Return on investment calculator

Hi, everyone. Thanks for joining me on this webinar today, looking at an introduction to the Office of Industrial Relations return on investment calculator.

If you have any questions regarding the presentation, the ROI calculator or you may wanna get involved with a case study and any research we're doing at the Office of Industrial Relations, please contact me at OIRdata@oir.qld.gov.au.

Also, feel free to type in any questions you may have throughout the webinar. If I don't get around to answering them throughout the webinar, again, please email at the address seen on this slide. Or, alternatively, we'll email the registrants with answers to the questions I didn't get around to.

We'll flick to our first polling question. Have you had a chance to look at or to use the ROI calculator before this webinar?

All right, fantastic to see that about 60% of you have had a look at or had a chance to use the calculator. The key points for today are to, one, get a general idea of how you could apply the ROI calculator to help you make a business case for your health and safety investment, whether that be an engineering solution or an administrative control.

Two, to get an understanding of what the Office of Industrial Relations has been doing in this space, as well as the factors and information required to be input into the ROI calculator.

Return on investment, what is it? Most of you will know what it is. Simply put, it's the total benefits divided by the total costs. Usually it's presented as a percentage, like an ROI of 150% or $3.10 of benefits gained per $1 of a cost benefit.

This information is typically used to calculate an ROI, and can also be used in a cost benefit analysis. We typically use ROI to evaluate the efficiency or cost effectiveness of an intervention, and compare this data across multiple intervention options. For example, we might wanna compare elevated work platforms or full rest options and so on to reduce the risk of working at heights.

Essentially, we wanna answer the questions like is it worth it, is it bang for buck and which option really gives the greatest productivity gains.

What's the Office of Industrial Relations done so far? We, with our research and also industry feedback, found that there weren't many practical cost benefit tools that really captured the true cost of a workplace incident, and implementing health and safety interventions. We sought to develop our own ROI calculator that would be available online, as opposed to Excel spreadsheets that you can download and probably get lost in your number of files on your computer, that would capture both positive and negative ROI.

We wanna do this because we believe it's really important to know what works and what doesn't across different business sizes and industry sectors. On our website now, we have published a few case studies showcasing the costs and benefits of businesses, like the Port of Brisbane and BP Wild Bean Cafe at their travel centers, from investing in their health and safety controls.

We will flick over to our second polling question. What would you like the Office of Industrial Relations to do more to support you to justify the business case for health and safety interventions? About 1/2 of you have said that you'd like to see more resources on our website. For example, guides on how to do things, checklists, as well.

We'll definitely take that feedback into account and endeavor to put more of these resources out for you. Most of you would agree that health and safety practitioners are increasingly required to perform cost benefit analyses or justify the investment to senior management. However, the true cost is often not taken to account.

Just in Queensland alone, it's estimated that $5.8 billion is attributed to the total economic burden of work-related injury and illnesses. It is a significant indirect cost associated with workplace incidents. What information is actually required to enter into the ROI calculator?

The direct costs involve the upfront investment, such as $8,000 for a new elevated work platform, or perhaps even as well as the time and wages spent for the health and safety managers to consult with workers, supervisors and managers prior to implementing the control in your workplace, as well as any ongoing costs, such as, for example, paying a contractor $100 an hour for maintenance work. We move onto the indirect or hidden costs.

Many of the indirect costs to businesses that aren't necessarily captured when evaluating the ROI of implementing a new control is the cost of avoiding incidences and minimizing the risk of an incident occurring. These costs include immediate incident costs, such as the time taken to provide first aid and any immediate production downtime. Investigation costs, so all the work hours involved with investigating the cause of the incident, if required. Any damages to your own plant and equipment, or, for example, product that you need to ship to your customers. Finally, the loss of productivity associated with the injured worker, such as their capacity for work, how long has it taken for them to get back up to speed and how long it has taken for a replacement worker, if necessary, to be able to fully perform in the job.

