Calculating the cost of a life
Tuesday, March 17, 2015 by Rhonda Locke
In my capacity as the General Manager of Marketing, among other responsibilities, I am in charge of the packaging and promotion of Optalert’s products and services. Since joining the company almost two years ago, the one question regularly being asked about our product has been “what is the expected Return on Investment (ROI)?”, and now our response is quantifiable.
In many industries, ROI can become a pretty quick calculation. If you spend $300k per year outsourcing accountancy services, and you choose to bring that function in house, you can easily see the savings by calculating your new accountant’s salary and on costs and deducting that from your previous expenditure. Or if you spend $140k advertising your products and you make $275k in profit from resulting sales, you can clearly see the return. But in the case of purchasing safety equipment, the return is not always so easy to calculate.
Investing in safety solutions
We like to see purchasing safety solutions as an investment, not an expense.
You have employees who need protecting, and they should be your first priority. Most companies say their employees come first, but the reality is, their customers and ultimately their owners, whether private or public shareholders are really their priority, so expenditure is kept deliberately low to maximise profits.
So, often safety becomes more about compliance rather than true safeguarding. Industries with low profit margins tend to struggle the most with this concept. Safety is the goal, but it can also be expensive. But what is the cost of not implementing the safest systems available for your employees?
Most of Optalert’s users are professional drivers, so to really put a number on a life, I went to the Australian company NRMA to get some answers.
Of course family, colleagues and friends would understandably say it is reprehensible to estimate a dollar figure on a life, and we’d agree, but for the case of specifically looking at the ROI question, the following gives a pretty accurate estimate of the cost of a road accident in Australia. Depending on the country in which you live, you could add or subtract from some of these calculations. For example, insurance and medical costs would be far greater in the US, but vehicle repairs may be lower. Generally, however, the rough estimates would remain the same.
Please note that prices have been quoted in US dollars.
Of course, not all accidents happen on public roads. If your accident happens on a worksite, like a mine, you can expect there to be a shutdown which is going to incur much higher costs; not to mention the vehicle costs themselves, which would increase the costs significantly.
The other factors not taken into account in the above are the costs to your brand and your reputation.
Do you want to be responsible for a preventable death? Certainly the general public, shareholders, other employees and your customers alike react very badly to corporate malpractice. You definitely do not want the fallout when this happens for your brand and for your conscience. And let’s be clear, accidents caused by fatigue or drowsy driving are preventable.
Drowsiness detection technology
We have the technology to alert individuals and supervisors of an employee becoming drowsy before they have an accident. So why not implement this technology to save your employees and your personal and professional reputation? If the answer is cost, then think again about the cost of not implementing the technology, and see if you change your mind.