Ergonomics, Not a Buzzword, a Bottom-Line Contributor
What is missing from office ergonomics is way to calculate the financial benefits.

by Ian Chong, CPE

Ergonomics is perhaps one of the most abused, misunderstood and underutilized concepts in today's business lexicon. Typically viewed as difficult to measure it is generally not the first thing people reach for to increase profitability.

Applied comprehensively to a business, however, ergonomics can be as important as strategic planning and quality control. It has a real and direct impact on productivity, performance, throughput, delivery of services and the bottom line. It can affect an entire business by enhancing the most important business component—the ability of workers to do their job.

How Can Ergonomics Affect the Bottom-Line?

Ergonomics helps workers function better by humanizing their workstations and tools, stopping their pain and improving their ability for task performance. Its prescriptions can be applied to both white and blue collar workstation environments. It reduces lost time, time loss, absenteeism and saves hard dollars that can be measured through standard management systems. Ergonomic applications allow workers to perform better, improve productivity, maximize quality and maintain customer service, all real world business principles and thus measurable by real dollars.

It is also now becoming well known that ergonomics applications can reduce worker compensation and medical costs. That's easy to measure. But other than that, how do you measure the result of ergonomic applications, actual productivity, especially in the white collar area? Sure ergonomic chairs make people feel better, but how do you measure that effectiveness on the financial statement?

E.R. Tischauer, in his book "Biomechanical Basis of Ergonomics", writes that a correct chair can add as much as 40 productive minutes to the working day of each productive individual. Easy to measure and tie to the bottom line.

But even Etienne Granjean has stated that a simple 10%-20% improvement results from ergonomic intervention. How did he come up with that figure? And what does it mean? Does he have an MBA and specific experience in business to knock heads with the Harvard MBAs who run major companies. How do the prominent ergonomists answer when asked "How do you measure the financial gains?"

I have heard prominent ergonomists give these textbook answers simply because they did not have the knowledge, tools or wherewithal to give a "real world" answer. Upper level clients don't want a quote out of a textbook, they want to see how you measured, your methodology and reasoning, and finally your "bottom-line". That's what hard core business decisions are based on.

Another hurdle is the plethora of "voodoo" ergonomic equipment and voodoo ergonomists touting panaceas for all kinds of occupational injuries. Is their answer to financial gains still Voodoo? I'm sure you know what the answer is. What is needed are real answers to real ergonomic interventions.

Real Dollar Value of Ergonomics

Productivity increases and performance improves when employees keep their minds on their work and aren't concerned about pain or the difficulty of the job.

What is especially difficult to grasp is the concrete dollar value of benefits and productivity in the white collar computer environment. "Sure ergonomic chairs will make them feel better, but an I getting my moneys worth?", says the skeptical manager. "Yes our ergonomics program bought everyone new wrist rests, but I approved the purchase just to shut everyone up, I think it's just a bunch of baloney" says another. "I sure don't see any direct impact on my bottom line".

White collar industries such as insurance companies have shown improvements by ergonomic interventions in worker performance and productivity. Improvements are illustrated by tracking such things as hours worked, units processed, quality audits made, number of analyst contacts, and amount of processable work activity. Ergonomic interventions in the workstations can be shown to directly impact these areas if baselines are established before and after interventions. A key is to track productivity according to client methodology and then improvements can made obvious. If tasks can be assigned a value and time/benefit ratio, they can be compared to management goals and can easily be tracked for dollar significance.

With a general measurement concept, you can measure any white collar activity, as easily as blue collar assembly line activity. You can even measure the often elusive concept of customer service in many different ways. But most importantly, you can measure "subjective" concepts in a hard and fast manner, assigning real dollar value to them.

What Is It You Can Measure in White and Blue Collar Ergonomics?

To really look at answers to financial statement impact, we must transcend the area of ergonomics and look into business operations.

Business concepts such as productivity, cost savings and performance can be easily measured and seen on an assembly line, such as in car manufacturing. Or even on (dis) assembly lines such as chicken factories. Benefits of ergonomics which enhance these can be seen here within hours, even minutes. This can be translated into dollars by even a rookie accountant. But how can you track cost savings and benefits in the white collar arena where only paper is shuffled and no real goods are manufactured, where information is transferred instead of boxes, where it appears more difficult to measure performance of someone sitting at a desk, talking on the phone and working at the computer all day?

With these concepts you are measuring ways in which the workers produce things, like briefs, reports or other paper deliverables. You can also measure the effectiveness of service to customers, as in bank tellers, legal assistants, secretaries or accountants.

A simple standard business methodology (one type out of many) of performance and productivity measurement is a documented daily, weekly, monthly management operating system. Such a system can track the hours of employees (regardless of task) in a white collar computer environment. Measurement of hours and what workers accomplish during those hours can be used to determine the influence of occupational injuries.

Very simply, without broaching worker intellectual capability, management must determine specific and reasonable expectations of what can be accomplished during a time unit such as a man-hour, considering work tasks, worker skills/capabilities, workload, and deadlines. This attainment is established and (earned) hours are measured against the goal as a percentage.

