SA Affordable Housing January / February 2017 // Issue: 62 - Page 29

FEATURES - HEALTH AND SAFETY South Africa’s construction industry has a less than 50% rate of compliance with health and safety regulations. Image: Pixabay THE COSTS OF ACCIDENTS – DIRECT AND INDIRECT DIRECT COSTS Direct costs tended to be those associated with the treatment of the injury arising from the accident and any unique compensation offered to workers as a consequence of being injured. These expenses that can be easily identified are the ‘direct costs’ of the accidents. These costs are in the main covered by workers’ compensation insurance. Further, historical records could be reviewed to determine the expenditure attributed to each particular injury in the organisation. Hinze (2006) confirmed that most of these costs are covered by workers' compensation insurance, such as medical expenses, lost wages, sick leave administration, temporary disability payments and hospitalisation. However, the remaining costs had to be covered by the business itself. What may initially be classified as an inconsequential or minor accident could prove to be exceedingly costly in terms of the associated indirect costs. INDIRECT COSTS • First aid treatment • Taking injured person to hospital • Making the area safe • Immediate staff downtime • Staff time to report and investigate accident • Meetings to discuss the incident • Time spent with inspectors • Consultant fees to assist with investigation • Assessing/re-scheduling work activities • Recovering work/production • Cleaning up site • Bringing work up to standard • Repairing damage/faults • Lost work time • Salary costs of replacement workers • Company reputation • Loss of profits • Loss of skills ECONOMICS OF CONSTRUCTION HEALTH AND SAFETY Recent research conducted in the UK by the Health and Safety Executive (HSE) determined indirect costs to be 11 times more than direct costs. They determined that accidents cost as much as 37% of the annualised profits of an organisation. The accidents costs are also determined as the equivalent of 8.5% of the project tender pric H[X] IHوH[X[ܙ[\][ۘ[[[˂\X\ۙXY[]YXHHH[ۂX[[H[]\]H]\Z[Y[\XH M [Y\H\Xˈ[]YXKH[قXY[\\[X]YHX] IHوH[YHق\]YۜX[ۋHو[\[Y[[X[[Y]H\[\][H\[H\\[X]YB]Y[ IH[ Hو[ڙXˈ\[X]\]H[وXY[^YYHوX[[Y]KH[۝[YH]\X[H^Y][ۈقHYܙXH\[˂QԑPBHTS‚SPTH HPPTH M‚‚