Injury rates for each company and for the portfolio, and why averaging the rates understates the result.
TRIR is recordable injuries × 200,000 / hours worked; LTIFR is lost-time injuries × 1,000,000 / hours worked. Across an illustrative three-company private equity portfolio with 70 recordable cases and 26 lost-time injuries in 4,365,000 hours, the portfolio TRIR is 3.21 and the LTIFR 5.96. Averaging the three companies' rates instead gives a TRIR of 2.72, 15 per cent too low, because the safest company is also the smallest.
Worked in full in The ESG Manager in Private Equity by Julian R. Sterling, with every figure reproduced in a free workbook.See the book on Amazon →
Both rates normalise a count of injuries by exposure, the hours actually worked, so that a 2,000-person plant and a 400-person office can be compared. They differ in what they count and in the base they scale to.
TRIR (total recordable incident rate) = recordable cases × 200,000 / hours worked
LTIFR (lost-time injury frequency rate) = lost-time injuries × 1,000,000 / hours worked
Severity rate = days lost × 200,000 / hours worked
Excel: =Cases*200000/Hours; for a portfolio, =SUM(Cases)*200000/SUM(Hours)
The 200,000 is the US OSHA convention: 100 full-time employees working 40 hours a week for 50 weeks. A TRIR of 3.21 reads as 3.21 recordable cases per 100 full-time workers a year. LTIFR is more common in the UK, Europe and Australia and usually uses one million hours, although some companies report it per 200,000; the base must be stated every time. A recordable case, in the OSHA sense, is a work-related injury or illness that results in death, days away from work, restricted work or transfer, medical treatment beyond first aid, or loss of consciousness, or a significant diagnosed condition. A lost-time injury is narrower: one that keeps the worker away for at least one full shift after the day of the injury. Definitions vary by country, so the portfolio policy should fix one and apply it to every company. Data frameworks used across private equity portfolios, such as the ESG Data Convergence Initiative, ask for work-related injuries, so the ESG manager will be aggregating these numbers whether or not the portfolio companies are used to them.
| Company | FTE | Hours worked | Recordable cases | Lost-time injuries | Days lost |
|---|---|---|---|---|---|
| Manufacturer | 1,200 | 2,280,000 | 38 | 14 | 310 |
| Logistics | 650 | 1,365,000 | 31 | 12 | 260 |
| Software | 400 | 720,000 | 1 | 0 | 0 |
| Portfolio | 2,250 | 4,365,000 | 70 | 26 | 570 |
Step 1, company rates. The manufacturer: 38 × 200,000 / 2,280,000 = 3.33. Logistics: 31 × 200,000 / 1,365,000 = 4.54. Software: 1 × 200,000 / 720,000 = 0.28.
Step 2, LTIFR. The manufacturer: 14 × 1,000,000 / 2,280,000 = 6.14. Logistics: 8.79. Software: 0.00.
Step 3, portfolio. Add the cases and the hours first, then divide: 70 × 200,000 / 4,365,000 = 3.21, and 26 × 1,000,000 / 4,365,000 = 5.96.
| Company | TRIR | LTIFR | Severity rate | TRIR added by one case |
|---|---|---|---|---|
| Manufacturer | 3.33 | 6.14 | 27.2 | 0.088 |
| Logistics | 4.54 | 8.79 | 38.1 | 0.147 |
| Software | 0.28 | 0.00 | 0.0 | 0.278 |
| Portfolio, hours-weighted | 3.21 | 5.96 | 26.1 | |
| Simple average of rates | 2.72 | 4.98 |
The portfolio records 3.21 recordable cases per 100 full-time workers and 5.96 lost-time injuries per million hours, and each lost-time injury costs on average 570 / 26, about 22 days. Logistics is the outlier on every measure: its TRIR is 36 per cent above the manufacturer's on fewer hours, and it is where a health and safety improvement plan has the most to gain. A 20 per cent reduction target at portfolio level means a TRIR of 2.57: at the same hours, 56 recordable cases rather than 70, so 14 fewer injuries in a year.
The last column shows why small companies' rates jump about. One more case moves the software company's TRIR by 0.278, three times as much as the manufacturer's. A single injury there is noise; at the manufacturer, a trend over three years is a signal. Set company targets with that in mind.
| Company | Actual hours per FTE | TRIR, actual hours | TRIR, FTE × 2,000 |
|---|---|---|---|
| Manufacturer | 1,900 | 3.33 | 3.17 |
| Logistics | 2,100 | 4.54 | 4.77 |
| Software | 1,800 | 0.28 | 0.25 |
| Portfolio | 3.21 | 3.11 |
Estimating hours as headcount times 2,000 flatters the manufacturer and the software company, whose people work fewer hours, and penalises logistics, which runs overtime. Ask for payroll hours, including overtime and agency workers on site, and decide once whether contractors are in or out; mixing the two between years breaks the trend.
The portfolio data dictionary and collection calendar for metrics like these are among the printable working documents with the free workbook for this book; how operational improvements are carried through to value is worked in what an ESG value creation plan adds.
It is the hours worked by 100 full-time employees in a year at 40 hours a week for 50 weeks, the OSHA convention. Multiplying by it turns cases per hour into cases per 100 full-time workers. The illustrative manufacturer's 38 recordable cases in 2,280,000 hours give a TRIR of 3.33, or 3.33 cases per 100 workers a year.
TRIR counts every recordable case, including medical treatment and restricted work, per 200,000 hours. LTIFR counts only injuries that cost at least a day away, usually per million hours. In the worked portfolio the TRIR is 3.21 and the LTIFR 5.96; on a 200,000 basis the lost-time rate would be 1.19, so the base must always be stated.
Set it on the hours-weighted portfolio rate and translate it into injuries avoided. A 20 per cent cut from the illustrative 3.21 is a TRIR of 2.57, which at 4,365,000 hours means 56 recordable cases instead of 70. Give small companies multi-year targets, since one case moves a 720,000-hour company's TRIR by 0.278.
This article is one calculation from The ESG Manager in Private Equity. The book takes the same case from first principles to the decision, chapter by chapter, and every figure it prints is a live formula in the free companion workbooks.
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