Many businesses just see their workers compensation insurance cost rise year after year and pay the bill as an accepted rising cost of doing business.
It doesn’t have to be that way, as all we have to do is put some focus and attention in developing a solid safety program in order to reduce claims and insurance losses that lead to savings on your worker’s compensation bill. Without initiating some preventative actions and safety program development, that cost will continue to rise depleting your bottom line.
That direct cost you see is only the tip of the cost iceberg. What you don’t see or hear about is additional costs associated with an injured employee receiving compensation. For every dollar spent on a worker’s compensation insurance claim, you can multiply that number by a factor of 4 OR MORE because of hidden costs. What are these hidden costs?
- Loss of productivity or services provided (interruption of normal work flow)
- Additional supervision time and administrative cost
- Overtime cost
- OSHA penalties
- Property damage
- Equipment damage
- Recruiting replacement and training expenses
- Loss of business good will and company image to community
- Emotional disruption of co-workers affecting productivity
- Morale issues
- Claims administration/costs
There is money to be saved by company leaders putting forth the effort in designing/implementing a strong safety and loss prevention program to reduce claims.
How Do You Do It?
There is no silver bullet, no quick fix; no easy path to creating an accident/injury free workplace that pays dividends.
It takes the right combination of:
- Safety policies, practices, and procedures
- Defined standard operating procedures and job safety analysis for each position
- Training, both new employee, and annual
- Regular and systematic employee communication vehicles reiterating leadership’s expectations surrounding safety
- Recognition and reward
- Motivation, persistence, and a strong willingness to be better in the area of safety
- Frequent and regular self-inspections
- Safety Observation Program, similar to DuPont’s STOP Behavior Based Safety Observation Program
- An increasing number of employee involvement with the safety effort year after year
- Technical safety expertise to lead your team in developing the various elements of a strong safety and loss prevention program
With all of those elements working in tandem, accident rates and claims will start to fall.
When all of those elements are in play and your accident and injury claims start to fall, this will positively impact your Experience Modifier Rate, EMR, or MOD factor. This is a numeric representation of a business's claims history and safety record as compared to other businesses in the same industry, within the same state, and this figure has a significant impact on how much you pay for workers compensation costs.
A MOD rate of 1.0 means that you are paying the average amount of what others in your industry would be paying. It means you are average.
Average is not where you want to be as a company. As a leader, improving your company’s safety performance and consequently reducing your worker’s compensation bill, must be on the agenda for the coming new year. With time, effort, and professional guidance, you can get your company on a glide path to lower insurance costs, increased employee morale and productivity, and increase company stature in the community, as you become known as an employer who takes safety seriously. Explore just how much money can be saved when you drive down your worker’s compensation costs by building a solid Safety and Loss Prevention Program.
What’s not to like?
What’s holding you back?
Let’s get moving!
If you are a business owner interested in reducing your ongoing Worker’s Compensation costs, accident/injury/loss claims, and developing your organizations safety program and culture, call Debra J. Parent, PHR, SHRM-CP and her experienced team, at 508-884-6798, or email [email protected]
Posted on Thu, January 10, 2019
by Debra J. Parent, PHR, SHRM-CP