Example #1B: In Example 1A, ACME reviewed their past three years in claims and injuries finding they had 2 back injures in year one, 1 back injury in year 2, and 3 back injuries this year for a total of six back injuries in the past three years performing the same task of moving full boxes from a conveyor system to a pallet on the floor. Over three years, ACME lost about $66,000 in profits due to those six back injuries. If nothing was done by ACME to eliminate or control the hazard causing the back injuries, ACME was set to have on average two back injuries per year, costing $22,000.00 per year in lost profit. With the initial investment of $45,000.00, the lost profit is gained after one year and 5 months, with the remaining 7 months of the second year being profitable and the subsequent years being profitable by $22,000.00 each year due to the elimination of two back injuries per year.

 Along with the gaining of profits associated with the reduction to zero of back injuries, consider how much more profit is gained in productivity through the automation or simplification of the task of moving full boxes from a conveyor to a pallet on the floor.

Formula for Return on Investment:

Indirect Cost = Direct Cost x OSHA Cost Multiplier

Loss Savings annual amount = Indirect Cost x Injury Reduction in percent

Period to Gain an ROI in years = Investment/Loss Savings annual amount