April newsletter:

Ergonomic Cost Justification – Helping Upper Management See the Big Picture

You’ve identified the ergonomic hazards. You’ve developed solutions for how you’re going to address them. You’ve done research into the costs and resources needed to implement the solutions. And yet you just can’t seem to convince upper management to invest into the change.

ROI of ergonomicsIn some cases, it’s not about the solution or recommendation, it’s about how the information has been presented. Let’s change that narrative and talk a bit more about return on investment (ROI).

Remember, no matter the company or organization, everyone is accountable to a budget. By focusing on the return this initiative is going to have, you might make your ROI stand out and your project really resonate with upper management.

Factor 1: WSIB and Injury Claims

Step number one requires identifying the number of employees that have experienced an MSD or near miss while performing the job. Generally, the more frequent or severe an injury(s), the more the need for some sort of intervention. Look at your WSIB premiums and consider the direct costs associated with this worker being off (e.g. lost wages, retraining time).

Factor 2: Control Effectiveness and Cost Estimation

Step number two requires that you to estimate the overall effectiveness of, and the cost to, implement the solution to address the identified hazards. Ask questions like: 1) “what is the cost of this intervention?”, 2)“does the control eliminate or reduce exposure to the hazards?” (determines impact of intervention), and 3)”what other controls/options are out there that might also address this issue”. Do your due diligence and know the ins and outs of what you are proposing, alternate solutions and the cost of each so that you are building your business case in the best way possible.

Step 3: Estimate the Benefits and Payback

benefit vs cost of ergonomic services

In this stage, it’s important to attempt to provide a sound estimation of the overall benefits that the control implementation will have, specifically from a financial standpoint. Estimate the percentage of reduction in claims as well as the reduction in associated costs (e.g. WSIB premiums, employee wages) and indirect costs (e.g. training, production changes, re-training). Doing this should give you a good estimation of the expected savings and how quickly management should see a return on their investment.

Next, it’s time to calculate the ROI. Add and subtract all the costs to implement the control and the estimated benefits and returns that the company can expect over the next year. And keep in mind, the greater or more quickly the return, the more likely the approval from management becomes.

Show upper management and company owners the positive numbers. This process is a methodical approach, but one that should be a standard practice in generating and driving ergonomic change initiatives at your facility.

Still need some help with your presentation on supporting the ROI of Ergonomic Initiatives? Register to attend our April webinar to learn about our most commonly requested ergonomic services and how our clients have put them to use to increase their bottom line.

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