Misleading EHS Indicators – ROI and Cost

Evren Şener
Evren Şener
-Jul 27, 2023

Identifying and monitoring success metrics for almost anything is already a challenging endeavor, but when it comes to Health, Safety, and Environment (EHS), the difficulty level soars to new heights. Throughout my experience in different industries and numerous site visits, I have observed that many workplaces celebrate success based on metrics such as the number of millions of man-hours completed without Lost Time Injuries (LTI), accident-free days, and no fatalities. However, amidst these celebrations, a crucial question always lingered in my mind: How do we truly measure success in EHS? 

It seemed like an elusive task with only one utopic approach – running the same project without the dedicated EHS team and the extensive safety efforts and comparing the results between those. But what would those differences reveal? This conundrum leads us to delve deep into the metrics we aim to measure, therefore let’s leave the monologues behind and embark on this enlightening journey together.

Common EHS metrics are typically divided into two main categories: leading indicators and lagging indicators. Though the focus has recently shifted towards leading indicators, an optimized combination of both can yield better EHS measurement results. Here are some examples of lagging and leading indicators:

Lagging Indicators:

  • Lost workdays
  • TRIF (Total Recordable Injury Frequency)
  • Worker compensation

Leading Indicators:

  • Training hours
  • Site visits/walkthroughs
  • Number of safety audits/inspections

Lagging indicators are traditional safety metrics that have a reactive focus while leading indicators concentrate on proactive measures for future EHS performance.

Next, let’s explore ROI and cost-related metrics. Relying solely on cost or ROI as EHS indicators can be misleading and fail to provide a comprehensive picture. Here are some pitfalls of solely focusing on these indicators:

Neglecting Leading Indicators: When cost and ROI become the primary focus, companies emphasize lagging indicators, such as reduced incident numbers and costs. However, this approach may lead to unrealistic expectations, as incident numbers can fluctuate from year to year. Merely committing to reducing incidents by a specific percentage within a short timeframe may not be reliable or feasible. Instead, a collaborative approach involving elements like EHS organization, management systems, safety culture, employee engagement, tools, and technology is essential for sustained safety improvements. 

As a pioneer technology EHS company, we have done our best to educate our customers and potential customers regarding the expectations of our products and services. The number of incidents can vary from year to year and if we commit an outcome like we will reduce the number of incidents by 80% in a year, how reliable a commitment this can be? What if the company’s incident number increases by 80% next year? And yes, the main goal is certainly to reduce the incidents but that requires a long-term collaborative approach with the elements of EHS organization, management system, safety culture, employee engagement, tools, and technology – but not only technology! So if you see anything on our website like we reduced the incident by x% in 6 months, you can consider that our website is hacked! 

Overlooking Human Factors: Solely focusing on financials ignores the human element, which plays a crucial role in workplace safety. Improved safety culture and engaged, empowered employees who experience less stress are less likely to experience accidents and non-compliance. Failing to consider human factors can hinder overall safety efforts and focusing on lagging indicators and financials can lead to underreporting, preventing the company from learning and taking appropriate action to prevent future incidents.

To genuinely prioritize safety while minimizing costs, organizations should adopt a holistic approach. While cost and ROI are essential financial metrics, they should not be the sole indicators of an organization’s EHS performance. Relying solely on these measures can lead to a misunderstanding of EHS risks and hinder efforts to create a safe workplace. To overcome these pitfalls, organizations should embrace a more comprehensive approach that considers preventive measures, human factors, and the development of a robust safety culture.

As an innovative technology-driven EHS company, our commitment to safety goes beyond simplistic metrics and superficial reductions in incident numbers in short periods.  We understand the complexity of EHS challenges and advocate for a collaborative approach that encompasses the holistic aspects of safety. Promoting safety requires a continuous effort to build a robust safety culture, engage employees at all levels, and implement effective management systems.

In conclusion, measuring robust EHS metrics is not relying solely on lagging indicators or financial metrics. Instead, it’s about embracing a balanced approach that incorporates both leading and lagging indicators while considering the human factors and safety culture aspects. By adopting this comprehensive approach with AI and cutting-edge technology, organizations can gain valuable insights to proactively identify potential risks and support decision-making processes, predict trends, use their time more efficiently, and continuously improve their EHS performance.

#Journey to Zero
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