Return on Investment: Making a Business Case
The COST of Injury… IS PREVENTABLE!
- According to the Bureau of Labor Statistics, the average time away from work for a work injury with lost time is 7 days. This increases to 9 days, when narrowing the scope to just musculoskeletal disorders (MSDs). Lost time can increase to an average of 16 days, with aging workers.
- MSDs account for 29% of all workplace injuries (BLS).
- Robert P. Hartwig, the chief economist at the Insurance Information Institute in New York, puts the average medical cost per claim at $15,300 (June 2008).
- National Safety Council cites the average cost, medical & indemnity per MSD work injury at $17,065 (2005).
Work Performance spent 2 years on-site with an aerospace manufacturer and supplier to Boeing. During that time Work Performance facilitated significant savings for the employer.
Year 1: Savings of $273,040. Injuries declined 62%, from 26 to 10. (16 injuries x $17,065)
Year 2: Savings of $51,195. Total injuries remained at 10, but MSDs declined 30% to 7.
(3 injuries x $17,065)
9 potential recordable injuries were avoided in year 2, saving a potential $324,235!
On-Site Ergonomics Translates into Cost Savings!
The Return On Investment continues…
Liberty Mutual Report on CFO Survey (2005)
- 95% of CFOs cite ‘increased productivity’ and ‘decreased costs’ as primary benefits of safety & health.
- 61% of CFOs cite a ROI of 2:1 for each dollar spent on injury prevention.
(www.libertymutualgroup.com Link from OSHA: Making the Business Case For Safety And Health) http://www.osha.gov/dcsp/products/topics/businesscase/benefits.html)
American Society of Safety Engineers (2009)
- Workplace injuries cost one-quarter of each dollar of pre-tax corporate profits.
- A safety, health & environmental manager for an environmental services company cites an 8:1 ROI on safety and health programs.
- OSHA’s Office of Regulatory Analysis cites an ROI of 4-6:1 for companies that invest in quality safety and health programs.
- Nine employers participating in Oklahoma’s Safety Pays program reduced workers’ compensation costs from 47% to 97%, and boasted zero lost-time injuries.
(www.asse.org/professionalaffairs/govtaffairs/ngopsi10/php Link from OSHA: Making the Business Case For Safety And Health http://www.osha.gov/dcsp/products/topics/businesscase/benefits.html)
Center for Chemical Process Safety of American Institute of Chemical Engineers (2006)
CCPS member companies reported significant direct cost benefits of up to:
- 5% increase in productivity
- 3% reduction in production costs
- 5% reduction in maintenance costs
- 1% reduction in capital budget
- 20% reduction in insurance costs
(The Business Case for Process Safety – 2nd Edition. ISBN 08169-1026X. CCPE of AIChE. Link from OSHA: Making the Business Case for Safety and Health http://www.osha.gov/dcsp/products/topics/businesscase/benefits.html)
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