Human Factors and Ergonomics Initiatives Provide a Good ROI

The importance of the strategic use of capital cannot be overstated during an economic downturn. In lean times, companies are faced with tough decisions regarding what to cut and keep in an effort to remain competitive – or even solvent. Wasted money (and time) can mean the difference between continuing to operate and having to close the doors forever. Thus, decision makers must be assured that their use of limited resources will result in endeavors that will increase customer value and/or employee safety, productivity and satisfaction.

In the business world, the benefits of a given initiative are often judged by their return on investment (ROI) – the ratio of the profit gained or lost relative to the cost of achieving the profit. There are three categories of return on investment (ROI):

• Internal ROI refers to benefits that save the organization money when developing products or services. This can take the form of decreased development costs, preventing the need for redesign, and reduced time in getting the product to market.
• External ROI refers to benefits that increase the profitability of products or services by making them better for the customer. This can take the form of increased sales, increased market share, decreased customer support and service costs, decreased return rate, and improved user experience. It should be noted that Internal ROI typically must be demonstrated before External ROI can be realized.
• Social ROI refers to the perception that human factors & ergonomics initiatives are beneficial and can affect both Internal and External ROI. Internal Social ROI includes the perception of stakeholders that a given initiative provides a benefit, which in turn, increases management “buy in.” External Social ROI consists of customer’s positive perceptions of the organization due to past satisfactory experiences and demonstrated trustworthiness, which leads to improved branding and strengthened corporate image.

A common way to determine the benefit of a given human factors and ergonomics initiative is by performing a cost-benefit analysis. The results of a cost-benefit analysis can guide where an organization can best invest their financial resources, thus maximizing their return on investment (ROI).

There is a growing body of literature that demonstrates a positive return on investment (ROI) for implementing human factors and ergonomics initiatives. Case studies have demonstrated the benefits for many technologies, processes, and industries, including:

• Websites
• Software
• Computers
• Intranets
• Electronics
• Office ergonomics
• Workplace ergonomics / manual material handling
• Industrial production lines
• Forestry
• Automotive
• Aircraft
• Petroleum
• Healthcare
• Nuclear and electrical power plants

Specific benefits for human factors and ergonomics initiatives include:

• Assembly job redesign – 10.76% first year ROI & 30.10% subsequent year ROI
• Workstation redesign – 15% increase in productivity
• Robotic case palletizer – 17% ROI over a 10 year period
• Log truck redesign – $6900 investment & $65,000 return = 1:9.4 first year cost-benefit ratio
• Electric utility tool replacement – $300,000 capital investment paid back in 4 months
• Motherboard redesign – $581,495/year factory savings & $142,105/year customer savings
• Computer usability – 200% – 500% return on a 6% budget investment

Implementing human factors and ergonomics initiatives benefits both customer and businesses. They have been shown to decrease development costs, minimize redesign, reduce time to market, increase sales and market share, decrease customer support and service costs, and improve user experience. Specifically, the potential benefits of human factors and ergonomic initiatives to customers, employees, and companies include:

• Increased
  • Safety and health
  • Productivity
  • Reliability and quality
  • Comfort
  • Satisfaction
  • Ease of learning and use
  • Loyalty
• Decreased
  • Accidents, injuries and illnesses
  • Fatigue and physical stress
  • Absenteeism and turnover
  • Training needs
  • Liability issues
  • Maintenance costs
  • Time-to-market

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