Staffing Safety: Determining ROI
As most staffing firms know, OSHA has and will continue to monitor this industry very closely to ensure all safety requirements adhere to their standards. We actually just did a webinar on this very hot topic. Given OSHA’s Temporary Worker Initiative and the importance of safety in the workplace, having a formalized program has become vital. An area where most companies struggle though is how to properly track ROI within their program.
There are several different approaches to take when measuring safety ROI, and all those will be different based on the company’s goal. Once goals are in place (e.g. reduce frequency of claims by X, reduce severity of claims by X or reduce workers’ compensation premiums by X), a good place to start is finding your total cost of risk. This can be determined by figuring out both direct and indirect costs.
Direct/hard costs are those that can easily calculated or recorded, including:
- Insurance premiums
- Attorney fees
- Lost wages
- Medical costs
Indirect/soft costs go beyond the recorded numbers above and include:
- Accident investigation and correction
- Schedule delays
- Administrative expenses
- Workplace stress, lost productivity, low company morale
- Training and compensating replacement workers
- Poor Reputation
Indirect costs can be hard to measure, but we do have a quick "Indirect Costs Calculator" that can help. Once you know your total cost of risk, your goal in measuring safety is to balance your investment vs. the return expected.
How to Show ROI
OSHA studies indicate for every $1 invested in effective safety programs, a company can save $4 to $6 as illnesses, injuries and fatalities decline. With a good safety program in place, costs will naturally decrease. It’s important to determine what costs to measure to establish benchmarks, which can then be used to demonstrate the value of safety over time.
For example, the American Society of Safety Engineers reported that a fall protection program implemented by a U.S. construction company reduced their accident costs by 96 percent - from $4.25 to $0.18 per person-hour.
Considering the statistics, safety experts believe there’s direct correlation between safety and a company’s profit. We’re committed to helping you establish a strong safety program that protects both your workers and bottom line.
- OSHA Temporary Worker Initiative & Client Selection Webinar
- Indirect Cost of Losses Calculator
- How Icebergs and Indirect Costs Relate
- Safety Culture Performance Metrics Webcast
- OSHA Launches Initiative to Protect Temporary Workers
- OSHA Emphasizes Joint Responsibility Between Temporary Staffing Firms and Clients
- Safety E-Book
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