Occupational Accident Direct Cost Model Validation Using Confirmatory Factor Analysis

Abstract

Accident cost estimation become more important since it may cause financial implication to the company. However, there are no consensus between researchers in classifying direct cost component. The objective of this study is to evaluate direct cost model of occupational accident cost by using confirmatory factor analysis (CFA) method. There are three cost components proposed for direct cost estimation which are medical cost, rehabilitation cost and compensation cost. Local specific approach (by reviewing previous accident record in the company) is adopted in data collection process and only accidents occurred between 2008 and 2013 were considered in this study. There are 344 cases in total which came from six different sectors in manufacturing industry. For each occupational accident, the site safety officer in charge, human resource and account department officer were interviewed in order to estimate the direct cost. Then, the relationship between three observed variables for direct cost is evaluated by using CFA. The CFA result shows that the occupational accident direct cost model has acceptable goodness of fit that proved relationship between three observed variables (medical, rehabilitation and compensation cost) and its latent construct. In conclusion, the model justify that direct cost consists of three components, which are medical cost, rehabilitation cost and compensation cost.

Non-safety costs: A novel methodology for an ex-ante evaluation

“…Future streams of research would be addressed at making the management more aware of OHS, by putting more investments on prevention programs (Rohani et al, 2015a). It would be possible, indeed, to foster the adoption of these programs by making it clear that, in addition to non-safety costs, there are also benefits other than safety deriving from the adoption of safety-related interventions, such as productivity (Cagno et al, 2018), and also considering the relevance of safety within the sustainability framework (Rikhardsson, 2006).…”

“…On the other hand, industrial decision-makers consider cost evaluation to be a lengthy process requiring proper expertise to be carried out (Gavious et al, 2009;Rohani et al, 2015a). The literature has largely underlined the need for a simple (Rohani et al, 2015a) and easy to use (Cagno et al, 2013) methodology for cost evaluation, relying on a collection of data limited to those records already available in the firm (Cagno et al, 2013).…”

“…As a matter of fact, safety and health management contributes in different ways to the success of firms, as not caring about safety and health may lead to costs related to loss of profit, productivity, efficiency, the firm's image and competitiveness (Akcay et al, 2018;Mossink and Greef, 2002). The hidden and indirect aspects must be expressed in monetary terms so to be understood by industrial decisionmakers (Jallon et al, 2011;Tappura et al, 2015) but these aspects are difficult to be quantified (Jung and Baek, 2017;Rohani et al, 2015b): tracking the costs of work-related accidents is therefore fundamental for being able to quantify the non-safety costs (Rohani et al, 2015a). However, quantifying economic impact requires resources for the collection of reliable and significant historical data related to past events (López-Alonso et al, 2016), and industrial decision-makers face several barriers to this process (Biddle et al, 2005).…”

Improving occupational health and safety (OHS) in construction using Training-Within-Industry method

“…The cost of accidents (CoA) in construction constitutes a significant burden for the client and contractors in both financial (direct cost) and non-financial (indirect cost) terms (Rohani, 2015). According to Feng (2015), the study on CoA by Heinrich (1931) described accident as either direct or indirect cost.…”

Analysis of Human Factors for Enhancing Safety and Security Management System in Fossil and Renewable Power Plants

“…This means that, if the workers behavior is overlooked and not considered during developing and implementing the SSMS, this will lead to raising behavioral non-compliance with Occupational Safety and Health (OSH) requirements by the workers [6] Wherefore, the frequency and seriousness of work-related accidents which occur all over the world, particularly in the energy sector will stay highly astounding in terms of human and property losses [2] if the accidents underlying cause not tackled effectively in advance. This asserts that a good S-RB of the worker contributes to a good process safety in the workplace; consequently, it reduces the accidents occurrence and benefits both in time and cost-saving [7]. Therefore, the main goal of this study is to to tackle the safety and security concern in the hazardous working environment (Energy sector) to determine the critical factors which affect the SSMS in the energy firms.…”