Ergonomic programs often lack resources: people, time and money. Part of the problem is demonstrating the financial return of ergonomic improvements and ergonomic programs.
OSH professionals can measure the value of improved workplace ergonomics in more ways than the traditional reduction of injury costs. Improved productivity, quality and employee retention can provide greater returns.
This article shares various models of cost justification and the elements of determining the return on investment, and provides guidance on the investment and results data needed to calculate the return.
Musculoskeletal disorders (MSDs) continue to account for largest proportion of recordable workplace injuries (45% to 65%), and employers are focusing on establishing or improving their ergonomics programs to address this loss. Benchmarking studies (Humantech, 2011; 2014a, b) suggest that a common challenge with ergonomic programs is the lack of resources such as people, time and money. Why don't these alarming statistics justify the resources for improving workplace ergonomics? Part of the problem is demonstrating the value or financial return produced by ergonomic improvements and programs. OSH professional must be able to calculate and demonstrate this value to sell these programs to upper management.
This article aims to
share various models of cost justification and the elements of determining the return on investment (ROI) of an ergonomics program; and
provide guidance on the investment and results data needed to calculate the return.
In today's business climate, any initiative that does not deliver measurable (short-to medium-term) value is considered an option, not a requirement. Ergonomic improvements and programs are more likely to be supported and accelerated if they fit into a cost justification process.
Cost justification is a normal business process that managers and executives use to weigh the costs and benefits of various improvement initiatives. Managers are challenged each day to do more with less and are often measured on how quickly they can improve productivity and quality.
enables communication between safety, engineering and management;
takes the focus away from injuries (a reactive measure);
focuses on taking action before an injury occurs (a proactive measure);
enables a firm to prioritize countermeasures (e.g., compare payback periods);
makes good business sense and affects the bottom line.
Management must often weigh the merits of ergonomic improvements against other potential projects. Ergonomic projects that produce an ROI are both effective and efficient in reducing hazard exposures.