How to Calculate Your Safety ROI
Ready? Grab a pen and paper, or don’t—you probably won’t need them. Here’s a calculation based on the NSC’s model:
your safety investment × 2 = your ROI
It’s that simple. Take your safety investment, double it, and pay it back to your organization. For every dollar spent on safety today, you save $2.00 in the future.
This is a conservative estimate, by the way. Safety+Health magazine reports that “[v]arious studies have shown $1 invested in injury prevention returns between $2 and $6.” Indeed, a more accurate calculation of ROI may be to triple or even quadruple that initial investment.
Putting the Cost of Prevention into Perspective
As self-evident as those results may seem, some decision makers may remain unconvinced of the value of a safety culture. Perhaps they’ve never dealt with a major accident and they believe the risk is so insignificant as to be essentially nonexistent.
Let’s put things into perspective: a single workplace fatality can threaten to sink a company.
The Centers for Disease Control and Prevention estimate a fatal injury may cost nearly $1 million, while the National Safety Council places it around $1.4 million. And when you factor in the indirect costs of lost productivity, employee replacement, insurance, attorneys, and so forth, the cost jumps to $3 million on average.
In terms of leadership, financial strategy, and fiduciary duty, there’s no reason to ignore workplace safety. Think of it this way: you can either double your company’s investment or put millions of dollars on the line. Which choice will your organization make?
Making a Safety Culture Truly Cultural
We hear the term "safety culture" thrown around a lot today. But does it mean anything?
This white paper reviews what safety looks like today, where safety needs to change, and how to create a safety culture.