$61.8 million per year
120,355 serious claims
$13,200.00 on average per claim
On average, 6.6 weeks is lost per injured worker
Safety Management Software or HSEQ software has become a necessary investment for any business in a high-risk industry, managing multiple contractors/onsite and remote workers and requiring a management system for compliance.
While traditional Health & Safety processes have previously been managed via pen and paper/spreadsheets and non-HSEQ specific software, there has been a significant shift over the last few years towards HSEQ software as businesses across the world look to simplify, automate and draw insights from their WHS processes.
As a result, businesses are starting to understand and unpack the true value of HSEQ software beyond a simple ROI calculation.
This document is created specifically for CFOs, Company Accountants and Senior Accounting/Financial Managers to showcase how implementing a HSEQ solution goes beyond a simple ROI calculation.
Before calculating the ROI from implementing a safety management software solution, it’s important to understand the TRUE cost of an unsafe workplace.
In high-risk industries such as Mining, Construction or Manufacturing, a project delay can be caused by an unwanted event such as a WHS incident, non-conformance or breach of compliance can be extremely costly.
As a result, project delays and overruns can mean a business will lose out on some profits. With an unsafe and inefficient workplace, the following are examples of HSEQ-related project delays:
Example cost of project delays:
$2.5 million project completed over 1 year (280 days working days in a year)
= $50,000/week in project delays
Reputational damage is one of those grey areas of business that is not easily quantifiable until it starts to truly affect the bottom line.
Reputational management is a larger element of overall business strategy but plays a significant role in winning and retaining client work.
An unsafe workplace that does not value a safety culture can have a direct impact not only its current employees but also attracting new ones. This is also true for attracting clients and working with partners. No one wants to work with or for a company that has a reputation for unsafe work practices.
WHS causes of reputational damage:
No one wants a recorded workplace incident or fatality. And to make matters worse, the aftermath of this unwanted event can have an extra hidden financial burden on your business. A rise in insurance premium
Regardless of the level of risk, every business must have certain insurance. For example, in Australia, your business should have Workers’ Compensation Insurance and Public Liability Insurance.
Quite simply, an employer’s WorkCover premium is calculated according to their employee's occupation type and the employer’s claim history.
How does a workplace claim affect your insurance premium?
After a workplace claim, regardless of negligence on employer or employee's behalf, you face the reality of insurance premiums increasing year on year.
Some Insurance agencies will offer discounts if you take a proactive approach to minimising risks and have a good track record with no claims.
Measuring the return on investment (ROI) from any software implementation can be challenging.
HSEQ software provides immediate benefits, such as automating previously manual processes but also has significant indirect returns.
The average HSEQ Manager’s Salary is $100,000+
Save 2 hours p/d
=$673.07 per week
$34,999.64 saved per year
Average subcontractor salary = $37.68 p/h
Save 3 hour p/w
= $133.04 p/w
X 25 contractors
= $2,826.00 saved per week
Indirect ROI is a form of return that is not easily calculated. It's hard to put a monetary value on Indirect ROI as it varies per business and could be a long-term ROI.
Indirect returns from minimising all areas set out in the previous section (project delays, reputational damage, etc.)
One of the most crucial elements to getting a positive ROI from software is ensuring that you choose the right solution. Unfortunately, there are hidden costs associated with choosing the wrong software provider.
These can be hidden implementation costs that were not disclosed upon discovery or additional costs to bottom line performance.
Unfortunately, not all software vendors are transparent with their pricing. As a result, they might accidentally leave out valuable information that is required to get the solution up to scratch.
Here's how Lucidity provides a transparent sales process compared to how others manage their pricing.
|Lucidity||Other HSEQ Software|
|Additional costs outside of subscription/licencing|
Add ons are disclosed in proposal
Sometimes hidden in after-sales pricing, such as integrations
Added as an additional line item to every Lucidity implementation
Sometimes overlooked via “off-the-shelf” software
Upgrades are a part of every Lucidity instance
Some providers charge additional fees for upgrading versions
|Usage and Users||
Lucidity charges annually and does not charge usage
Usage and Users grow quickly making monthly budgeting challenging
With any investment for a business, there is a chance that there will be indirect associated costs. Software is no different. However, if you choose the right provider with a proven track record of long-term clients, implementation and change management, you start to minimise these risks: