What Is The ROI of Safety Management Software?

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.

Cost of workplace Accidents

Cost of project delays and overrun

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:

• WHS Injuries/Incidents leading to site shutdown as WorkSafe investigates 
• Non-conformance
• Inefficient use of worker's time:
  • Slow and non-digitised induction processes
  • Accessibility of WHS policies, procedures and documentation such as SWMS, SDS, JSA's, etc.
  • Accessibility of worker documentation, licences and records
  • Access to data
• Failure to Meet compliance and legislation requirements

Loss of Reputation

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:

• Workplace incidents and fatalities
• Inefficient induction processes for employees and contractors
• Compliance and legislation audit failures

• Future Work - Struggle-winning work - most high-volume work is tender based
• Margins - Margins decreased/less competitive
• COGS - Cost of goods and labour increased
• Talent - Talent retention/future recruitment struggles

Rise in Insurance Premiums

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.

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.

Direct ROI

Immediate return of reducing risk, automating processes and minimising resources.

The most important financial impact HSEQ software makes is automating manual and inefficient business processes.

Automating data entry, inductions, registrations, training, document scanning and reporting.

Indirect ROI

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.) 

Reputation:

Resources/processes:

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.

Hidden Implementation Costs

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. 

Hidden Additional Costs

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: