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The Business Case for Safety – Justifying an Investment in Ergonomics



Uploaded by: Terry Wilkinson on 01/18/2012

Author: Glenn Demby

Publication Date: 4/17/2006

Publication Source: ASSE

Summary: This article provides a strategy for safety professionals to financially justify an investment in ergonomic equipment to their CEO’s.


Body:
THE BUSINESS CASE FOR SAFETY
Justifying an Investment in Ergonomics,Part 1 of 2
 
By Glenn Demby
 
Musculoskeletal disorders (MSDs) such as carpal tunnel syndrome and back strains are costing U.S. and Canadian companies a fortune. They’re responsible for one-third of all workplace injuries. And this may be a conservative estimate since these injuries often go unreported. To make matters worse, MSDs are among the most expensive and complicated to treat. They therefore exert upward pressure on workers’ compensation premiums.
 

With so much at stake, you’d think that all companies would be willing, if not eager, to invest in ergonomically-sound work processes and equipment. But many of them are not. In fact, getting a CEO to support an ergonomics program can be a major challenge for safety directors. One of the surest ways to cut through this resistance is to link ergonomics to profitability. Here’s a strategy to help you do that. Here’s a strategy to help you do that.

 
Why CEOs Resist Investing in Ergonomics
 
Regrettably, there are still large numbers of CEOs who don’t "buy into" ergonomics, even though the costs and adverse effect of MSDs on a company’s bottom line have been well documented. What accounts for this resistance? There are at least two explanations: 
 
1. Lack of a Specific Ergonomics Regulation
 
Historically, one of the best ways to build a business case for a safety initiative is to point out that it’s necessary to ensure compliance with a specific law or regulation. For example, if your hazardous materials training program needs revamping, you can always cite the training requirements in the OSHA Hazard Communication standard.
 
But playing the compliance card doesn’t work as well with ergonomics. That’s because there is no OSHA standard on ergonomics. OSHA came close to adopting one in 2001. But the Bush Administration and Congress took it off the table. True, you can argue that ergonomic measures are required under the "general duty" clause, Sec. 5(a)(1) of the OSHA statute (which requires employers to provide a workplace that’s "free from recognized hazards that cause or are likely to cause death or serious physical harm"). But a general duty isn’t as compelling as a specific one.
 
2. Subjective Factors
 
Ergonomics also has something of an image problem. The average CEO can relate to risks of abrupt and violent injuries such as amputations, asphyxiation and falls. But MSDs don’t feel quite as dangerous. Consequently, there’s a tendency to dismiss ergonomics as "soft and squishy." "Too many CEOs associate ergonomics as a trendy thing involving oddly-shaped chairs and keyboards," according to one leading consultant.      Although they may be irrational, these subjective factors do exist. And they make ergonomics harder to sell.
 
Conclusion
 
Next week, in Part 2 of this series, we’ll look at two strategies safety directors can use to overcome CEO resistance to ergonomic measures. We’ll also cite case studies that you can use as evidence that eliminating ergonomic hazards from the workplace directly contributes to profitability.
 
 
 
THE BUSINESS CASE FOR SAFETY
Justifying an Investment in Ergonomics, Part 2 of 2
 
By Glenn Demby
 
Musculoskeletal disorders (MSDs) are the Rodney Dangerfield of injuries: They get no respect. That’s too bad because MSDs deserve respect. They now make up about one-third of all reported lost-time injuries; they also tend to be expensive to treat. Last week, in Part 1 of this series, we looked at why so many CEOs resist spending money to prevent MSDs. Let’s now look at how to make a business case to overcome this resistance.  There are also four brief case summaries in the Tools section of SafetyXChange.

The ROI Angle
As with any other safety expenditure, one of the best ways to justify an ergonomics program is to show your CEO that it will generate a positive return on investment (ROI). In fact, ergonomic programs generally are a good investment. For example, Arthur Little, a leading business consulting firm, has done more than 50 ergonomics audits in recent years. A whopping 95 percent of them resulted in a positive ROI.

There are also numerous case studies demonstrating that investing in ergonomics boosts profitability. The case studies are important because most CEOs like it when the safety director can justify a safety program by pointing to actual examples showing how other companies made money by implementing the program.

The Link to Productivity
"Productivity" is one of those terms that resonates with the CEO. So any time you can make the case that a particular safety program will increase productivity, it’s a huge advantage.

You can make such a case with regard to ergonomics. A 2003 study from the University of Texas Health Science Center was the first to examine the link between individuals’ ergonomic well-being and their economic performance. The results were dramatic. The study found that implementing ergonomic measures enabled workers to make significant gains in productivity.

The study lasted over a year and involved two companies and more than 200 workers who sat in front of computers for at least six hours every day. The workers were divided into three groups:

Group 1
, who got ergonomic training and a highly-adjustable chair;

Group 2, who got the training but not the chair; and

Group 3, a control group that didn’t get the chair or the training.