We had a question here from Jeremy. Is it possible to add a link to our website to the ROI calculator? We'll definitely talk to our communications and awareness engagement team to ensure that this is allowed. Just with government, obviously, privacy concerns, but we'll definitely get back to you, Jeremy.

Finally, obviously, the benefits or the health outcomes of your health and safety solution, such as health outcomes and productivity gains. These could include avoidance of lacerations occurring, so due to new machinery or guarding, and, for example, time saving of, say, five minutes, of the job taking five minutes less than it used to. Obviously, there are some intangible benefits, such as employee morale, culture shifts and increased capability, for example, that are quite difficult to measure. But they should be presented alongside any ROI or cost benefit analyses, anyway, as part of the whole story or justification as to why a health and safety investment's really worthwhile.

We'll flick over to our third polling question. Would you think this calculator is more useful for, A, looking back in time, so retrospectively, to evaluate the ROI of the health and safety control you've already implemented? B, predicting an ROI estimate for a control you're thinking of implementing, so looking forward in time? Or perhaps you'd think that you probably would use this for both?

We see here that 1/2 of you probably would use it for both looking at it back in time, so retrospectively, as well as in the future, so forward estimate of your return on investment, which is great.

This, on our Work Safe website, is where the ROI calculator lives. It's part of our e-tools, which were developed to help better manage workplace risks, including heat, noise and hazardous manual task risks. Clicking onto the ROI calculator, I'll just share my screen. Brings us to this page. It's, firstly, a disclaimer ensuring that all information is kept private and confidential, unless otherwise instructed by yourself. If you read through that and you click agree, we come to our preliminaries page.

This asks for basic demographic information. Obviously, for example, what type of health and safety interventions did you undertake. We'll just put in webinar case study, machine guarding, for example. Have you experienced any reductions in injuries attributable to the intervention? If we were doing, if we were thinking that, yes, we expect that this particular intervention will reduce, say, for example, two lacerations a year, we'll click yes.

Sometimes you might not necessarily be able to predict whether it will reduce any injuries or illnesses in the workplace. For example, if you are implementing administrative controls, you might wanna put no or unsure. We'll select what industry or business you're in. For example, manufacturing. The number of employees you have in your business. Optional, but if you wanna get involved with a case study, for example, you can enter your name.

Olivia Yu, Proprietary Limited. My name and my email address. We'll go OIRdata@oir.qld .gov.au. That brings us to step one of eight of immediate costs, looking at the typical incidents. The first five steps look at the indirect or hidden costs. For example, your time to provide first aid. That might have taken two hours, two total man hours, total cost of $50 per person, and so forth. It looks at transporting to the hospital or physiotherapist. Any downtime for effective workers at the time of the incident or the injury and time to make areas safe. For example, some of the costs and so forth.

The good thing about this is that you can put in some comments to provide yourself some notes about the machine guarding purchase on 3rd of the 12th, for example. You can save that. You can print it or save it as a PDF. You can also save the link, and email the link to yourself if you'd like to come back to it later. Also, the good thing about this is that you can flick through quickly and have a look at all the types of information that you would or possibly might need to collect without actually entering any information. It's good to have a look the first time, and then come back to actually properly input your data.

It is okay to leave fields blank. Not every single piece of information will be necessarily relevant to your business. You'll only enter information that's relevant to your business. Also, your browser or your internet browser, for example, Google Chrome or Firefox, will automatically save your progress through the internet cache, as well as you do need to complete this within 30 days. Otherwise, your internet browser will forget the stored information in the browser. As I mentioned before, please save your results as a PDF that you can print out and refer to later.

We have a question here from Roslyn. Can the ROI calculator be used to show the benefits of implementing a health and well-being program? We did develop this calculator with the, I guess, to be generic and to be broad to be able to capture both, I guess, your acute injuries, such as lacerations, cuts and all that kinda thing, but as well as health and well-being programs. As you can imagine, not have, you probably enter a lot of man hours or work hours involved, as well as the productivity gains, in terms of you expect, say, a 30% increase in productivity, a 20% increase in productivity, and measure it that way, in terms of wages, perhaps, per worker involved. Hopefully that answers your question.

