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The ROI of EHS: Key Takeaways from the 2019 State of the Industry Survey

Toby Graham /
grinder

What does an effective EHS program look like?

How do EHS and safety culture correlate to organizational performance?

What are the costs of relying on outdated EHS systems?

For today’s businesses, these are the (literally) million-dollar questions of environment, health, and safety. They’re questions about the ROI of EHS, questions every safety professional has faced when trying to “sell” organizational leadership on their initiatives. But for years, they were the kinds of questions without readily available answers.

Until now. We’re pleased to share the 2019 State of the Industry: EHS Program Trends report, collected by Informa Engage and EHS Today, on behalf of KPA. The inaugural study explores EHS program trends through the lens of bottom-line organizational impact—how modern technology and a thoroughgoing investment in safety improves performance.

Our Purpose and Methodology

The purpose of this study was to examine the use and importance of technology for EHS programs among high performing and low performing organizations. In October 2019, EHS Today and Informa Engage emailed invitations to 40,178 subscribers to participate in an online survey.

From October 9 to October 24, 2019, a total of 596 completed surveys were received, for an effective response rate of 1.4%. Of those, 556 were involved in their organizations’ EHS programs. The report is based on an analysis of those 556 respondents.

Here’s how our respondents broke down in terms of EHS program involvement and measurement:

Demographically speaking, respondents came from diverse arenas, both in industry and size representation:

What We Learned, at a Glance

Several clear trends emerged from our research. The main takeaways can be summarized as follows:

1. The value of an EHS program comes down to ROI and mindset.

2. Companies that prioritize EHS tend to be high performers, while companies that neglect their programs perform poorly overall.

3.  Many organizations encounter the same obstacles, which can be alleviated through improved technology systems, executive leadership, and processes that enforce a strong safety culture.

In other words, safety and the bottom line are inextricably linked—but not all decision-makers realize this, appreciate the extent to which the two are interconnected, or know how to turn negative performance around.

The survey results confirm that most organizations see EHS as imperative it is. They understand the importance of keeping workers out of harm’s way. They recognize that every incident has both a human and financial toll. However, they differ in terms of how much money they’re willing to spend and how much time they’re willing to dedicate to improving their programs.

Some organizations look at EHS as an opportunity to drive positive results. Others think of it as a necessary evil.

The difference is in ROI and leadership’s attitude towards it. If technology purchases are viewed purely as an expense (without conducting a cost-benefit analysis), EHS programs appear to be a drain on the company’s bottom line, leading to lower investment and little support. This becomes a self-fulfilling prophecy, as poorly-supported EHS programs typically demonstrate substandard results.

The Difference: Poor Performers vs. High Performers

Central to our research was the measurement of performance. We split organizations into two groups: poor performers and high performers.

We used three primary metrics to distinguish high performing organizations from those that performed poorly: injury rate, absenteeism, and safety violations reported within the past year.

Survey participants fell into the high or poor performer bucket based on self-selected responses regarding performance data. We compared all ratings against standard industry averages.

How does EHS investment differ at high performing and low performing organizations? And how can a low performer turn negative trends around and achieve EHS success?

We’ll explore those million-dollar questions in further detail as we dig deeper into the 2019 State of the Industry: EHS Program Trends survey in several upcoming articles. Be sure to stay tuned to our blog in the next few weeks so you don’t miss anything—or, better yet, subscribe here.

Until then, if you’d like to review our research report for yourself, download it for free here.

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