MODULE 1: MANAGEMENT COMMITMENT

Financial tools that "sell" your recommendation

Your supervisor may ask you what the Return on Investment, (ROI), will be. If the investment to correct a hazard is $1,000, and it's likely the potential direct and indirect accident costs to the company may total $28,000 sometime in the foreseeable future, (let's say five years), you can find the ROI by dividing the $28,000 by $1,000 to get 28.

Now multiply that result by 100 to arrive at 2,800 percent.

Next, divide that total by 5 years to determine an annual ROI of over 500 percent!

Whoah! Now that's a return!

Management may want to know how quickly the investment will be paid back: what the Payback Period is. Just divide $28,000 by 60 months and you come up with $467 per month in potential accident costs. Since the investment is $1,000, it will be paid back in a little over two months.

After that, the corrective action is actually saving the company some big money.

Now that's talking the bottom line!