The ROI of Fleet Safety
By Mobileye 02.11.2016 Fleet Management,Fleet Safety
Keeping your drivers, vehicles, cargo and other motorists safe is a core responsibility of any fleet manager. That’s why enacting a safety programme not only fosters safety, but it also has the potential to reduce your operating costs, allowing for that capital to be invested elsewhere.
Many managers know that fleet safety programmes can lower collision-related costs, but that’s just the beginning. There are many financial benefits available to those who invest in such programmes. Understanding these benefits will help build support and buy-in from other departments in the organisation.
An Opportunity for Significant Savings
While it seems obvious to invest in new vehicles and the training of new drivers with the goal of expanding your business, investing in a safety programme is another way to reduce operating expenditures, and to help that initial investment go even further.
Although fleet managers have come to take collision costs as an unavoidable – albeit painful – part of their yearly budget, thoughtful safety programmes and new technologies are changing that fact. Collision costs can be drastically reduced with appropriate safety measures in place.
Aside from the inherent desire to protect your drivers as well as other road users, the financial burden of collision clean-up is striking. The Department for Transport has even estimated that the average cost per accident in Great Britain is £71,885. A 2015 National Highway Traffic Safety Administration report in the US estimated that, in 2010 dollars, the cost of motor vehicle crashes – related and unrelated to work – specifically to employers is unsurprisingly high: workers’ compensation covered $2.2 billion in losses (1.2 percent of total compensation), disability insurance $0.85 billion (0.5 percent), and sick leave $5.6 billion (2.9 percent).
Tracking Your Safety Programme ROI
Where company decisions to invest in something new is concerned, numbers speak louder than words. Therefore, it is important to be able to quantify the financial benefits to the company that will come with instituting new safety measures.
Measuring the Return on Investment (ROI) of any potential safety training or devices can be difficult, mainly because there are numerous collision-related costs that can be difficult to add up. That being said, it is possible and worth the effort. One helpful way to view it is as a trial period or pilot programme with a potential new safety measure. It can be implemented with the entire fleet, or with a sample group.
These four steps can guide you to track and analyse how any new safety initiative can help your business financially:
- Measure: measure all of your meaningful collision-related data for the previous six months, year, and five years. For example: percentage of fleet vehicles involved in collisions annually, cost per type of collision (this can include vehicle repair, sick pay, lost productivity, replacement goods, temporary replacement vehicle leasing, insurance costs, etc.), and any other related statistics.
- Implement: Put your new safety measures in place, and make sure to note the date that a new piece of safety technology or safety training is rolled out.
- Track: From that date on, track the same collision-related statistics that you previously measured, for the following six months or year after the safety initiative is in place.
- Compare: After six months with the new measures in place, compare the statistics from before and after to understand the impact of the safety measures. This can be performed again after one year.
As you continually track data with a new safety programme in place, you can expect to see your collisions reduced, as well as some the following perhaps less expected benefits:
- Decreased insurance costs, both in payouts and premiums
- Lower cost per collision
- Enhanced image of social and corporate responsibility
- Increased accuracy of other risk management tools
- A new method of driver evaluation
- Lower fuel costs
Although it can seem daunting at first to implement new safety measures or technology, it is hard to deny the simple financial – and not to mention safety – benefits of doing so. Start with a trial period and go from there, your drivers and company management will thank you later.