The Bottom Line: How to Invest in Ergonomics to Improve Human Capital

Humantech (now VelocityEHS) ergonomist Blake McGowan summarizes the findings of a study that determined the key occupational health & safety metrics important to human capital management.

References: Bernstein, A and Beeferman, L. (2015). The Materiality of Human Capital to Corporate Financial Performance. Pension and Capital Stewardship Project. Labor and Worklife Program. Harvard Law School.  Bernstein, A and Beeferman, L. (2017). Corporate Disclosure of Human Capital Metrics. Human Capital Project. Labor and Worklife Program. Harvard Law School.

Video Transcript

Hi, my name is Blake McGowan, and I’m a certified professional ergonomist with Humantech (now VelocityEHS Ergonomics).

In 2015, Larry B. Furman and Aaron Bernstein from the Harvard Law School published a report that showed that human capital management is material to corporate financial performance. Basically, what this means is that investing in human capital improves corporate financial performance. So, what is human capital?

Human capital is a term that senior management team members understand, as well as financial advisors. It basically means all of the skills, knowledge, and abilities employees bring to their work, and it’s basically viewed in terms of value or cost to the corporation.

It is important to note that the management of occupational health and safety is also part of human capital management. Well, in 2017, the same group of researchers conducted a follow-up study to identify the key occupational health and safety metrics that are important to human capital management. They identified 12 metrics, and in my opinion, an effective ergonomics process can impact four of these twelve metrics. So, what are they?

First, it’s employee training. Provide as much employee training as possible. Research shows that the more employees are trained, the better the corporate financial performance is. Second, governance framework. Provide a management system to identify and track risk in your facility. It’s important to have these types of processes because it ensures standardization, sustainability, and insures proper performance. Third, governance oversight. Provide oversight to the process. This will ensure that senior members of the management team are involved in that process and oversight. And lastly, number four, lost-time injuries. Make sure to track and publish your lost-time injuries.

So, what does this mean? What’s the bottom line?

Well, first, it’s important to understand that investing in human capital management improves corporate financial performance. Second, there are some key things, ways you can invest in ergonomics to improve your human capital management: first, train all of your employees; provide a framework for your system; ensure the effectiveness of that framework and that system; and lastly, publish all of your lost-time injury data.

For more information on Humantech and the Bottom-Line series, please feel free to visit our website at Humantech (www.ehs.com).

Thanks, and have a great day.