John Nolan Many organizations that implement ISO 45001:2018 do so because it is expected in the sector it operates in, or because top management recognize it is an excellent way to establish, safeguard, and encourage employee well-being. In our previous article: How much does the ISO 45001 implementation cost? we examined the cost perspective of implementation, but often the profitability angle can be overlooked, especially by top management teams who are primarily interested in the cost of projects and perhaps less willing or able to see potential benefits. So, how can you ensure and prove to top management your ISO 45001 implementation is profitable for your organization?
The financial benefits of ISO 45001
In our previous article, 4 key benefits of ISO 45001 for your business, we examined the overall benefits, but what specific financial benefits can be derived? Let us consider:
- Employee well-being and the link to productivity: It is generally acknowledged and accepted that employee well-being improves when companies establish an OHSMS (Operational Health and Safety Management System) and get certified to the standard. Employees who are consulted, involved, and communicated with have a greater sense of well-being and are very likely to be more conscientious and productive. Almost all modern companies will measure productivity and output in both unit and financial terms, so this measure should be relatively easy for your financial team to compare with the same before your implementation.
- Increased process efficiency: Part of ISO 45001 means that better and safer ways to complete tasks will be discovered – normally while hazards and risks are discovered, and then mitigated or removed. Process improvement normally equates to higher productivity, which in turn means higher output per person. You should also find that some tasks require fewer resources, with the subsequent savings. This fiscal measurement can be tied in with the measurement in the section above.
- Employee loyalty: Satisfied employees who feel valued are obviously less likely to leave than those who don’t. Estimations of the cost of training new employees can vary, but it is generally accepted that this cost equals something between the equivalent of 6 to 9 months’ salary to train a new staff member, and this can obviously increase in certain sectors where specialized training and skills are required. With such costs being so significant, especially to small companies with a limited turnover, there is a huge financial benefit to be had by good staff retention. Once again, your finance department should be able to calculate staff turnover rates and associated costs before and after ISO 45001 implementation to help you measure this.
- Number of sick days: A simple, yet effective measure. You can measure your average number of sick days against your national or regional average, and again, you can compare like for like with your own organization before and after your ISO 45001 implementation to enable you to ascertain the number that your organization saves.
- Customer loyalty due to your reputation: ISO 45001 will enhance a company’s reputation, as will certification to most recognized standards. The financial benefit of ISO 45001 certification can be difficult to measure in this context, and can depend on the sector you operate in. It is, however, somewhat easier to measure the types of contracts, tenders, and repeat business that your organization could not have qualified for without ISO 45001 certification, and you can appropriate a financial measure against this also. Look at your current order book or contract list, and gauge what contracts you would retain without ISO 45001, and this will give you a valuable pointer.
- Removal of delays and accident investigation time: Improved OH&S performance will reduce accidents, investigation time, and the ensuing delays to your production department. This all signifies tangible financial benefit to your organization over the course of a business year.
ISO 45001 – Making the sums add up for your organization
As you can see, ISO 45001 can be a profitable long-term investment for any organization, especially those in sectors with abnormally high levels of risk or production methods that may be highly specialized and resource heavy. While many top managers see ISO 45001 as purely a cost to the business to meet compliance expectations, with little or no financial return – in fact, nothing could be further from the truth. Perhaps this angle can be the one you take when you present an ISO 45001 project proposition to the top management team; focus on the financial benefits, which can be far greater than the short-term cost. Whatever way you approach it, ISO 45001 implementation makes financial sense for almost all businesses – surely it will for yours, too.
Use this free Project Proposal for ISO 45001 implementation template to achieve all of your business objectives.
