10. 13.71% x $453,000 x 1.0 = $62,106
"Selling" Safety
*Cost of Safety (Worker’s Comp)
Example #1- Average EMR
NCCI Class 7229 (Trucking-Long Haul)
7229 Manual Rate $13.71 per $100 of payroll (13.71%)
Company Payroll $453,000 annual payroll
Experience Modification Rate 1.0
11. 13.71% x $453,000 x 0.73 = $45,337
"Selling" Safety
*Cost of Safety (Worker’s Comp)
Example #2- Better than Average EMR
NCCI Class 7229 (Trucking-Long Haul)
7229 Manual Rate $13.71 per $100 of payroll (13.71%)
Company Payroll $453,000 annual payroll
Experience Modification Rate 0.73
Discount of $16,769!
12. 13.71% x $453,000 x 1.43 = $88,812
"Selling" Safety
*Cost of Safety (Worker’s Comp)
Example #3- Worse than Average EMR
NCCI Class 7229 (Trucking-Long Haul)
7229 Manual Rate $13.71 per $100 of payroll (13.71%)
Company Payroll $453,000 annual payroll
Experience Modification Rate 1.43
Surcharge of $26,706!
13. "Selling" Safety
*Cost of Safety (OSHA)
VIOLATION TYPE PENALTY
WILLFUL
A violation that the employer intentionally and knowingly
commits or a violation that the employer commits with
plain indifference to the law.
OSHA may propose penalties of up
to $124,709 for each willful
violation, with a minimum penalty of
$5,000 for each willful violation.
SERIOUS
A violation where there is substantial probability that
death or serious physical harm could result and that the
employer knew, or should have known, of the hazard.
There is a mandatory penalty for
serious violations which may be up
to $12,471.
OTHER-THAN-SERIOUS
A violation that has a direct relationship to safety and
health, but probably would not cause death or serious
physical harm.
OSHA may propose a penalty of up
to $12,471 for each other-than-
serious violation.
REPEATED
A violation that is the same or similar to a previous
violation.
OSHA may propose penalties of up
to $124,709 for each repeated
violation.
14. "Selling" Safety
*Cost of Safety (OSHA)
Severe Violators Enforcement Program
CPL 02-00-149
Willful, Repeat, Failure to Abate, “Egregious”
15. "Selling" Safety
*Cost of Safety (OSHA)
Severe Violators Enforcement Program
“Enhanced” Follow Up Inspections
Nationwide Inspections of Related Worksites
Increased Company Awareness of
OSHA Enforcement
“Enhanced” Settlement Procedures
Federal Court Enforcement
16. Brand Impact / Client Relations
Contractor Qualification
Additional Requirements
Loss of Business Revenue
"Selling" Safety
*Cost of Safety
17. Employee Retention / Morale
Cost of Hires
Lost Productivity
OSHA Complaints
Future Incidents
"Selling" Safety
*Cost of Safety
19. Process Mapping
Visual Display of Flow
Identifies Current
Sequence
Allows for Analysis /
Comparison
"Selling" Safety
*Process Mapping
20. Process Mapping Guidelines
Start from high level
Move into Subtasks
Involve stakeholders
“Walk” the process
Keep it simple / Validate
"Selling" Safety
*Process Mapping
21.
22.
23. Time Study Analysis
Break down into parts (process
mapping)
Time each part
Identifies Inefficiencies /
Improvement Opportunities
"Selling" Safety
*Time Study Analysis
24. Time Study Analysis- Example
New tool for training assignments.
Simplified process (time)
Lowered chance of failure (rework)
"Selling" Safety
*Time Study Analysis
29. "Selling" Safety
*Time Study Analysis
Example – New Training Tool
Task Time (Before Improvements) 24 Minutes
Task Time (After Improvements) 18 Minutes
# of Times Performed Per Year 500
Cost Per Hour ($) $50
Calculating Time Savings
(24-18) / 60 * 500 * $50= $2,500
30. "Selling" Safety
*Time Study Analysis
Example – New Training Tool
Flow Time (Before Improvements) 22 Hours
Flow Time (After Improvements) 20.4 Hours
# of Times Performed Per Year 500
Calculating Time Savings
(22-20.4) * 500 = 800 Hours
32. Return on Investment (ROI)
“Value” of the Project/Purchase
As a %
As a “Payback Period”
"Selling" Safety
*Calculating ROI
33. Return on Investment (ROI)- Example
Proposal to install permanent guard rail
system to protect workers from fall potential.
Lifespan of the guard rail system is 10 years.
Employees currently required to wear fall
protection.
"Selling" Safety
*Calculating ROI
34. Calculating Total Costs
"Selling" Safety
*Calculating ROI
Example – Installation of New Guardrail System
Initial Cost of Guardrails $10,000
Ongoing Maintenance of Guardrails (paint,
welds, etc.)
$1,000*
Periodic Inspection Costs $1,000*
Total Cost of System $12,000
*Total expected costs across 10 year life span of system.
35. Calculating Total Savings
"Selling" Safety
*Calculating ROI
Example – Installation of New Guardrail System
Annual Harness / Lanyard Purchase Savings $500/year x 10 years =
$5,000
Reduction in Harness/Lanyard Inspections $300/year x 10 years =
$3,000
Employee Efficiency Gains (no longer have to
“suit up”)
$700/year x 10 years =
$7,000
Training Savings (no longer have to perform
Fall Protection training)
$400/year x 10 years =
$4,000
Total Savings of the System $19,000*
*Total expected savings across 10 year life span of system.
36. Calculating ROI as a Percentage
"Selling" Safety
*Calculating ROI
Example – Installation of New Guardrail System
Total Cost of the System $12,000
Total Savings of the System $19,000
ROI as a Percentage
Formula
(Total Savings – Total Investment) /
Total Investment
($19,000 - $12,000) / $12,000 = .58 or 58%
37. Calculating ROI as a Payback Period
"Selling" Safety
*Calculating ROI
Example – Installation of New Guardrail System
Total Cost of the System $12,000
Total Savings of the System $19,000
Total Periods (Lifespan) 10 Years
Savings per Period $19,000 / 10 Years = $1,900 per year
ROI as a Percentage Formula Initial Investment / Cash Inflow per Period
$12,000 / $1,900 = 6.3 years
