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May 25, 2016

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Shifting the conversation : Moving away from ROI to aligning safety with business strategy

Many health and safety professionals would be familiar with being asked to demonstrate the return on investment of a particular health and safety initiative. Professional company director and international health and safety expert Dr Kirstin Ferguson discusses why that is often difficult to do and suggests some alternative approaches.

As every health and safety professional knows all too well, demonstrating the business value of investments made in safety can be incredibly challenging. That is because the value of investing in health and safety within an organisation lies in the fatality that does not happen, perhaps because hazard reporting was timely and effective. The value of investing time, people and financial resources in health and safety can also be seen in the crushed finger that does not occur because the PPE provided by the company was fit for purpose. And the value of health and safety lies in the manager who does not need to take stress leave, perhaps because the resilience training being offered develops the coping skills the role requires. Ultimately, the challenge for health and safety professionals is that the business value of every investment in safety (financial or otherwise) lies more in what does not happen rather than what does.

Yet successfully engaging senior executives and boards in safety requires the health and safety profession to be able to demonstrate how the various safety strategic initiatives being invested in, new equipment being purchased, or safety training being provided will provide a return on such an investment and positively influence safety outcomes. And while the drive to achieve zero incidents may be viewed as the ultimate ‘return on investment’, focusing purely on lag indicators understates the true value that effective safety measures contribute to the value of businesses. Safety outcomes therefore need to be defined in accordance with the strategic and operational objectives of the organisation to be meaningful to boards, executives and investors.

A key issue for health and safety professionals to tackle is to ensure that the strategic safety goals of the organisation are included within the wider business strategy. Once safety is considered as a strategic imperative, it is clear that reducing the investment to a line item is not possible. Investments in health and safety not only keep people safe every day but may also ensure an ongoing social licence to operate for the business, enhance relationships with key stakeholders, as well as maintain and gain existing contracts. Where health and safety is not integrated into the wider strategic approach of the business, and where the health and safety function are left isolated from business units while expected to demonstrate the cost benefit analysis of each new safety initiative, the challenge will remain.

kirstin fergusson

Dr Kirstin Ferguson is a professional company director on public, private and government boards; and an international expert in safety governance and safety leadership for boards and senior executives. Dr Ferguson can be reached via , you can follow her on Twitter (@kirstinferguson) or connect on Linked In.


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