Do you know what lost time means? Do you work for a company that uses lost time calculations? If so, you are not alone, as more and more businesses and companies are beginning to calculate their lost time, and some companies have even gone a step further to calculate the lost time frequency injury rate (LTIFR). You can get the calculation by dividing the number of hours of lost time by the total number of hours worked, but it is important to first learn more about lost time, what it means, why it is important, and how it relates to safety.
Lost time, on a basic level, is the number of man hours lost due to an accident. For example, if a key operator at a sawmill has a woodchip ricochet off of his protective shield and he misses 7 days of work recovering, and works an average of 10 hours a day, then the lost time for this individual is 70 hours. Since his role is essential in the work process, the other workers, such as piling team and lumber haulers, if they do not have any other work, will also be shutdown. If there are 5 employees in this process that get shutdown, and they work an average of 70 hours per week, then that is 350 hours for the crew, and 70 hours for the operator, making for a total of 420 lost hours.
Now from a corporate profit perspective, which is really what drives safety, the result on the operations of the business can be drastic. If a company relies on its production hours to meet certain quotas to stay functional, then the lost time calculations can become very important, very fast. For example, if the company makes $10 profit for every man hour worked, then this small accident of 420 hours has cost the company $4200 dollars in profit. There are also other ramifications of this lost time including: lost production of lumber, possible failure to meet quotas, safety costs, repair costs, and other added costs.
The result of an accident on the job site can soon escalate from the loss of profits, to actually costing the company money. Consider the various machines, roles, and functions and processes of your work site and the members there. What would be the cost if you had an accident? Or, if other mechanical failures were to occur? What about environment impacts such as snow storms, typhoons, forest fires, and other natural distasters that can cause lost time?
Suddenly, safety becomes very important not only at the worksite level, but also on the balance sheet and the profit and loss statements. Consider this real-life example: a gold mining company that operates in Vietnam had to shut its doors because it got hit by simultaneous typhoons, which caused flood damage in the core tunnels, and work was stopped for 6 months while the flooding was pumped. The costs of flooding were huge, but the opportunity cost of not being able to work and mine gold was the real cost that caused the company’s stocks to drop, and shareholders to become upset.
What about the floods in Alberta in 2013 when highways, buildings, and many other buildings suddenly became engulfed in water, including the Calgary Stampede grounds and Calgary downtown core. There was an emergency shutdown and a stop-work order was put in place, so many people were unable to do business. The result: approximately a million dollars a day in lost time costs.
Think about your own situation. What if you were laid up and could not work for six months? Imagine all the dollars lost from wages, as well as the other losses that would occur in maintenance and upkeep if you were not able to work?
Safety is important on the jobsite to keep you safe, but it also translates into the overall success of the business. Safety effects every aspect of a company, whether it is direct or not. Remember to be safe, think, and take your time before approaching a new situation.