How to make a business case for workplace recovery offices

Decision makers have limited financial resources and often need to verify that there is a return on investment. A robust business case can give decision makers confidence that their investments in workplace recovery offices will be worthwhile and defensible when compared to alternatives. Please find below the essentials for preparing a business case.

What is a business case?

The purpose of a business case is to outline the costs and benefits of certain initiatives, in this case, of securing access to workplace recovery offices. The costs of workplace recovery offices are straightforward to assess and can be obtained through quotations. However, estimating the benefits of having the services can be more challenging. Estimating the benefits can be divided into a number of steps:

Step 1: Identify the types of incidents that could impact your access to your offices.

For each type of incident, estimate how long access will be blocked.

For example, one incident might result in not having access to your offices for 10 days and other incidents may result in no access for 20 or 30 days. Clearly there are many reasons why your organisation might not have access to its offices, but for the purposes of the analysis, the cause is not relevant. All that matters is the amount of time without access.

 Step 2: Estimate the probability of each incident.

There are a number of techniques used by actuaries to estimate the probabilities of incidents such as these, including drawing on historical data for similar types of organisations.

 Step 3: Consider the impact of each incident on profitability, revenue etc - with and without workplace recovery offices.

 This requires estimates of: 

·      Staff time lost in response to not having access to the office, with and without workplace recovery offices. Getting staff back to work more quickly is the key source of benefit from workplace recovery offices. This is illustrated in the figure below, which shows percentage of staff working in the days following a hypothetical incident. The vertical distance between the blue and yellow lines shows the beneficial impact workplace of having recovery offices. In practice, this could be broken down into different types of staff and adjustments are made for the productivity of staff working from different locations. 

·      Loss of profits as a result of staff time lost. This captures the impacts of lost production (including any reputational damage) as well as lost business development and marketing opportunities.

Step 4: Identify the level of risk aversion of decision makers.

The risk preferences (appetite) of decision makers can be elicited through simple questions and can have a substantial effect on the estimated benefits of workplace recovery offices.

Step 5: Bring this information together to calculate the benefits.

 The benefits of workplace recovery offices depend on the extent to which they mitigate the risks outlined above. These benefits can be quantified through some basic calculations.

Comparing benefits and costs

The benefits can then be compared with the costs, frequently through a benefit cost ratio or similar measure. This gives a clear indication to decision makers about the return on workplace recovery offices as it applies to your organisation.


 About Aither  This material was provided by Aither. Aither is an economics advisory firm with experience in developing business cases to assist decision making under uncertainty, including in through the application of their risk and business continuity models. See www.aither.com.au.

About Aither

This material was provided by Aither. Aither is an economics advisory firm with experience in developing business cases to assist decision making under uncertainty, including in through the application of their risk and business continuity models. See www.aither.com.au.