We've come to the end of the presentation. Are there any questions? Yeah, we have one from Aaron. Will the return on investment calculator extend beyond personal injury to include environmental and property costs? Well, we try to include property costs, in terms of damages, but that's directly to the business. Environmental costs, it could be included as other in this case. It's really quite generic at this point in time. We do appreciate any feedback, in terms of user experience, interface, as well as the structure of the calculator. That might be a potential thing that we do add in the future.

Does the link expire in 30 days is another question. If so, do you receive a reminder that it's expiring? We currently do not have a reminder that it will expire, say, within three days or five days. You will have to save your results by that time. Yeah, we'll probably have to think about putting a quick reminder or an email reminder as a feature of this tool. The link itself doesn't actually expire in 30 days, but just that your internet browser may forget the information if you don't save it previously.

Can health and safety consultants use this tool, or does it have to be a business? The health and safety consultants could use this tool if they're costing out a particular intervention, or two or three different intervention types for a client. Yes, by all means, you can use this, as well.

Are there any case studies on using the ROI calculator on health and well-being programs? Currently on the website, the Port of Brisbane actually did cost out the health and well-being programs. They did an onsite gym, as well as looking at getting gym memberships for free for their workers. On the website, when this webinar will be uploaded, there will be two others, including the Port of Brisbane and Rexel Industry Supplies, I think, electrical supplies, sorry. We'll have a little bit more information as to how this information did, how we actually costed it, as well as delving into the actual figures and information that we actually collected from the businesses that was relevant for each business.

Just a follow up question from Aaron. Assume that other field would be best field to include penalty notices or legal costs. Yes, absolutely.

Any tips on calculating intangibles, such as training, from Russell. Will be mostly work hours that are involved. For example, looking at how many employees. For example, 10 people attended the training, as well as, though, you'd have to cost their time and their wages, as well as the trainers themselves, as well as any future training as well, ongoing training, rather, as well.

Will the presentation be made available to people after today? Absolutely. Hopefully we will get the sound to be louder on your computers, if that was an issue for you. Yes, we'll definitely upload this, as well as a couple of the other case study audio PowerPoints, as to how we actually estimated and costed out the return on investment figures for a couple of our case studies on the Work Safe website.

Just to answer Michael's question, so you basically input your data, and the program produces a cost saving outcome in the PDF? Absolutely correct. At the end, there's an ROI of, say, for example, $3 of benefits per dollar of cost, a summary of the total benefits over 10 years, total costs, as well as a summary of cost savings from avoiding incidences occurring in your workplace.

Can we use the ROI calculator as a test? As a test mode to demonstrate to businesses? Yes, you could use it, absolutely. As I said, you don't have to input your information, necessarily, such as your contact details, before you do it. You can flick through and test it out before going in and saving it on your, putting in your contact details.

We'll finish up the webinar today. If you do have any questions, again, please email me at OIRdata@oir.qld.gov.au. Please look out for the recorded presentation of this recorded webinar, as well as the two audio recorded PowerPoints that we will put up at the same time as this webinar as to the exact figures and how we actually costed out the ROI for two of our case studies. Thank you very much.

This presentation will be looking at how the Office of  Industrial Relations' return on investment calculator was used to estimate an  ROI for the Port of Brisbane and their health and safety investment. This  presentation will be most helpful to those who have either had a look at the  ROI calculator and don't know how to complete it, or are curious about how we  arrived at the ROI estimate for the Port of Brisbane.

So the two main points to get out of this today is one, to  understand how we arrived at the ROI results for the Port of Brisbane case  study, which is found on our work site website. And secondly, for you to get an  understanding of the information we gathered and what
factors were considered,  so that you can really tailor an ROI suitable for your business.

So this this is the website where the ROI calculator lives.  It's part of the five e-tools suite which was developed to assist businesses to  better manage work health and safety risks. These are tools to help you manage  risks including heat, noise, and hazardous manual
tasks. Please note that there  is a combination of businesses supplied and estimated figures used in this  presentation.

