Leading and Lagging Indicators: Complementary Parts of EHS Metrics Success

We live in an age where the success of many—if not most—business initiatives depends on the proper collection, analysis, and utilization of data. This holds true for those of us in the environment, health, and safety (EHS) arena, and EHS managers and professionals must ensure their lagging and leading indicators work together in order to better understand and improve their programs.

However, misconceptions persist surrounding the definitions and use of leading and lagging indicators. While leading indicators have been shown to be crucial for preventive action related to safety and health, there will always be a place for lagging indicators. These different data sets are not meant to be a replacement or substitute for the other—they must be considered and evaluated together as two complementary sides of the EHS metrics coin.

First, Recognize Good Metrics

Organizations have more data streams than ever before, and while these streams can be great assets, they also can be a bit overwhelming. EHS managers can easily find themselves drowning in data, and not all data is necessarily relevant to the success of their initiatives. So, what makes a “good” metric, one that can help managers guide their EHS programs while also making the business case to key stakeholders elsewhere in the company?

Simply put, a good EHS metric is one that provides decision makers with the data they need to make fact-based decisions—it must be aligned with the overall goals of the EHS program as well as other metrics and methods used within the organization to measure other business goals.

According to the Global Environmental Management Initiative (GEMI), a nonprofit association of businesses concerned with improving EHS performance worldwide, a relevant EHS metric must be able to accomplish one or more of the following:

• Demonstrate progress toward the organization’s goals and objectives.
• Inspire or motivate a change in behavior or process.
• Make it easy to measure and/or collect the data relevant to the metric.
• Be easily understood by organizational management.

Both lagging and leading indicators can meet these objectives; however, they accomplish this in different ways.

There Will Always Be a Place for Lagging Indicators

A lagging indicator is a measurable factor, statistic, or datum that demonstrates facts about events that have already occurred—essentially, it is a reactive measure of your safety efforts, an evaluation of past performance rather than current or future conditions. While the reactive nature of lagging indicators often make them more objectively accurate for assessing conditions than leading indicators (which we’ll discuss in a moment), a significant drawback to lagging indicators is that they do not necessarily reveal the catalyst (what we might call the “root cause”) for the workplace incident or environment they signify. For example, a basic injury and illness report will not tell an EHS professional what the root causes of these injuries or illnesses are.

Despite their limitations and a current shift in focus toward leading indicators, lagging indicators are not going anywhere. Many compliance obligations, for instance, are dependent on lagging indicators, such the tracking and submission of your Occupational Safety and Health Administration (OSHA) Form 300A data as well as various forms of environmental reporting.

Here is a sample list of some common lagging indicators that can be of service to your EHS program:

• OSHA injury and illness logs;
• Air emissions data;
• Toxics Release Inventory (TRI) data and subsequent reporting;
• Notices of violations and/or citations from a regulatory agency;
• Financial costs of fines and/or penalties related to EHS; and
• Your organization’s workers’ compensation experience modification factor (EMF), which can also be known by a variety of other terms including “Experience Rating,” “Experience Modification Rate,” “E-Mod,” “EXP-Mod,” “EMR,” or “ModX.”

When examined in its own right or compared year-over-year, these indicators fulfill many of the goals of a good metric established above: The data is easy to collect and measure, it can readily demonstrate either positive progress or a need for improvement, and, when communicated well, it can provide decision-making support for key stakeholders.

Leading Indicators Help Create a More Proactive Safety Culture

A leading indicator is measurable factor, statistic, or datum that indicates (or is at least believed to indicate) the future value or direction of another variable—these indicators are more proactive in nature as they can be used to predict an outcome or the behavior of something else by tracking in-process measures of performance. For example, the frequency and completion rates of employee training may be a leading indicator for employee productivity and safety participation.

The key advantage of leading indicators is that they can prompt corrective actions before an accident or other negative incident occurs, and the predictive value of these data increases dramatically when several indicators are used or evaluated in combination. To continue with the example of tracking employee safety training, an evaluation of the frequency of training in combination with near-miss reports and/or site EHS audits will provide a greater predictive value for injury rates and safe behaviors on the part of employees.

Here are examples of some common EHS leading indicators:

• Frequency and completion rates of employee health and safety training;
• Near-miss reports (note that, depending on the context, these reports may also be a lagging indicator);
• EHS audits;
• Employee safety surveys that measure your workforce’s perceptions of safety programs and culture;
• Review of the number, type, and/or level of various regulatory certifications and/or EHS management systems; and
• Measures of management commitment to EHS initiatives (e.g., money invested, frequency of meetings focusing on EHS priorities).

When used correctly, leading indicators can have a very positive impact on organizational safety culture and have become of increasing importance to the EHS profession. For more information, check out OSHA’s guide, Using Leading Indicators to Improve Safety and Health Outcomes, which is available for download here.

Bringing Your Metrics Together

Combining the comprehensive use of both lagging and leading indicators is essential for making more informed, data-driven decisions regarding your EHS program. Once you establish a system and employ the right tools for optimizing the use of your indicators, you can more confidently ensure that your data are providing you with relevant insights into the state of EHS at your organization.