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ROI vs ROS

February 16, 2015

One of the main purposes of an organization is to make a profit.  The organization benefits and employees benefit as well.  The question is this, is your company too concerned with return on investment?  Will they ignore safety and put employees at risk in order to earn that short term profit?  Is your company ROI (return on investment) focused or ROS (return on safety) focused?

Tom Wojick wrote an article about the dangers of an ROI focused company.  Safety can be compromised by employees and management when manufacturing goals and profits are emphasized as the most important ideal.  The article mentions three separate incidents in which 71 people lost their lives.  These three horrible accidents ended up costing over $50 billion combined.  Could the loss of life have been avoided if the companies would have focused more on ROS? It’s possible.

Profit is important, can profit be made by focusing on return on safety instead of return on investment?  The article says “Yes.”  It gives Alcoa, a metal distributor, as an example.  From 1987-2000 Paul O’Neill was the CEO of Alcoa.  He understood ROS and made it the focus of his business strategy.  During the 13 years of his leadership, company safety and manufacturing processes were examined and changed.  Worker safety was stressed and their lost work days due to injury decreased from 1.86 per 100 workers to .20.  When O’Neill retired the company’s annual net income was five times higher than when he started.  He knew how to balance ROS and ROI.

Woljick gives a helpful list for any company to help decipher if they place more emphasis on ROI than on ROS.  ROI emphasis warning signs:

  • Safety is rarely discussed by CEO’s and management at meetings.
  • Safety is not emphasized in training and development.
  • Employees are afraid that if they report risks, hazards and safety incidents they will be subject to negative consequences.
  • There is no, or little at best emphasis placed on safety in evaluating individuals or teams.
  • Safety initiatives and consistent safety measures are not always emphasized by managers.
  • The person who is responsible for safety does not directly report to the CEO.
  • The business strategy does not relate directly to the company’s safety vision.
  • Safety vision and values are not seen as being taken seriously by management, employees are skeptical of their seriousness.
  • The safety vision and values are not first introduced to new employees and contractors.
  • Feedback is rarely, if at all, used as a tool for continuous safety improvement.

This was an interesting article that showed how important as well as profitable placing an emphasis on safety can be within a company.  SlipNOT® slip resistant metal flooring products help place importance on preventing slip and fall injuries.  The non grit steel, aluminum and stainless steel products have been proven to last for decades and can transform slippery work environments into safe and productive areas.

Wojick, Tom. “ROI: A Hazard to Employee Safety?” www.ehstoday.com February 9, 2015.  February 10, 2015.

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