Calculating Return On Investment from Ergonomics
Demonstrating the value of an ergonomic improvement or an ergonomics program is a challenge for most organizations. During our 2014 benchmarking study on calculating return on investment (ROI) for ergonomics, we found that most program managers did not have or know where to get the data from which to calculate ROI. This is unfortunate, because business leaders make business decisions on the value of their investments. Committing to, and investing resources in workplace ergonomics is no different. For your ergonomics program to be successful, you’ve got to show your leadership team what they’ll get for their investment.
“Leave no stone unturned to help your clients realize maximum profits from their investment”.
Arthur C. Nielsen
Calculating ROI for ergonomics is based on the basic ROI calculation (e.g. Benefits-Cost/Cost). Since ergonomic improvements can benefit several aspects of performance, the ROI for ergonomics is:
ROI = Benefits (Productivity + Quality + Employee Engagement + Injury/Illness) – Cost
This calculation demonstrates the value provided by ergonomic improvements, which provides a tangible and applicable measure to support and sustain support of your program. As Warren Buffett stated, “Price is what you pay. Value is what you get.” Communicating value of ergonomics will help you overcome resistance to the cost (e.g. price) of workstation improvements, training, ergonomics team time, and other visible costs.
For additional information and the studies backing this, check out Humantech’s position statement on Calculating Return on Investment for Ergonomics. A summary of the 2014 study on Cost and ROI of Ergonomics Programs is also available.