Purchasing a lifting aid is an investment that pays off in several ways: less physical strain on employees, fewer absences due to back problems, and higher productivity. But how do you convince a financial manager or executive team of the added value? By calculating the payback period in concrete terms. In this article, you’ll go through a step-by-step guide on how to determine the ROI of a lifting aid, so you can make an informed decision backed by hard numbers.
Gather the relevant cost data in advance
Before you can make a calculation, you need reliable data. Don’t skip this step: the quality of your final result depends entirely on the completeness of your input. Gather the following data for your current situation—that is, without a lifting aid:
- Labor costs: the gross hourly wage, including employer contributions, for employees who perform manual lifting
- Absenteeism costs: the average number of sick days per year attributable to physical ailments, multiplied by the daily cost per employee
- Productivity data: How many tasks (lifting motions, pallet movements, etc.) are performed per hour or per day?
- Costs associated with workplace accidents: these include replacement costs, administrative expenses, and any fines or liability costs
- Purchase price of the lifting aid: includes installation, training, and any maintenance during the first year
Gather these figures from HR, the accounting department, and the person in charge on the shop floor. The more specific the data, the more reliable your calculation will be. A rough estimate will lead to an unreliable result and undermine your business case.
Calculate the total current costs without a lifting aid
Now add up all the annual costs associated with performing lifting tasks manually. This will give you the current cost base—the benchmark against which you will evaluate the investment. Proceed as follows:
- Multiply the number of employees who perform manual labor by their average annual labor cost (including social security contributions).
- Add the average annual cost of absenteeism: (number of sick days × daily cost per employee) × the number of employees involved.
- Estimate the loss of productivity: How much time is lost due to fatigue, slow responses, or repairs following an incident?
- Include any costs associated with temporary replacement, occupational therapy, or workplace accommodations.
The result is an annual total that reflects the true cost of the current situation. Many companies underestimate this amount because absenteeism and productivity costs are not always visible in a single budget line. Yet they are real and measurable. For pallet handling or other repetitive lifting tasks, these costs often rise more quickly than expected.
Determine the expected savings after the investment
Now that you have a clear understanding of the cost basis, determine what savings an ergonomic lifting aid can realistically deliver. Be conservative in your estimates: it’s better to underestimate an investment and be pleasantly surprised than the other way around.
Consider the following categories of savings:
- Reducing absenteeism: A lifting aid systematically reduces physical strain, leading to fewer back problems and fewer sick days. Estimate a realistic percentage based on the nature of the tasks.
- Higher productivity: Employees can work faster and for longer periods without getting tired. Calculate how many additional tasks per hour become possible.
- More flexible use of personnel: With a vacuum lift or hoist, even employees without specific physical strength can perform the tasks, which increases scheduling flexibility.
- Lower costs associated with workplace accidents: less risk means fewer incidents and the associated direct and indirect costs.
Add up all these expected annual savings. The result is the annual net savings that you can attribute to the investment in the lifting aid.
Apply the payback period formula
Now that you know the total investment cost and the annual savings, you can calculate the payback period. The formula is simple:
Payback Period (in years) = Total Investment Cost ÷ Annual Net Savings
Suppose the lifting aid costs 8,000 euros, including installation and training. The annual savings on absenteeism, productivity, and replacement costs amount to 4,000 euros. In that case, the payback period is: 8,000 ÷ 4,000 = 2 years.
- Record the total purchase cost of the lifting aid (including delivery, installation, and any training).
- Write down the annual net savings you calculated in the previous step.
- Divide the purchase price by the annual savings.
- The result is the payback period in years. Would you like it in months? Then multiply by 12.
Don't forget to factor in the annual maintenance costs of the appliance. Subtract these from the annual savings before doing the math. A maintenance contract often provides predictability in this regard: you know in advance what the annual service costs for the appliance will be, without any unpleasant surprises.
Interpret the results and make a decision
A payback period of less than three years is considered a strong business case for a material handling investment in most industrial contexts. A payback period of between three and five years is generally still acceptable, especially if the equipment has a service life of ten years or more. If the payback period exceeds five years, it’s worth critically reviewing the assumptions: Have the savings been estimated realistically? Are there additional benefits you haven’t factored in yet?
Be sure to check the following points before making a final decision:
- Are the calculated savings based on a realistic usage scenario, or on an ideal situation?
- Did you take the learning curve into account when introducing the device?
- Are there any grants or tax benefits available for ergonomic investments that reduce the net cost?
- Is the lifting aid suitable for the specific applications in your workplace?
A positive payback period calculation is a powerful argument, but it is also a starting point for a broader discussion about safety, workplace comfort, and the future-proofing of the workstation. Use the result as supporting evidence, not as the sole criterion for decision-making.
How Logitrans Handling Helps Calculate the ROI of a Lifting Aid
We understand that investing in ergonomic material handling equipment is a well-considered decision. That is why we support our customers not only in selecting the right equipment, but also in developing a solid business case. Specifically, we offer:
- Free workstation analysis: Our specialists analyze the current situation in the workplace and identify risks and inefficiencies.
- Customized, practical solution: Based on your specific application—whether it involves boxes, bags, pallets, or rolls—we’ll recommend the most suitable lifting aid.
- Demonstration room in Drongen: Test the machine with your own materials before you decide, so you can be sure you're making the right choice.
- Maintenance and service: With a maintenance contract, the equipment remains in optimal condition and annual service costs are predictable, making your ROI calculation more reliable.
- Training during installation: We ensure that employees use the device correctly and safely right away.
Would you like to know how quickly a specific lifting aid will pay for itself in your situation? Contact our specialists for a no-obligation consultation and a free, customized workstation analysis.
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