My best HR management idea: Saving on workers comp
September 24, 2009 by Jim GiulianoPosted in: In this week's e-newsletter, Latest News & Views, My best management idea, policies
When his boss told HR manager Hal Beeler to look into ways to cut workers comp, he figured out a simple but effective approach.
Here’s his story:
To keep a lid on our workers compensation costs, we needed an effective light-duty program.
It’s not that we had a lot of injuries, but when we had one, the worker tended to stay out for what seemed like forever.
Problem with developing light duty: Where do you start? Whenever we asked managers to give us ideas for light-duty jobs, they’d usually come back with, “I dunno.”
So we tried a different approach with them, without even mentioning “light duty.”
What would you like?
Instead of asking them for suggestions about light duty, we asked: Give us a list of tasks that you’d like to see done in your department but never have the time or people to do.
When we phrased it that way, our managers deluged us with ideas. For instance, nearly everyone said cleaning up the workplace would be great but they had neither the time nor the people.
We took those ideas and categorized them into light-duty jobs that injured workers could do. The results: Since getting the managers involved and creating light-duty jobs two years ago, we’ve cut claim amounts by 75%, which has had a great effect on our premiums, too.
(Hal Beeler, Modesto, CA)
Tags: light duty, workers comp
September 29th, 2009 at 8:07 am
Thank you a very simple and effective idea. Responses really are in how quesitons are presented.
September 29th, 2009 at 8:50 am
We have had a light duty list in place for longer than I have been employed with this company. One light duty we have is counting a soft rubber 1 inch by 1/4 inch piece of matterial that comes in large boxes. We have the individual sit in the office while counting these small pieces to make sure that the quanity listed is correct. After 1 day of doing this the individual is usually back at the doctor asking to come back to work with no restrictions. Of course we have more produtive light dury tasks for those who truely want to come back to work but are unable to return to their normal job.
September 29th, 2009 at 3:27 pm
I hate to say it but you people are only looking at the tip of the iceberg. Controlling Comp costs requires a multi-step process starting with recruiting. 1st Don’t hire a comp claim. Look for those big gaps in employment and ask what they were doing. If they claim they were working under the table or give evasive answers, think twice about hiring them.
Once on board, make sure they are trained to do the job right from the start. Don’t let them learn how to do it wrong and make sure the supervisor is keeping a constant and obvious eye on them. If the managers have a production bonus, see that the cost of workers comp claims is deducted from their profits; too many managers want production and see safety as an impediment; this will change their minds in a hurry.
Do a thorough job hazard analysis and install ergonomic equipment or change the work site/duties to prevent injuries. Its really not that hard, just ask the workers how to make it safer.
Interview your company physicians to ensure that their goal is to get the worker back on the job as fast and as safely as possible, if they don’t agree, keep interviewing the Doctors until you find one who believes in returning the injured worker back to the job is his main goal. Therapy should be preferred over drugs. Walk the Doctors, nurses and therapists through your plant, explaining all jobs and provide them with detailed job descriptions so when an employee sees them, they can’t exaggerate their duties. Also provide a list of light duty jobs for them to choose from when deciding if modified duty is an option.
These are just a few of the programs I’ve used to make significant reductions in my injury and workers comp rates. They saved my companies hundreds of thousands of dollars and they cost almost nothing but some of my time.
September 30th, 2009 at 1:15 pm
I have to agree with ALL of the comments above. All present great ideas and solutions for reducing a businesses total cost of risk, not just workers’ compensation premiums.
There are some very important issues here and even more to address. Workers’ compensation costs are impacted in many ways. First, there is the “loss prevention” piece which can help eliminate risk factors that contribute to work related injuries. Although we often times think that we can eliminate these risk factors with effective loss prevention methods, it is inevitable that worker injuries will occur. We just can’t eliminate the human element.
Corporate culture directly impacts your workers’ compensation results. If your culture doesn’t support a safe workplace, transitional light duty programs, pre-employment screening, job training, wellness, etc, your workers’ compensation costs will be adversely impacted. The culture must be supported from the top down and the shift must be actively managed on a consistent basis.
To begin with, finding the “right employee” is key. There are many tools out there that provide very specific results. In particular, drug screening and criminal background checks. Both pre-employment tests can tell you if the persons past is “clean.” But, are we missing the boat here? How about the employee that bought clean urine off the internet to pass the drug screen or the other employee that has anger issues but just hasn’t acted on them yet? You just hired them because they “passed” the tests. No test is perfect, but some are more effective than others, especially when trying to reduce workers’ compensation costs. Tests that identify behaviors associated with lying, cheating, stealing, addictive behaviors and entitlement mentalities, effectively identify individuals that may be “high risk” for these behaviors and most likely not a candidate for your company hiring practices. This is a tool that your workers’ compensation carrier should have at it’s finger tips to offer it’s clients.
Next, we need to realize that cost and severity of workers’ compensation injuries aren’t just driven by the type of injury or how hazardous the work might be. They are driven by psycho-social issues within the injured employee’s lives that lead to increased costs and ultimately increased workers’ compensation premiums. Take for instance two identical work related injuries such as a shoulder strain or lumbar strain. Assume all underlying physical circumstances are the same but the claim outcomes are completely opposite. One injured worker returns to work after seeing a doctor and receiving light duty job restrictions two days after the injury occurred. The other injured worker is off of work for eighteen months. The first claim cost $500 and the second claim cost $50,000! What’s the difference and why the disparity in outcomes? Eighty-five percent of the time, claim outcomes resemble the first injury/claim described. The other fifteen percent are the ones that we have to beware of and manage differently. They have underlying psycho-social issues that drive the claim outcome. Your workers’ compensation carrier should have the “tools” to find the “15%” that have ongoing life issues that will drive the cost of workers’ compensation claims. These tools involve very specific and state of the art injured worker interviews, proactive medical/injury management and proactive return to work practices. These life issues don’t make the injured worker a poor employee, they just happen to have a lot of other things going on in their lives and the injury has allowed them to “escape” for awhile to deal with them.