So the Port of Brisbane Proprietary Limited manages the Port  of Brisbane under a 99 year lease. They had a high number of incidents claims,  which made it a high priority for the business to manage these risks.  Musculoskeletal incidences were addressed with the introduction
of a healthy  lifestyle program which was run by Henry Ford. This included annual checkups  and flu injections with personalized reports to employees, dedicated health and  safety training for supervisors to better identify and mitigate risks and  manage return
to work. Building an onsite gym for convenient access due to the  remote location. Classes run by Fitness First as well as introducing lunchtime  seminars on workplace health and safety topics like healthy eating and dealing  with depression.
So after agreeing to the disclaimer that none of the  information output by this calculator is verified by the Office of Industrial  Relations, and that any data you enter will be kept private and confidential,  you need to enter a few demographic questions. These
questions help us get an  understanding of the type of interventions that businesses are interested in  implementing.

So the Port of Business believed that the suite of controls  they implemented reduced the number of MSD injuries so we click “Yes” for the  question, "Have you experienced any reductions "in injuries  attributable to intervention?" So complete your business
details if you  are interested in working with the Office of Industrial Relations on a  potential case study.

The typical injury here is an MSD related to handling  objects. So when an incident occurs we take into account the time spent of the  injured worker and the person who provides the immediate first aid. And in this  case they spent an hour each so we input two total hours
at an industry average  cost of $35.40 for their wage. Alternatively you could enter the total number  of hours spent, in this case one hour, and add up the total wages of those  involved. The math works out to be the same.
The thing you can't do here is allocate different times for  different people involved in the same task. The injured worker and the  supervisor spent two hours together getting to and from the doctors and the  physiotherapists. And eight other workers were around
the area when the  incident occurred and stopped work for about an hour each. And finally bandages  were used to immobilize the arm and the wrist and up to $10 was used in  replacing first aid supplies.

So onto step two of eight. The Health and Safety Manager  took three hours to initially investigate the injury and manage the situation  plus a further two hours to complete the investigation report as denoted by the  first two categories. So other paperwork for the business
included reports to  the board, incident alerts and so forth which consumed another three hours or  so. And for injuries that escalate to a claim from WorkCover the claims  personnel took two hours to complete insurer paperwork. Furthermore the Health  and Safety
Manager spent four hours doing follow up duties such as meetings,  arranging suitable duties for the worker, and other meetings with the rest of  the company.

And so we're gonna investigation costs subtotal of $524 so  far. So onto calculating damage costs. There was minor material damage that  occurred at the same time as the injury which took up to half an hour to have a  look at. So that was the first category. Two hours were
spent finding spare  equipment and getting it to the necessary location. It took another 30 minutes  to dispose of the damaged material properly, and in total they lost $100 in the  damaged equipment. And approximately one hour to clean up any damaged equipment  so
costs of clean up and salvage.

So the Port of Brisbane estimated 140 hours of time required  in hiring, relocating, and rescheduling another worker to complete the work of  the injured worker. So on average they said that the average time off for a  serious musculoskeletal disorder claim was 140 hours
in the Port of Brisbane.

So for the last step of calculating the indirect cost of an  injury. There were four workers affected for up to an hour when the worker  pulled their shoulder, so we put that information as work disruption. And the  Health and Safety Manager spent three hours managing the
injury, calling the  injured worker, and coordinating the general return to work processes. The  worker then takes three hours when they come back to work over a week to get  back up to speed with their job tasks and the handover from the relocated, or the  rescheduled
worker from before.

So the major upfront costs for the Port of Brisbane was  $120,000 on gym equipment and building the onsite gym. So normally you would  enter the information on the time you spent consulting and researching options  to manage the hazards and risks however there was no such
estimation provided  by the business regarding the time spent doing so. The major ongoing costs for  the Port of Brisbane was the annual fees they paid for the healthy lifestyle  program of $115,000, and $15,000 to Fitness First for the ongoing gym classes.

