Occupational Accident Indirect Cost Model Validation Using Confirmatory Factor Analysis

Occupational injury has sparked more concern to the manufacturing industry since it may give an impact to the organization especially on financial viewpoint. However, there is lack of consensus between researchers in identifying occupational accident indirect cost components. This study proposed an assessment of the indirect cost model by using confirmatory factor analysis (CFA). In total, there are 344 cases (which occurred between 2008 and 2013) were considered in developing the model and those cases were obtained from six different sectors in manufacturing industry. Data collection process involves reviewing previous accident record in that particular company. Besides, several interview sessions with site safety officers, representatives from human resource and account department, supervisors and operators were conducted in order to estimate each of indirect cost components. Both approaches also known as local specific approach. Then, CFA is performed to validate the model proposed by examining the relationship between observed variable and its latent construct. The observed variables are productivity loss, worker replacement cost, administration and legal cost, investigation cost, machine and equipment damage cost and product damage cost whereas latent construct used in this study is accident indirect cost. The CFA result shows that the occupational accident indirect cost model has acceptable goodness of fit. In conclusion, indirect cost components are productivity loss, worker replacement cost, administration and legal cost, investigation cost, machine and equipment damage cost and product damage cost.