By the end of the year, the workers in Group 1 had achieved a staggering 17.8 percent increase in productivity, a benefit to the companies of more than $25,000 per worker. Considering that the chair and training cost only about $1,000 per worker, this turned out to be one heck of an investment—one that paid for itself after just 10 days.

Conclusion
As a safety director, it falls to you to prove to your CEO that there’s more to ergonomics than oddly-shaped keyboards. Investing in ergonomic solutions prevents injuries and contributes to a company’s bottom line.



TOOLS

Ergonomics ROI: Four Case Studies
Here are four case studies you can cite to demonstrate that ergonomics has a positive ROI:

1. 3M
Workers packing cartons of epoxy products with two different size pails, gloves and a stir stick started experiencing wrist and back pain. 3M switched to plastic pouches, eliminating the need for the pails and sticks. This reduced reaching motions. The aches went away. And 3M is now saving $250,000 per year.

2. KeySpan Energy
The gas and electric giant was experiencing a rash of repetitive stress back injuries. It called in an ergonomics consultant to do a comprehensive workplace assessment. The consultant made a series of relatively low-cost solutions. Implementing all of them cost KeySpan $200,000. But it reports that for each dollar spent it’s now saving four dollars in injury prevention.

3. Goldkist Inc.
The second largest chicken processor in the U.S. reconfigured an inspection line in which workers removed rejected birds from the conveyor, carried them six feet to a rejection line and hung each bird at head height. In addition to eliminating the six-foot walk, Goldkist reduced the height of hanging to elbow level, improving productivity and reducing shoulder stress. As a result of these and other ergonomic initiatives, Goldkist’s recordable injury rate is 10.33 per 100 workers, 38 percent less than the industry average of 16.6.

4. Pratt Whitney
The aircraft manufacturer has implemented a wide range of ergonomic solutions, some costing as little as $2. Even solutions costing $100,000 have shown a positive ROI in less than three months, according to a P W health and safety engineer.
Author Biography - Glenn Demby, Esq.

I'm a lawyer. I spent three years practicing corporate law at a Wall Street law firm. I worked like a dog, made lots of money but had no time to spend it. So I quit and went into publishing where I specialized in writing and developing newsletters that explain complicated legal issues to business professionals in plain English. My philosophy on legal writing: Don't teach people the law; tell them how it affects their jobs and what to do about it. I spent 14 years practicing this credo with a New York City company called Brownstone Publishers. I joined Bongarde Media in July 2004 where my duties include acting as Editor-in-Chief of SafetyXChange. As you can see from the attached photo, I didn't have to give up a career in modeling to pursue a career in publishing.

ERGONOMICS ECONOMICS
By the Numbers
 
By Glenn Demby
 
One of the first workplace safety initiatives of the George W. Bush Administration was the scuttling of the proposed OSHA ergonomics standard. Critics of the standard from the Administration, Congress and industry claimed that the standard would have been too costly for businesses to implement. But they also acknowledged—and still do acknowledge—that work-related musculoskeletal disorders (MSDs) represent a major drag on the U.S. economy. How big a problem?
 
Here are some numbers from OSHA to consider. Keep in mind that OSHA published these figures in 1999 at a time it was advocating the adoption of the ergonomics standard. So they need to be taken with a grain of salt, particularly the estimates regarding the costs to business of implementation. However, the figures present a fair portrayal of the dimensions of the cost of MSDs.
 
 
33: The percentage of all injuries annually reported by U.S. businesses to the Bureau of Labor Statistics that are attributable to work-related MSDs.
 
$15-20 Billion: How much these MSDs cost businesses in workers’ compensation claims. 
 
1: MSDs’ ranking among the leading source of work injuries and illnesses. 
 
28: The estimated percentage of workplaces that have implemented an ergonomics program.
 
50: The estimated percentage of workers who work in a workplace that have an ergonomics program.
 
3 Million: The estimated number of MSDs that the OSHA ergonomics standard would have prevented over 10 years.
 
$22,500: The estimated amount the average business saves in direct costs for each MSD it prevents. 
 
$4.5 Billion: OSHA’s estimate of how much it would have annually cost businesses to implement the proposed ergonomic standard.
 
$9 Billion: OSHA’s estimate of how much businesses would have saved each year in the first 10 years if the proposed ergonomics standard had been implemented.
 
 
 
 
Source: OSHA, "The Need for an Ergonomics Standard", 1999.
 
 


Keywords: business of safety,case studies,ergonomics,ergonomics program management,laws, standards, and regulations,musculoskeletal disorders,OSHA (Occupational Safety and Health Administration),productivity,return on investment (ROI),safety standards,workers compensation,workplace ergonomics,workplace health and safety,business case,CEO,SH&E investment



 

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