Are exercise/stretching programs the best way to reduce injury: Part 2
In my previous blog I cited an article in the Star Tribune that was about a auto parts company that has their workers performing Pilates as a way to prevent injuries and reduce workers’ compensation costs. Two questions came to mind when I read that article. The first question “Is an exercise class the best way to lower workers’ compensation costs?” and second, “What is the cost/benefit of having such a program?” I answered the first question in my previous blog so now let’s look at the cost/benefit of an exercise program, in other words what is the return on investment (ROI).
First let’s briefly define ROI. Simply stated ROI is the “return” (incremental gain) from an action divided by the cost of that action. ROI is typically expressed as a ratio or percentage investment returns and costs. A ROI ratio greater than 0% means the investment returns more than its costs. A high ROI means that investment gains compare quite favorably to investment costs. When projects and programs compete for funds the one with the higher ROI is considered the better business decision.
Simple ROI is can be expressed in the following way:
ROI = Gains (Benefits) – Investment Costs/ Investment Costs
Where gains are specific returns (benefits) due to the investment (increased profits, decreased incurred costs, etc.) and investment costs are those costs due to the project, equipment purchases, etc. In this case the gains would be decreased workers’ compensation costs. The costs would be that of the Pilates instructor/session and the wages paid to each employee during each session. When taking a look at the actual cost, management may have bought a bill of goods that is significantly more expensive than imagined and much less effective for controlling work-related injuries than expected.
Example 1: An exercise program of 5 minutes each day at the beginning of the shift.
- 5 minute program = (3 min stretch + 2 min prep/finish)
- 5 minutes represents approximately 1% of base payroll
- 5 minutes/480 minutes in workday = 1.04% of workday for one session
If employee makes $10/hour and is paid for 2,080 hours plus 30% for benefits, then the cost for this one employee for one daily session is:
Cost = [($10/hour x 2,080 hours) +(0.3)($10/hour x 2,080 hours)] x 1.04%
= $281.22 each year per employee
Add on 30 minutes of orientation at 0.5 hour x $10 = $5.00 per employee
If you have 100 employees, then your annual cost is:
100 employees x ($281.22 + $5.00) = $28,621.60 for a single session each day. If the session is performed twice per day the cost for 100 employees is $56,743.60 [100 x ($281.22 + $281.22 + $5.00)]
Return on investment (ROI) for a daily 5 minute exercise program assuming a 10% probability of success:
ROI = (reduced workers’ comp cost x probability of success)- direct cost/direct cost=($100,000 x 10%)-$28,621.60/$28,621.60= -0.65. A negative ROI is obtained at a 10% probability of success.
The ROI improves significantly ff one assumes a more positive percentage of success. Assuming a 50% probability of success the ROI becomes = 0.75 which means it’ll pay for itself in approximately 16 months.
Obviously, the ROI is greatly affected by the total time devoted to an exercise program and the assumed success rate of the program. Does the ROI make good business sense? This question can only be answered by the company. For companies who want to incorporate exercises into their employees work day a better option might be to encourage employees to incorporate the exercises as micro-breaks which are performed spontaneously throughout the day so it becomes a habit and part of how they work. It is recommended that the exercises should be changed occasionally in order to prevent boredom.
Whatever exercise program is chosen it is critical that managers and supervisors are committed to the program. They should not only encourage their employees to perform the exercises, they themselves should participate and do the exercises as well. The cliché’ fits-Managers and supervisors need to “Walk the Walk” and not just talk.
Conclusion
While exercising/stretching alone does not appear to be the most effective method for minimizing work-related injuries, it does take a step in the right direction to increase awareness concerning the benefits of movement and posture. Even the most advanced use of equipment and design possible in new facilities requires human interface and vigilance. Adding a warm-up and exercise as part of an overall safety and leadership program can stimulate blood flow and movement when the job calls for static postures, it can activate overstretched and tired muscles to reduce fatigue and improve postural awareness, and it can go a long way to support company loyalty. And loyalty can be priceless!