Investigating the true costs of construction accidents

Abstract

Purpose

The construction industry contributes significantly to national economic growth and offers substantial opportunities for job creation; however, the industry has continually been plagued by workplace accidents. Moreover, employers may not realize the economic magnitude of workplace injury and ill health arising from construction activities. These accidents represent a considerable economic and social burden to employers, employees and to the society as a whole. Despite governments and organisations worldwide maintaining an ongoing commitment towards establishing a working environment free of injury and disease, a great deal of construction accidents continues to frequent our society. The purpose of this study is to conduct an analysis of a sample of 100 construction accident reports to establish, as far as practically reasonable, the total costs of limited types of construction accidents. Costs attributable to each of these accidents were classified either as direct or indirect costs. Through an exhaustive and time-consuming investigation of all available records from various sources and/or kept in various departments, the individual costs were correlated to the various direct and indirect categories.

Design/methodology/approach

This particular study is a combination of explanatory and collective case study approaches, whereby causal effects are determined or a course of events is examined from multiple cases. The preferred form of data collection is left to the researcher to decide (Yin, 2003). When a researcher is considering “how” or “why” questions, a contemporary set of events using primary and secondary documents, over which the researcher has little or no control, the case study approach is feasible (Yin, 2009).

Findings

The costs of construction accidents for the same sample of 100 construction analysed in this study has been estimated at a staggering R32,981,200. Of this total, R10,087,350 has been attributed to direct costs and R22,893,850 has been attributed to indirect costs. The costs of construction accidents are based on four cost components: sick pay, administrative costs, recruitment costs and compensation and insurance costs. It should be noted that the estimates of the costs to employers presented in this study are reflective of the activities and incidents of the reviewed organisation and may not necessarily represent another organisation. The costs of construction accidents values presented in this study reveal that construction accidents present a substantial cost to employers and to the society at large, inclusive of both the direct and indirect costs. It is therefore in the best interest of the employer to identify progressive and advanced approaches to more effectively manage construction health and safety, consequently society at large will benefit tremendously.

Originality/value

Given the high rate of construction accidents experienced, employers are not entirely mindful of the actual costs of construction accidents, especially when considering the hidden or indirect costs of accidents. Various safety research efforts have attempted to quantify the true costs of worker injuries; however, localised systematic information on cost of construction accidents at work is not readily available from administrative statistical data sources; therefore, this study was carried out to estimate the costs, like lost workdays or lost income, are clearly visible and can readily be expressed in monetary value; for a large part,0 however, economic consequences of accidents are somewhat hidden.

Citation

Haupt, T.C. and Pillay, K. (2016), "Investigating the true costs of construction accidents", Journal of Engineering, Design and Technology, Vol. 14 No. 2, pp. 373-419. https://doi.org/10.1108/JEDT-07-2014-0041