Episode 199 - Occupational Safety - Incident Investigation Indirect Costs

Dr. Ayers explains that indirect costs from incidents are often far greater than the direct, easily measurable expenses. These hidden costs quietly drain time, productivity, morale, and organizational resources — and they are the real reason prevention pays.

  🧠 Key Themes 1. Indirect Costs Are Harder to Calculate — but More Important

The episode highlights that indirect costs are:

• Less visible

• Often unbudgeted

• Frequently underestimated

• Usually much larger than direct costs

These costs accumulate across the organization, not just in the safety department. Sources:

  2. Examples of Indirect Costs

While the episode description doesn’t list them explicitly, typical indirect costs include:

• Lost productivity

• Supervisor and manager time spent investigating

• Training replacement workers

• Overtime to cover shifts

• Lower morale and engagement

• Delays in production or service

• Administrative time

• Reputation impacts

These ripple effects can last weeks or months.

  3. Indirect Costs Drive the True Business Case for Safety

Dr. Ayers emphasizes that leadership often focuses on direct costs (medical bills, repairs), but indirect costs are where the real financial impact lies. This is why:

• Prevention is cheaper than reaction

• Strong safety systems protect profitability

• Good investigations reduce long‑term costs

Sources:

  4. Better Investigations Reduce Indirect Costs

By identifying meaningful causal factors and root causes, organizations can:

• Prevent recurrence

• Reduce downtime

• Improve morale

• Strengthen processes

• Lower long‑term operational costs

Indirect cost reduction is a major benefit of high‑quality investigations.

  🚀 Leadership Takeaways

• Indirect costs are the silent budget killer.

• They are harder to measure but far more expensive.

• Strong investigations and prevention strategies dramatically reduce them.

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