3 Steps to Lower Your Workers' Comp Costs
Workers’ Comp premiums may seem out of your control, especially if the rates are set by your State, however there are several things you can do to lower your premiums. Addressing your loss control, safety issues and OSHA training will all contribute to lower Workers’ Comp (WC) costs. Many of these processes are relatively simple to implement and will benefit your company in a variety of ways. It’s important to proactively focus on these areas, as in the long-run it will help you reduce your WC premiums.
One way to control your WC claims is to review your general loss control. There are three main areas you should focus on.
- Hiring Practices: Fortunately you can control your work environment and ensure it is safe however, it’s important to be sure that your employees are well-suited to their jobs. Unfit employees are more likely to be out on a WC claim sooner or later. Evaluate your hiring practices, and consider making a conditional offer of employment subject to a medical screening. This will help identify unfit applicants and those with pre-existing conditions.
- Corporate Culture: Don’t underestimate the importance of a positive corporate culture and its impact on your WC costs. If your employees feel misused and undervalued, then someone who may only have a minor injury will be less inclined to work through it. They may feel that they wouldn’t get any recognition for their extra effort to remain at work, and wouldn’t care that they were letting their team down. In this scenario the employee is more likely to submit a WC claim than one who feels needed and valued. While you may think you have a good company culture, it’s important to verify this and continually work to maintain a positive culture. (For more about company culture see Bill Darcey’s article "Culture vs Strategy, What's More Important?" in the Insights section of our website www.providerig.com).
- Report Claims Promptly: Promptly reporting injury claims is a very effective way to control your WC costs. Delaying claim reporting can delay medical treatment which can impact the cost of medical care, the time to recover/wage replacement and return-to work opportunities. (To read more about this refer to Patrick Darcey’s article "Controlling Your Workplace Costs", in the Insights section of our website.)
An additional way you can prevent WC claims is by addressing safety issues. These encompass a variety of areas, and while some procedures may seem obvious, don’t neglect any of these—and be sure to keep them up-to-date.
- It’s important to start by conducting a Workplace Safety Audit. While you may think your environment is safe, first take a close look around—what do you see? Are there simple general “housekeeping” issues you should be addressing? Do you have a Safety Manual, and is it up-to-date? Be sure it includes injury reporting instructions, emergency action plans, first aid and blood borne pathogen procedures.
- Establish a Safety Committee to implement and monitor procedures. Management can encourage employee participation in their safety program by including employees on the committee. Typical responsibilities include: workplace self-inspections, accident investigations, developing safe work practices, developing written safety programs and facilitating safety training.
In certain industries such as manufacturing, OSHA training is especially important. Be sure your employees are trained to OSHA standards and that they know the emergency procedures, i.e. if there’s a fire whether they should fight it or flee. Do you have a central meeting place in the event of an emergency, and is someone responsible for taking a headcount?
Surprise OSHA inspections do happen, and if you’re prepared you can reduce costly fines. In addition to the fines (which have continued to increase), you can avoid the negative impact on your reputation and brand that can result from an inspection with a negative report. Some of the precautions you can take to prepare for an OSHA inspection include implementing: machine guarding, lockout/tagout procedures, forklift training, machine danger zone identification, hazardous materials and hazard communication protocol, personal protective equipment requirements, and fall protection guidelines.
Implementing the procedures discussed above will enable you to take control of your WC costs, and ultimately lower your premiums. Acting proactively will benefit you, your employees and your bottom line.