By Blake McGowan, CPE
Demonstrating the value of your ergonomics initiative, and calculating the return on investment (ROI) for specific engineering improvements are common requests for many safety professionals these days. Unfortunately, many of us struggle to even begin to justify improvements, let alone choose a meaningful calculator to demonstrate the benefits of improving workplace conditions. A quick Google search identifies some available calculators: Equipois Return on Investment (ROI) Calculator and
Cornell University Return on Investment (ROI) Estimator are a couple of them.
Common among these calculators is that they are based on traditional, lagging indicators – such as injury and illness cost avoidance. When using such calculators, you hope your improvement will eliminate or reduce future injury and illness cost. As I have heard many times – hope is not a strategy. What happens if your improvement does not reduce future injuries and illnesses? Typically, bad things for your career. Is there a better way? Yes. An effective ROI calculator needs to be based on meaningful business metrics, or leading ergonomic indicators, such as ergonomic risk reduction and/or increases in productivity. Calculators that do this include Washington State Ergonomics Cost Benefit Calculator and Humantech’s cost justification worksheet.
Hopefully, in the near future, we can attain the “Holy Grail” of ergonomics return-on-investment calculators. These calculators would include all of the above mentioned indicators, as well as inputs for enhancements in product quality (i.e., reduction in product defect, material scrap, warranty claims, etc.), as well as more detailed ergonomic risk reduction inputs and more sophisticated epidemiological data. Luckily for us, some of the best and brightest researchers and practitioners are working on such models. Stay tuned.