Many ergonomic improvements can be implemented with low capital expenditures.

However, when an ergonomic improvement requires a larger capital expenditure, cost can become a barrier to implementation.

In these situations, it’s important to make a compelling business case for the ergonomic improvement using cost justification to prove a return on investment (ROI). Once you’ve clearly defined the business case for the best ergonomic improvement, you are more likely to get the resources you need to move the project forward.

To help quantify the value of ergonomics, the Washington State Department of Labor & Industries developed a very useful cost-benefit calculator based on ergonomics program data collected in 250 case studies.

Getting started with cost-benefit analysis

At this point in the ergonomic improvement process, you have:

• Conducted ergonomic assessments to determine risk is above an acceptable limit.
• Prioritized this job task for improvement
• Conducted what-if analysis so you understand how workplace changes would impact ergonomic risk factors
• Generated (and documented) improvement scenarios with the ergonomics team

Now you’re ready to run a cost-benefit analysis on the improvement scenarios you’ve documented so you understand the ROI of each.

The ergonomics cost-benefit calculator inside the ErgoPlus Platform, based on many assumptions made in the Washington State cost-benefit calculator, is intended to be used under the following conditions:

• Your company directly pays the costs of workers’ comp claims (i.e., self-insured).
• You have an active ergonomics program and you pretty much know what you’re doing.
• You’re considering implementing one or more ergonomics solutions to address specific problems (e.g., back and shoulder injuries from lifting).
• You’d like to evaluate a few different options.
• You’re expecting a payback period of less than one year. (The payback period is the time that it takes for the benefits of a solution to pay for the costs of implementing it. Most ergonomics solutions have a payback period of less than one year.)

Using the ergonomics cost-justification calculator

The cost-justification tool will take the inputs of employee information and injury cost data for the job task and apply them to the information you entered for each improvement scenario.

Employee Information

Employees who perform jobs with ergonomic risk factors are only 85% productive. By entering this information, we’re able to estimate the increase in productivity for each improvement scenario.

# employees doing this job task

Enter the total number of employees who regularly perform this job task.

Employee average salary

Enter the average salary of employees who regularly perform this job task.

Injury Cost Data

By entering the injury cost data for this job, we’re able to estimate the decrease in direct and indirect injury costs for each improvement scenario.

This past year

Enter the total number of injuries to employees who perform this job task over the previous 12 months.

The year before

Enter the total number of injuries to employees who perform this job task over the previous year.

Two years before

Enter the total number of injuries to employees who perform this job task the year before that.

Outputs

The outputs of the cost-justification tool are:

• Average direct cost of injuries
• Average indirect cost of injuries
• Average total cost of injuries
• Estimated reduction in claims (%)
• Direct cost reduction
• Indirect cost reduction
• Total cost reduction
• Productivity increase (%)
• Productivity gain
• Estimated total annual benefit
• Estimated benefit at year 3
• Estimated benefit at year 5
• Cost of control
• Annually recurring costs
• Estimated net benefit, year 1
• Estimated net benefit, year 3
• Estimated net benefit, year 5
• Estimated payback period

Ergonomics cost-justification example