Lastly, we don’t hire or purchase the services of an attorney, accountant or doctor because the are the “least expensive.” You shouldn’t choose a workers’ compensation carrier that way either. There is a difference. A comparison of the insurance companies results is a good place to start. You need to evaluate how well they manage claims. This can be done by looking at their average cost per claim and their tail claim management. Both of these indicators can be measured and compared by looking at the insurance companies total claim dollars paid to total number of claims and open claims percentages by calendar year. This data is readily available through the National Association of Insurance Commissioners (NAIC). The lower the average claim cost, the better the insurance company manages premium dollars and claims costs. Open claim percentages directly effect insurance premiums as experience modification factors are adversely impacted by carriers with high percentages. The longer a claim stays open, the more money it will cost you in insurance premiums. Workers’ compensation insurance coverage or third party administration should be a value buy. Companies are very different with regard to services offered and claim outcomes. Choose the right insurance company that fits your corporate culture and one that fits your risk management style.
October 5th, 2009 at 10:21 am
Wow – a lot of helpful comments. Building a culture that rewards safety is key. All of us always want to know where the “cheese” is and those that dont think this way seem to change or move on. We had our work comp claims handler at our safety meeting with all 100 employees. Meeting people face-to-face seemed to build respect to the whole claims process. Our employees felt respected and I believe will have respect if they ever must go thru the claim process.
October 5th, 2009 at 2:32 pm
There are the employer (HR) and the insurance carrier/administrator and the medical care provider and the employee/injured worker. Each of these has to do his/her “job” in the process of actually dealing with a claim. The emphasis should be on the wellness of the employee and that the employer will do all it can to ensure the employee gets the needed treatment. The employee also needs to take responsibility for reporting the claim in the first place, for following the medical care provider’s instructions, for keeping appointments, etc. And the employee’s supervisor may need to be involved to enforce this. All of these can be a part of the safety training we do.
October 5th, 2009 at 4:13 pm
We have done a couple of things to reduce our costs. I work for a company that gives direct care to developmentally disabled adults, so most of our injuries are mostly sprains and strains from lifting and just daily care of our clients. Our primary care doctor for these types of injuries is a chiropractor. It has been our experience that a chiropractor will get an employee back to work 2 times faster, and they come back without using prescriptions which are often narcotic in nature.
The second step we have taken is to have an over-the-phone triage company, MedCor, assess our injured employees. This has cut our claims by over 50% in the past 3-5 years (our e-mod came down from over 3 to just over 1). https://www.medcor.com/home/home.asp
We also have a couple of light duty programs. One that is for injured workers that absolutely cannot do the job and the other for employees who are looking for a free ride, as they say. Like CG, these employees miraculously get better very quickly.
October 5th, 2009 at 6:12 pm
Even more basic, what this tells me is that because the managers didn’t understand what the term “light duty” meant, they couldn’t think with the subject. It is as basic as that with managers and employees – if there is terminology that people don’t understand, don’t be surprised if you get inaction in that arena.
October 23rd, 2009 at 1:29 pm
Tips for Saving on Workers Compensation Insurance in NY
by E-INSURE Services Inc. 7. September 2009 19:00
You can get over the sticker shock when looking for New York workers’ compensation quotes by understanding the high cost of not having coverage.
If you’re an employer in New York State, it pays to understand what the state considers to be an employee, because not knowing could be exceedingly costly. The New York State Workers’ Compensation Board takes two pages to define it, and you might be surprised to learn that it includes unpaid volunteers (even family members) and most subcontractors. The bottom line: a workers’ compensation law judge decides whether a person is considered an employee at a hearing following a work-related accident or illness. Unless you want to leave your assets up to a judge, it’s prudent to carry workers compensation insurance in NY. At bare minimum, check out the Board’s handbook.
Not having workers compensation insurance in NY is a criminal offense with fines and/or imprisonment.
An injured employee can bring civil suit. Plus you’re going to end up paying your defense attorney way more than anything you saved not having your New York workers comp coverage.
It gets worse. If an uninsured worker is injured and files a claim or brings civil suit, you could be subject to stop-work orders. You could also find your personal assets and other business assets exposed. Get a workers compensation quote, already!
If you have more than 15 employees, you’re subject to federally mandated Americans with Disabilities Act (ADA) anti-disability discrimination statutes. So you need to have an effective pre-employment job application process as part of a well-written workers’ compensation program. While you should be aware of any physical or mental limitations a prospect or employee has, you’re not allowed to as a prospect to divulge his or her medical history. You can ask about the prospect’s ability to do tasks specifically related to the job. Having a legally compliant employment application can help you avoid ADA suits and keep you from putting somebody in a job situation where he or she could get hurt or endanger others.
When looking for workers compensation insurance quotes in NY, it helps to understand the three criteria insurance companies use to establish your premiums. The first in the size of your payroll, evaluated in increments of $100. Secondly, each type of business is classified into different industry categories. Categories with higher risk exposure (a skyscraper window washer, for instance) will typically carry higher premiums than a business where everybody sits in a cubicle doing office work. The third criterion is your specific experience record against the number and severity of injuries incurred. You’re compared against other in your classification and the more accidents you’ve had in the past, the higher your experience modification rating.