Calculating Return On Investment on Ergonomics
By Johnathan Puleio, CPE & Jenny Zhao, AEP
Snapshot…
- Despite overwhelming evidence that ergonomics interventions result in a return on investment ranging from 3:1 to 15:1, organisations continue to struggle to obtain appropriate funding for their programmes
- To many managers, Ergonomics is not part of their business strategy.
- There traditionally has been a lack of clearly defined performance metrics in ergonomics
- There are two types of costs considered when calculating the ROI
- Direct Costs: Incurred in response to an injury or discomfort, most notably worker’s compensation and additional medical care costs
- Indirect Costs: Include increased insurance premiums, lost productivity and decreased work output, administrative time, Turnover, new personnel, replacement costs of materials, tools and property.
- Indirect costs can outweigh Direct Costs by more than 3:1
- When calculating ROI costs can be categorised into three areas:
- Costs Saved
- Costs avoided
- New opportunities.
- In 2009 in the USA, there were over 3.2 million over extension injuries (1:100 people) – eliminating or controlling repetitive motion injuries is estimated to save a company US$ 27,700 per case