So the Port of Brisbane did experience productivity gains  however could not accurately determine this in work hours saved at the time of  this evaluation. However they experienced a reduction of 26 injuries which were  not necessarily claims per year due to their health
and wellbeing program. And  a workers' compensation savings of $50,000 per year. Giving us a subtotal of  $50,000 of benefits of the health and safety intervention. So finally we come  to the output, or results page, showing us that the Port of Brisbane's health  and
wellbeing program gave them an ROI of $1.58 of benefits for every dollar  that they spent on their intervention. And they also had a payback period of  approximately one year and four months.

At the end there this calculator also gives a nice little  summary of the cost of your workplace incident. So if you have any questions  regarding the Port of Brisbane case study that we just presented, or about the  return on investment calculator itself, or you wanna
get involved with what the  Office of Industrial Relations is doing in this particular space please contact  us at OIRdata@oir.qld.gov.au.

RUN TIME: 7 mins 20 sec

This presentation will be looking at how the Office of Industrial Relations, or OIR, their return on investment calculator, was used to estimate an ROI for Rexel Electrical Supplies. So this is a case study which is found on our Worksafe website and the case study is looking at their health and safety investment.

And so the two main points to get out of this today is to understand how we arrived at the ROI results for the Rexel case study as found on our Worksafe website. And also for you to get an understanding of the information we gathered and what factors were considered so that you can tailor an ROI that's actually suitable for your own business.

This is just a screenshot of the website where the ROI calculator lives. And as you can see, it's a part of the five eTools suite of tools which was developed to assist businesses to better manage work health and safety risks and hazards. There are tools to help you manage risks including heat, noise, and hazardous manual tasks. Please note that there is a combination of business supplied and estimated figures in this presentation.

So a little bit about Rexel. Rexel supplies electricals products for retail and commercial purposes. They have a distribution warehouse all across Australia and the five years prior to performing this evaluation they had consistent musculoskeletal disorder claims. One of the tasks which they identified as contributing to these injuries were the manual handling of the shrink wrapper to wrap and secure pallets of goods. Upon research and consultation with workers, Rexel decided to purchase two automatic shrink wrapping machines to replace the handheld wrappers.

So when we click into the ROI calculator website, and accept the disclaimer stating that any information entered into the calculator will be kept private and confidential and also will also be de-identified unless otherwise specified, we arrive at the preliminaries stage. So you can use this tool to either one, calculate your ROI for a control you have already implemented, or two, predict an ROI estimate for a control you wish to implement and want to justify the costs for.

And so here we enter a description of the intervention Rexel has implemented, an automatic shrink wrapping machine. The next question asks whether we've experienced any injury reductions due to implementing the control. And in this case, we performed this evaluation retrospectively and found that the automatic machine has reduced the number of claims.

And if you were to do this as a prediction or estimation exercise, you would select no or unsure. And so next we select the industry that Rexel operates in, and enter 20 as the number of employees their business has. And so it's only 20 because this is a small to medium size warehouse. And this is a relevant number of workers the workplace that's actually impacted by implementing this control.

After the preliminaries page, we come to step one of eight, which looks like costs associated with a typical incident in your workplace. This could be strains and sprains, falls from work at heights or lacerations. It's really completely dependent on the type of injuries you have prevented as a result of the control, of the type of injuries or illnesses you are hoping to prevent for the intervention you are evaluating. The typical injury in this case was a back strain, and the time to provide first aid was only 15 minutes.

However, since both the worker and the health and safety manager were involved, we double the time required, so 0.5 hours, or 30 minutes and average their wages of $40. Alternatively, we could enter 15 minutes in the time spent and add the wages together for labor costs. The mathematics is the same. It takes about an hour for, to get to their local GP and for the initial assessment where both injured worker and the health and safety manager attend. So, as you can see here, when you enter information, the total sub-costs for each sub-category is automatically calculated and displayed as you enter your information.

