losses would be transformed into net profits and business expansion.
This was confirmed by a study entitled “The Cost of Loss of Productivity Due to Non-Fatal Injuries.”American!Journal!of!Preventive!MedicineYear 2025
Productivity losses resulting from non-fatal injuries in the United States amount to approximately $25.15 billion annually. Studies confirm that the occurrence of a serious accident that causes the safety meter to zero, causing other employees on the site psychological shock that makes them work very slowly and anxiously, which is a natural reaction to protect themselves, but it slows down the pace of production.
The negative impacts here can be divided into two types: direct costs and indirect costs.
First: Direct economic costs, which are the cash expenses paid by the company immediately after the accident occurs, and include medical expenses, ambulance costs, treatment, rehabilitation, compensation, and legal settlements.
In addition, there are high insurance premiums and exposure to legal fines and direct financial penalties if it is proven that there is a defect in safety standards.
Second: Indirect economic costs. According to studies by the International Labor Organization (ILOIndirect costs may reach 4 times the direct costs, which silently deplete the profitability of companies, and include loss of productivity, work site cessation after the accident, and the loss of the time of other workers who stop working due to shock or for assistance or supervision. As well as losses in alternative labor costs or paying overtime wages to cover the shortage. As well as the possibility of damage to equipment or assets due to accidents. This may be followed by a delay in the delivery of projects and associated penalty conditions in accordance with the contracts. This is in addition to wasted administrative time, whether by officials, supervisors, human resources employees, or workers.
In the long run, the company’s market value will be affected, and it may lose its competitive advantage if the accident is repeated, and may even be excluded from major tenders, which means losing billions of dollars in growth opportunities. At the same time, commercial reputation declines, which may prompt investors to withdraw their money.
Costs…or investment?
All of the above leads us to an important question: Are the huge amounts of money that any company pays to enhance security and safety operational costs or economic investment?
Studies answer directly: The amounts spent by companies to reduce accidents are a real and profitable investment, and not just a “cost” or wasted operational expenses. !
Rather, studies by the US Occupational Safety and Health Agency (OSHA) confirmOSHA) and the International Social Security Association (ISSA) Every dollar the company invests in safety and accident prevention programs returns a financial return ranging from 2.4 to 4.4 dollars. This return may not appear as direct cash profits, but it may be huge costs avoided by avoiding fines, legal damages and medical expenses, protecting expensive machinery and equipment, reducing fixed costs such as insurance premiums, as well as improving production efficiency and protecting human capital and skills that represent the company’s most valuable assets. !
In addition to the above, investing in safety contributes to strengthening the company’s intangible assets, such as commercial reputation and market value, which are transformed into financial value when the company grows or wins major tenders that it would not have obtained if it had a record of accidents.
