Justify Automation with Robotics RIO Calcultor

[updated April 2026]

The initial capital expense of a robotic system can be overwhelming, especially when considering new automation. For this reason, return on investment (ROI) is an important calculation. The industry-proven average ROI is 24 months for robotic systems. A Robotics ROI Calculator subtracts your estimated labor costs with a robot from your current labor costs. It then subtracts the cost of the robot from the amount of labor savings. It seems simple, but you must dig deep to find the true ROI.

Calculating Costs

Cost calculations are only as good as the input numbers. Make sure you include all cost on both the payroll side and the cost of the system. Your new robotic system will require tooling, part programming and employee training, to name just a few. A qualified robotic system integrator will include these items in their proposal. Consider working with a certified RIA integrator.

There are many hidden payroll costs for employees who process parts in a manufacturing environment. Some of our customers have reported that the true cost of a manufacturing employee, when adding extra expenses and hidden costs, can be about double that of their hourly wage. Start with wages and payroll taxes, including unemployment tax. From there, look at the hidden costs – HR costs, onboarding, benefits and safety.

Calculating the real return on investment (ROI)

Hiring and retaining workers for manufacturing jobs can be challenging, and even more so for jobs that involve repetitive tasks. The Society for Human Resource Management (SHRM) says that the average time it takes to fill a position is 36-44 days and more than $4,700 in recruiting costs.* It can be hard to retain these workers, which means the hiring process happens often.

Onboarding costs

How much time do you spend bringing a new employee on to your team? SHRM estimates onboarding costs, not including recruitment and job specific training, is around $1,500 – $5,000. A new employee requires time from HR, management, supervisors and fellow employees. Once the employee is ready to work, expect more down time during training. Time spent on activities other than production lowers productivity.

Worker benefits

Companies invest in their workers to stay competitive. Benefits such as medical insurance, retirement, paid time off, life insurance, continuing education add up quickly and increase annually. A robot, by comparison, requires none of these.

Safety-related expenses

As manufacturers, we know that work accidents happen despite a diligent EHS team and well-trained manufacturing team. Safety costs include the company’s risk insurance and workers compensation, as well as safety gear & PPE costs. Another consideration is the outcome of a serious injury involving unplanned settlements.

For some companies, safety presents the primary reason for robotics. Indiana Limestone Company adopted robotic automation for the express purpose of reducing a workplace hazard. By adopting a robotic material handling system to move and stack heavy parts coming down a saw line, they eliminated a hazard and reduced their workers compensation claims.

Higher profit potential not included in Robotics ROI Calculator: This is where you can realize your true ROI.

Higher productive time

A robot works continuously. It will consistently hit the same cycle time throughout the day. It does not take breaks; it does not stop for lunch; it does not talk about the basketball game last night or the latest show on Netflix. The robot will simply produce more parts than a human can day in and day out.

Better quality and less scrap

The inherent repeatability of a robotic system allows for less scrap and waste than a person can achieve. It is common for robots to perform between 90%-99% efficiency. Compare this with what you are getting today. The robot produces consistent quality every day.

Dana Incorporated is a leading manufacturer of Tier 1 auto components…

Higher capacity

Robotic systems provide potential for additional revenue from increased production capacity. Many customers have seen additional capacity and throughput on their equipment from the implementation of robotic automation. Utilized properly, the extra capacity can really drive your ROI beyond the normal 2 years.

The bottom line…

Before investing in a new robotic system, conduct a thorough ROI study. Include all payroll costs and all costs of the new robotic system. Then review the higher profit potential of the system. If you have chosen the right project to automate, you will be pleased with the ROI.

KC Robotics provides ROI consultation as well as a Robotics ROI Calculator for companies interested in a new robotic installation. Please contact our sales engineers for assistance.

Learn more about how KC Robotics can automate your production system and more about ROI by following our ROI Series Part 1.