All employers should have a high regard for the safety of their workers, in part because accidents involving workers reduce productivity and hurt the company's bottom line. In addition, federal regulatory agencies require that companies in certain industries keep extensive records of accidents in which workers are injured or unable to perform their duties. A company's severity rate describes the extent of the injuries its workers suffer in terms of the number of days lost due to injury and the number of incidents reported.
Workplace accidents can leave employees out of work for days, weeks or even months. The severity rate for workplace injuries uses the number of lost work days as its first point of comparison. A lost work day equals the number of hours an employee loses due to injury, multiplied by the number of hours in a standard work day. For instance, if a worker loses 28 hours of work due to injury, and the standard work day is 8 hours, the number of work days lost due to the injury is 28/8, or 3.5 days.
Safety managers can calculate the total hours worked by adding the number of hours worked by all employees across a specific branch or department, or over the entire company. For example, Fictional Construction has 50 full-time employees who work 40 hours per week for 50 weeks a year, and 40 seasonal employees who work 25 hours per week for 12 weeks a year. The total number of hours worked for Fictional Construction is (50x40x50) + (40x25x12), or 100,000 = 12,000, or 112,000.
The severity rate is based on a company that has 100 full-time employees working 2,000 hours per year, for a total of 200,000 man hours per year. This measurement lets government regulators and safety agencies assess companies of different sizes on an equal footing. For instance, Fictional Construction reported 70 lost work days due to accidents in 2014. The number of lost hours based on 100 full-time employees would be 70 x 200,000, or 1,400,000 lost hours per 100 employees. The severity rate is measured by taking the lost hours and dividing it by the number of hours worked. The severity rate for Fictional Construction would be 1,400,000/112,000, or 12.5 days per incident.
The severity rate helps managers assess the dangers inherent in their workplaces. If the severity rate is low, then the average accident leads to a minimal disruption in production. When the severity rate is high, managers will see that an average safety incident can lead to major production losses. At Fictional Construction, an average accident leads to a worker being out for 12.5 days, or 2.5 work weeks at five days per week. High severity rates can lead to loss of business, employee dissatisfaction and scrutiny from government agencies such as OSHA.