The result is a "lost time" concept. Like the worker compensation "time loss" in which a worker is absent from the workplace and productivity for that individual is zero, lost time is a measurement of how a worker is negatively impacted by an occupational injury. Measurements before and after ergonomic interventions can definitely showcase improvements in individual performance, measured against attainment or management goals. A measurement system like this can bring the benefits of ergonomics from a purely subjective concept into one that can be measured by hard dollars.

These concepts are well known and can be applied to the application of ergonomics. Hundreds of books are available on measuring business activity. It is not my intent to describe business measurement other than that it exists and is in use right now. Knowledge of good measurement techniques abounds in most business organizations and is taught in all business schools across the country.

It is the unusual application of these standard business tools to ergonomic principles that is significant.

How Do You Measure The Savings in Ergonomic Applications?

Back to the domain of business operations. If you can't measure current productivity in your white collar environment, you certainly can't measure improvements after ergonomics applications have been installed. Therefore, a good tracking and measurement system must be in place and continuously updated to measure these benefits.

Usually teaming up with someone in senior management is the major ingredient in installing or using a standard business measurement system. Management systems measuring performance, productivity and attainment are second nature to an operations manager in charge of productivity and needed corrective action.

We have seen banks improve customer service by 10%-25%, measured in quality of service, customer retention and new customers. We have seen accounting groups improve quality of work up to 50%. We have seen customer service representatives take on a new attitude and provide better (read nicer) service while effectively and efficiently handling an increased number of calls. Even computer programmers can show improvement in development deliverables. They report a clearer mind, sharper thinking and improved creative attitudes as a result of ergonomics.

Bill Brough, CPE of Washington Ergonomics has had insurance industry projects measured by good management systems, quoting (productivity and cost savings) benefits in six figures a clip. You can't get any more white collar than that.

What You Need To Do To Develop a Measurement Methodology

The basic idea is teaming with a senior level manager to determine the best way to measure ergonomic interventions. What many ergonomists fail to understand (not having been to business school) is that first of all, an all-important baseline is needed to measure against. This baseline shows where the organization is in terms of throughput. It shows how the organization is working now, before ergonomic changes. This measurement must be taken prior to intervention so improvements can be properly charted. Before making any modifications to workflow, methods or workstations, you must have something to measure against, generally, the current level of productivity.

Secondly, you must also establish a measure of attainment or goal. Good managers are also very adept at determining these goals. The attainment is a measurement of how close to your goal the production or throughput is per day, week, month or year. If the delta of this measurement is determined, it can be charted and the impact of your ergonomics applications have can be shown. Be careful here. The notorious Hawthorne principle comes into play and is a strong weapon for those skeptics who would undermine your efforts due to turfitis or other political reason.

Throughput is a key. Most organizations are interested in higher production- more, faster, with fewer people and with better quality. Ergonomics can help this. Real, not voodoo ergonomists are expert in helping client companies do this. However, ergonomics school/experience usually doesn't prepare us for determining such aspects as the profitability of business. Better to team with someone who is an expert in these manners, who has the training, education and experience in business measurement. It's very difficult to do it all yourself.

Thirdly, you must determine how you are going to measure this. You can't depend on your rookie accountant to measure throughput in the white collar area like you can in the blue-collar craft area. Nuances are more subtle and are less recognizable, However indicators are available to measure ergonomics applications in all white collar areas. Sometimes it requires an unbiased research into how well a computer operator is working according to management decree and expectations. A measurement of quality or creativeness may be needed. Your senior manager will be able to help you determine how to measure this type of performance. Most worktasks and deliverables, no matter what they are, can be measured somehow.

In the real world of business, generally, someone just has to show us how they want to measure benefits and gains in their particular company. The relationship of performance, productivity and attainment is only one of many methods.

You also have to know how the client wants to measure what and by which unique indicator before installing a measurement methodology. You don't want to measure your work in English when they already measure their productivity in Portuguese.

It is also important to install your ergonomics measurement system as seamlessly as possible. Working closely with management is one component. Determining how they measure is another. Putting the entire package to easily show the client your improvement of his bottom line makes you all the more valuable. If you can measure these things, even your rookie accountant can determine dollar value to your work.

Bottom Line Benefits of Ergonomics Applications

We have found that investments in ergonomics can be returned three to tenfold in improved performance, throughput and corollary savings. This is just the tip of the iceberg. Ergonomics also prevents future occupational injuries and productivity problems. Cost avoidance is also another way to measure ROI.

Ergonomic solutions improves productivity, reduces lost time, time loss, absenteeism and saves hard dollars measurable through standard management systems. They can lead to lower worker compensation premiums and reduced medical costs.

Understanding of all these concepts will also give you, as an ergonomist, a better way and higher level on which to strut your stuff. Everyone wants to hire someone who can improve things—especially if they can prove it with regard to the bottom line. Moreover, if you can tie your efforts directly to the financial statement and the reduction in worker injuries, you are indeed on your way to becoming an ergonomist who understands business needs—and a very successful one at that.

 

Ian Chong, CPE is Principal of Ergonomics Inc. in Seattle WA. USA. The firm has over 20 years of experiences providing ergonomic solutions to both public and private sector companies. For more information please contact:

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