Have you calculated your company's Safety ROI?

Investing in workplace health and safety isn’t just about compliance; it’s a strategic move that pays dividends in both human and financial benefits.

Here are 6 ways that having a robust health and safety program can save companies money.

To calculate ROI, consider the following steps:

1. Calculate Injury Costs: Understand how much injuries cost your organization. This knowledge is essential for evaluating the impact of health and safety.

2. Identify Financial Benefits (Net Gains): Look for the financial benefits resulting from your health and safety program. These may include reduced medical expenses, improved productivity, and lower turnover rates.

3. Calculate ROI: Compare the costs of your health and safety initiatives to the financial benefits. The formula for ROI is straightforward: ROI % = ((Net Gains-Cost of Investments)/Cost of Investments)) x 100 Here's an example. Your company's safety stats show that every year, like clock work, 12 employees miss an average of 21 work days each due to strains and muscle fatigue. You decide to implement a few health and safety programs focusing on strain and fatigue prevention, with ergonomics controls such as job rotation, calisthenics program, wellness programs, and provided hazard identification incentives and you saw a steady decline from 12 to 1 employee and the 1 employee only missed 2 days of work. Your cost of injury (wcb rates: # of claims, cost of claims) have gone down and you calculate the net gains (reduced injury costs, savings in hiring cost, onboarding and turnover) to be $150.000.00. All the programs you've implemented costs a total of $60,000.00. ROI = ((150,000 - 60, 000)/60,000)) x 100 = 150% This means that the $60,000.00 you spent generated $90,000.00 in returns. Every dollar you spent in the health and safety program made a net gain of $1.50.
   

Something else to consider....

Not all factors that are as a result of a good healthy and safe workplace are quantifiable. Intangible factors such as improved brand reputation, attractiveness to investors and improved employee morale are worth mentioning. These don't make it into the ROI calculations, yet are valuable benefits that companies should consider as a longer term outlook when measuring the success of a comprehensive health and safety program.