A way to show safety has a positive effect on a company is to show the return on investment (ROI).  How much will a company receive in return for an investment into making the workplace safer or reducing the number of injuries and how long will it take to realize that savings? Since workers compensation insurance covers the costs of medical bills and time away from work, if needed, these are considered direct costs and do not figure into the equation, only to determine the indirect costs.

Example #1A: ACME had three workers suffer from back injuries in the past year. The average cost of each back injury was about $10,000.00 in Direct Costs. Using the OSHA Cost Multiplier table, the Indirect Costs total $11,000.00 for each back injury for a total being $33,000.00 in indirect costs. Looking back at the past three years in claims and injuries, there have been 2 injures in year one, 1 injured in year 2, and 3 injured this year performing the same task of lifting heavy and awkward boxes from the conveyor system to a pallet on the floor after the boxes are filled. After an analysis is performed on the task of moving the full boxes from the conveyor to a pallet, it is determined that the best way to eliminate the hazard and risk of injury is through engineering controls. ACME is looking to make modifications to the sequence of task steps and purchase equipment that will ultimately eliminate the task of moving a full box from a conveyor to a pallet. The total cost of the modifications and new equipment is $45,000.00. Because this new equipment and modifications are engineering controls and will completely eliminate the task and the associated hazards, the risk of back injury is reduced to zero, in other words a 100% reduction in injuries. The reduction in back injuries means there is a loss savings of $33,000.00 annually after the equipment is paid for. To determine the return on the investment (ROI) of $45,000.00 and how long it will take to gain that return, in years, the cost of the investment is divided by the amount of savings in a given a time period. In this example, $45,000.00 divided by $33,000.00 equals about 1.4 years.