Spend Now to Save Later: The Long-Term Financial Value of PAT

[fa icon="calendar'] Nov 11, 2015 8:00:00 AM / by Deborah Lechner

Good employees are the backbone of any company. Keeping workers healthy, happy, and on-the-job are chief concerns for employers. Prioritizing workplace safety offers proven benefits in reducing on-the-job injuries and safeguarding the well-being of workers. Effective safety programs, however, do come at a price. Since keeping your company's bottom line healthy also benefits employees in terms of wages, benefits, and job security, over the short-term these two very real needs may seem like opposing ones. However, over the long term, they are not. Spending on safety now will save you later, as it works to protect both your workers and your bottom line.

A look through OSHA's enforcement reports can offer plenty of insight on just how safety leadership can offer invaluable protection to both employees and the financial health of companies. A report on an incident involving Cotton Commercial USA – a Houston, Texas company that provides remediation services for commercial and residential structures damaged by disasters – provides a particularly poignant example of the human costs of workplace incidents and the financial consequences thereof. In this incident a construction worker fell through a roof, fracturing both arms and suffering severe contusions.

Of course, the most serious consequences of this incident were the severe, perhaps life-changing injuries that the worker suffered. However, there were also significant consequences for the company. These included the direct and indirect costs of the injury itself; being cited by OSHA for seven safety violations, most related to the failure to provide employees with fall protection training and equipment; and the $362,500 in fines that went with them. A very public (and reputation-damaging) enforcement report certainly hurt, too. All of these consequences could have been avoided with an investment in effective safety equipment, training, and other safety measures – an investment that would likely amount to just a fraction of the costs of this one incident.

What this case, and many others, demonstrates is that an investment in safety offers long-term financial value. While it may increase operating expenses over the short-term, going the extra mile for safety can produce savings that dwarf those costs.

Physical Abilities Testing programs (PAT) present another example of pay-me-now or pay-me-later financial value – even in companies that already have basic safety strategies firmly in place. PAT works to improve workplace safety by matching the capabilities of workers to the physical demands of their jobs. This has been shown to substantially reduce some of the most common workplace injuries, offering significant ROI by reducing costs associated with those injuries.

Published studies indicate a significant return on PAT investment. The University of Illinois at Chicago conducted 712 screens for their physical plant applicants over a three-year period.[1] When they compared their injury and cost data before and after the program, they found that the number of lost day cases decreased by 18.5%, and more importantly, that their workers’ compensation costs decreased by 79%. In addition, they realized a return on their investment of $18 saved for every $1 spent on screening.

These researchers concluded – as do most employers who use PAT – that Physical Ability Testing clearly positively impacts the number of occupational injuries and their resultant costs.

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[1] Littleton M, Cost-effectiveness of a prework screening program for the University of Illinois at Chicago Physical Plant. Work 21 (2003), 243-250.

Topics: Pre Employment Screening

Deborah Lechner

Written by Deborah Lechner

Deborah Lechner, ErgoScience President, combines an extensive research background with 25-plus years of clinical experience. Under her leadership, ErgoScience continues to use the science of work to improve workplace safety, productivity and profitability.