5 Steps to Reducing Workers' Compensation Costs - WA Insurance ...

By Garry Watts, CPCU, CRM

When a company experiences significant increases in workers? compensation costs, it usually triggers internal activities aimed at reducing insurance costs and spending. The key to spending fewer dollars is more than just stopping a few accidents; it is having a sound safety program designed to continuously improve. This is where a safety program that, at a minimum, is compliant with the Occupational Safety and Health Administration (OSHA) standards can yield significant savings for ?by reducing injuries and illnesses, saving workers? compensation dollars.

Building a Solid OSHA Program

There are five entry-level steps? can take to have a well-rounded safety program that produces a safe work environment, achieves OSHA compliance, reduces accidents and ultimately reduces workers? compensation costs.

1.???? Develop the various programs required by the OSHA standards.
2.???? Integrate those programs into the daily operations.
3.???? Investigate all injuries and illnesses.
4.???? Provide training to develop safety competence in all employees.
5.???? Audit your programs and your work areas on a regular basis to stimulate continuous improvement.

Develop Programs Required by OSHA Standards

Aside from being a requirement for general industry, the OSHA standards provide a good pathway to incident reductions. A good number of accidents stem from poorly developed, trained or implemented OSHA programs: slips or trips may come from poor housekeeping efforts or not keeping walking and working surfaces clear, not using personal protective equipment may result in excessive lacerations, and poor lifting techniques can result in strains.

Many of the OSHA standards require some type of written program be developed and then communicated to employees. Experience shows that companies with thoroughly developed OSHA-compliant programs have fewer accidents, more productive employees and lower workers? compensation costs.

Integrate Programs into Daily Operations

Policies alone won?t get results; the program must move from paper to practice to succeed. Putting a policy into practice requires a strategic plan clearly communicated to key participants, good execution of that plan based on developed competencies, and a culture that inspires and rewards people to do their best.

When developing any business initiative, there must be an emphasis on frontline supervisors and helping them succeed. Every good business person knows that any new program - safety, quality or anything else - lives and dies with the frontline supervisor. If the frontline supervisor knows the program and wants to make it happen, the program succeeds; if not, the program is a source of constant struggle, and an endless drain on resources and energies. Providing supervisors with knowledge and skills through training is critical to the success of any program.?

A solid OSHA program, integrated into the daily operation and led by competent supervisors is just the beginning. Successful safety programs focus on being proactive instead of always reacting to issues. Accident investigations provide an excellent source of information on real or potential issues present in the workplace.

Investigate All Injuries and Illnesses

Workers? compensation is designed to recompense employees for injuries or illnesses that arise from or out of the course of employment. This should not come as a surprise, but increasing claims drive up workers? compensation costs. To reduce those costs, you must simply reduce your accidents. And the ability to reduce accidents is significantly enhanced when those accidents are fully investigated instead of simply being reported.

Accident reports are historical records only citing facts, while accident investigations go deeper to find the root cause and make improvements. Businesses that stop rising workers? compensation costs have an effective accident investigation process that flushes out the root cause of the problem. Unless the root cause is discovered, recommendations for improvement will remain fruitless. Again, training proves beneficial because a supervisor skilled in incident analysis is a better problem solver for all types of production-related issues, not just safety.

All accidents should be investigated to find out what went wrong and why. Some may suggest investigating every accident is a bit over the top and only those that incur significant costs are worthy of scrutiny. But ask yourself this question: If you only investigated serious quality concerns instead of every little deviation, would your quality program still be effective? Companies with solid quality programs investigate and resolve every deviation from quality standards.

Training and Auditing for Continuous Improvement

The final steps focus on training and auditing your program for continuous improvement. Training plays a significant role in safety and in reducing workers? compensation costs. The goal of training is to develop competent people who have the knowledge, skill and understanding to perform assigned job responsibilities. Competence, more than anything else, will improve all aspects of your business and drive down costs. Supervisors must have the knowledge and ability to integrate every safety program into their specific areas of responsibility. Every employee must know what is expected of them when it comes to implementing safe work procedures. Once the programs are developed and implemented, they must be reviewed on a regular basis to make sure they are still relevant and effective.

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This might require a significant change in how you manage your safety program, but if your workers? compensation rates are high, it may be time to make this leap.

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Posted Wednesday, May 30 2012 9:15 AM
Tags : Workers' Compensation

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