Tuesday, 19 June 2012

The Economics of Ergonomics

I came across this interesting article from an Ergoport newsletter.. It's great to see some actual figures outlined in how ergonomic assessments and devices can actually SAVE money per employee! 

We all know the benefits of suitable ergonomic equipment and furniture although can we actually put a price on it? Scenarios vary from case-to-case with psycho-social, physiological and environmental factors.  The cost estimation hypothesis below may help determine a return on investment at a rudimentary level.  Human Resource hourly employment rate savings are the prime source of measurable productivity gains within an organisation (Time = Money).  An example of time/cost savings is generated by utilising ergonomic devices (keyboard, mouse & laptop stand) where an Ergonomic deficiency was recognised.  An example of a common Ergonomic deficiency would be a worker performing work on a laptop computer without an external keyboard, mouse and appropriate stand: (keyboard, mouse & laptop stand cost: $300)

Savings Calculations:
  • Average life of Ergonomic Intervention items (combined) = 5 years
  • Value added employee performance savings per day = 5 minutes (1% of time worked per day)
  • Intervention set; usage per day, per employee = 7.0 hours
  • Average hourly rate per employee = $42 (includes 20% incremental costs)
  • Productivity savings per employee per day =  Productivity rate (5 minutes / 7.0 hrs) =  0.0119 %
     0.119 $42 x 7.0 hrs. = $3.50
  • Number of days to recoup cost of interventions = $300 / $3.50 = 85.7 days
  • Number of years to recoup cost of interventions = 85.7 days / 300 = 0.29
  • (ROI of 0.29 yrs. assumes 200 work days per employee year)
  • Value added time = 5 years – 0.29 years = 4.71 years
  • Cost savings = 4.71 years x 200 work days/ year = 942 days
  • 942 work days x $3.50 = $3297
This ergonomic intervention set would save $3297 per employee after initial cost
Additional cost savings/ can be attributed to increased employee output, fewer errors due to reduced fatigue/ discomfort, lower costs for medical, workers compensation, lost time, restricted work days, and various other supervisory /indirect costs.

‘Article courtesy of Ergoport Pty Ltd’.

Contact Get Ergonised to find out how we can save you money in your business! 

1300 820 877