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Lost Time: How Does it Add Up?

By Rob Chernish
Published: May 13, 2017
Key Takeaways

Learn how companies are adding up lost time, and what it means from a profit perspective.

Source: Damianpalus /

Do you know what lost time means? Do you work for a company that uses lost time calculations?

If so, you're not alone. More and more businesses and companies are beginning to calculate their lost time, and some companies have even gone a step further to calculate their lost time frequency injury rate (LTIFR). You can calculate that rate by dividing the number of hours of lost time by the total number of hours worked. But it's important to first learn more about lost time, what it means, why it is important, and how it relates to safety.

What Is Lost Time?

Lost time, on a basic level, is the number of man hours lost due to an accident.


Let's say, for example, that a woodchip ricochets off the protective shield of a key operator at a sawmill. If they miss seven days of work for recovery and work an average of 10 hours a day, then the total lost time for this worker is 70 hours.

Since that operator's role is essential to the work process, the other workers—the piling team and lumber haulers—if they don't have any other work, will also have to stop working. If five employees in this process get shutdown, and they work an average of 70 hours per week, then you're looking at 350 hours for the crew, plus the 70 hours for the operator, making for a total of 420 lost hours.

Lost Time Adds Up to Lost Profits

From a corporate profit perspective—which is really what drives safety—all this lost time 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 resulting in 420 hours of lost operations has cost the company $4,200 dollars in profit.

There are also other ramifications of this lost time, including: lost production of lumber, possible failure to meet quotas, safety costs, and repair costs.

Lost Time and the Bottom Line

The loss of profit is bad enough, but the consequences of a lost time accident on the worksite can soon escalate to actually costing the company money.

Consider the various machines, roles, and functions and processes of your worksite 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 disasters? All of these 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, causing flood damage in the core tunnels. Work had to be stopped for six 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 hit that caused the company’s stocks to drop and shareholders to become upset.

What about the floods Alberta, Canada saw in 2013 when highways and buildings suddenly became engulfed in water, including the downtown core of the city of Calgary and the Calgary Stampede grounds? 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.

Or think of your own personal situation. What if you were laid up and couldn't work for six months? Imagine all the dollars lost from wages and the other losses in maintenance and upkeep.

It's easy to get hung up on obvious expenses, like those paid out in compensation or the expense of servicing or replacing equipment. But once you start factoring in the real cost of lost time, it becomes obvious that it should be an important concern for any company leader.

Staying Safe and Staying Profitable

Safety is important on the jobsite to keep you safe, but it also translates into the overall success of the business. Safety affects every aspect of a company, directly and indirectly. Making sure everyone in your company can work safely is an important step to ensuring that your business continues to turn a profit.


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Written by Rob Chernish

A writer from Canada with firsthand experience in Oil, Gas, Mining, and environmental safety.

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