So, productivity is also effected as workers stop work when the incident occurred. And so, the workers were worried for their colleague, which is completely understandable. So the time stoppage is about 15 minutes, or about a quarter of an hour, as only one other worker was around during this incident. So, the time to make the area safe would be more applicable for an injury such as lacerations or slips and so forth where the work environment would be compromised, or may have been less safe due to the injury. In this case, no first aid supplies were used and the worker was transported by a company vehicle and so no information for Rexel was entered in this case.

So moving onto step two, we look at costs associated with investigating an incident. In this case, the health and safety manager only needed half an hour to perform the initial investigation of the cause of back strain, so we enter 0.5 hours into the time spent and an average wage for the health and safety manager. You also use 1.5 hours to write up the incident report and wasn't really required to do much else paperwork in relation to this particular incident outside.

So, step three of eight guides you through the costs associated with any damages incurred as a result of the incident. However, in this case, the back strain didn't cause any damage to the equipment goods, so some of the key factors to note include time required to assess damage, replace equipment, including research or consultation and any stoppage if repairs halt work and salvage costs as well, if this is actually applicable to your own case. This step also isn't that relevant to Rexel, as I didn't have a need to bring someone over from another work site, or call for labor hire to take over lost work by the injured worker. And so the things to note here, if you include any of these factors, is ensuring you include all recruitment and training time and staff involved in this process.

So, the final step of figuring out the avoided cost of injuries, or rather the hidden costs, is determining the lost productivity attributed to the incident occurring in your workplace. And so, when the worker pulled their shoulder, one other person was around and took half an hour to help them out. The health and safety manager spent about an hour communicating with the worker to manage their claim. And so you can include this in step two of the injury investigation cost if you like.

It's quite flexible and really up to you, but we've included it here in this case. And so there were no other costs, as the worker was put on suitable duties upon return to work and the return to work process was quite efficient. So here we come to the upfront cost of the health and safety intervention.

So, Rexel spent $15,000 on two automatic shrink wrapping machines and it took them a couple of hours to install it. So we can put in two hours in time spent and $15,000 for the two machines and the other costs. They spent about 10 hours consulting with workers and researching options for how to manage the hazardous manual tasks risks in their workplace regarding the manual shrink wrapper. And it didn't take very long to train workers how to use this machine and the machine will easily last 10 years if not more, so. So, here we kept the intervention lifecycle as 10 years.

And so maintenance for Rexel is actually quite easy. They estimated themselves that once a year they would spend approximately $100 over the 10 years of the lifecycle for their automatic shrink wrapper machine. So, in regards to the benefits for the health and safety intervention, Rexel timed how long the task took before the automatic wrappers and after installing the automatic shrink wrapper machines and found that there was a four minute saving each time it performed the task. And so we multiply that by 2,300 pallets that they process in the year and it gives us a total of approximately 9,200 minutes, which equates to about 153 hours in the year.

So Rexel expects that the complete elimination of hazardous manual task risks by purchasing the automatic shrink wrapping machine will prevent approximately two injuries per year from happening and so we include that here in this question here. And so for them, there was no real workers compensation savings at that particular time.

They do still, obviously, they still do experience hazardous manual task injuries and so this savings here will steadily decrease, but however, they didn't see any worker's comp savings in quite at this particular time. And this brings us to the final outcomes page, or the results page. And so with the total cost of just over $16,000, estimated benefits of over $59,000, giving us an ROI indication of $3.61 of benefits per $1 of cost over 10 years. And please note that this figure is different to the case study online as the benefits were calculated over five year basis.

And so Rexel would expect that they would recover their costs of implementing the automatic shrink wrapper machines in approximately three years as you see here in the payback period. So this comes to the end of the presentation. As I mentioned, if you do have any questions regarding how we came to some of these figures, some of the processes that we went through to collect this information, or just want to ask a few questions about the ROI calculator, please e-mail us at OIRdata@oir.qld.gov.au. Thank you.