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Companies’ valuation linked to workplace injuries

On Behalf of | Sep 9, 2016 | Workplace Safety

It’s probably no surprise to Oklahoma workers who are involved in on-the-job accidents that injuries are going to cost both them and their employers money. Workers across the United States are involved in 3.5 million accidents every year – accidents that cost $250 billion annually.

It may surprise both groups to know that a company’s valuation can be affected by the injuries its employees suffer. If injuries involving company workers occur, the lower company’s cash flow stock valuation tends to drop; conversely, the company’s cash flow stock valuation tends to increase when the number of injuries goes down. This conclusion was reached by University of Texas – Dallas researchers who extrapolated data on worker injuries from the U.S. Department of Labor’s Bureau of Labor Statistics. Researchers said their study is one of the first to recognize this correlation.

The cost of worker injuries impacts a company’s financial position as there is less money to pay debts. Workplace injuries and illnesses make it harder to find and keep good employees, companies are at risk of more lawsuits, and injuries impact productivity over the long term, the researchers said. They noted that firms that invest in workplace safety, such as employee training and better equipment, have lower injury rates, thus contributing to a healthier bottom line.

Even when a company invests in workplace safety measures, accidents can still happen. Workers who suffer on-the-job injuries or illnesses may be eligible for workers’ compensation benefits that can include medical expenses, lost wages if the worker cannot work for more than a few days, and retraining if injuries prevent the worker from returning to their pre-injury position.


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