HR Calculations: Workers Compensation Days Lost
Calculating the cost of workers compensation isn’t the only metric showing the impact of health and safety on the business. Sometimes the real cost of workplace accidents and injuries is not the dollar amount actually paid out, but the lost productivity resulting from days the employee can’t report to work—known as “days lost.”
Reducing the number of claims and the expense of each claim is not as helpful as it may seem if the few claims you have result in lengthy employee absences. Knowing the amount of time each employee is away from the workplace can help you identify if the type of injury is the problem, or if the company needs to improve the types of modified job duties—such as greeter positions or desk work—it is able to offer. After all, having an employee perform some duties is better than having him out completely, and research consistently shows that providing some form of return-to-work program and accommodation helps accelerate the worker’s recovery. Helve’s 1993 study found that the positive return on investment for such return-to-work programs was $9 for every $1 spent on the program.[1]
Identifying the days lost due to injury, and determining if there are any related variables—such as a particular division with unusually high rates, or workers in a specific job classification—can help when designing the program and the types of light duty that can be assigned.
Calculating lost work days per FTE
- Identify the number of lost work days (or hours) in the previous year.
- Obtain the average number of workers’ compensation eligible full time equivalents (FTEs) on the books in the same time period
- Divide the number of work days (or hours) by the number of employees.
In this example, assume the company lost 72 hours (or 9 days) of work during the previous year, and had 50 FTEs on the books. 72 hours / 50 FTEs = 1.44 lost hours per FTE. 9 days / 50 FTEs = 0.18 lost days per FTE.
Calculating lost work days per active claim
- Identify the number of lost work days (or hours) in the previous year.
- Obtain the number of active claims during the same time period.
- Divide the number of work days (or hours) by the number of active claims.
For this example, assume the company lost 72 hours (or 9 days) of work during the previous year, and had 3 claims. 72 hours / 3 claims = 24 hours per claim. 9 days / 3 claims = 3 days per claim.
[1] Helve, P.F. (1993). Evaluating the practicality of return-to-work programs. Atlanta, GA: Crawford & Co.