Seven easy steps to reduce workers’ compensation costs now

How to Establish a Strong Safety Culture and Control Workers’ Compensation Costs

Workers’ compensation costs are typically the largest component of a contractor’s risk management program. It’s also the area contractors that have the greatest opportunity to reduce their overall costs by taking steps to mitigate risks and manage claims.

To start, here are five things that can have a positive impact on workers’ compensation costs:

1. Enhanced safety programs
2. Active claims management
3. Return to work programs
4. Employee wellness programs
5. Pre-employment testing and vetting

Considering widespread labor shortages and statistics showing new employees are at a far greater risk of injury, a well-planned and detailed new employee onboarding and training program is critical.

Here are seven steps to establishing a strong safety culture and controlling workers’ compensation costs:

1. Do the pre-employment prep work. This begins with pre-employment background, reference, and motor vehicle record checks, physicals or physical agility tests per job description, and pre-employment drug tests.
2. Have detailed job descriptions. Once all pre-employment vetting is complete, it’s important to have specific job descriptions that include physical requirements, detailed employment and safety manuals, as well as safe driving, use of company vehicles, and return to work policies.
3. Sign here and here and here. All manuals and policies should require employee signatures acknowledging they have read and are aware of job requirements, expectations, and what to do in specific situations. This includes accidents, injuries, and near misses. It’s a good practice to review these forms and obtain employee signatures on a yearly basis to help ensure everyone understands and acknowledges these policies and procedures.
4. Welcome new employees. Before new employees begin working in their assigned jobs, they should be welcomed, walked around your facility, and introduced to co-workers and key employees they will work with or rely on for support. Basic safety, task, equipment, and project-specific training and procedures should be reviewed and explained. Every project has unique hazards, risks, and procedures depending on the scope of work, owner, and contractor.
5. Ingrain good habits. Take the time to acclimate new employees to the jobsite, hazards, and safety procedures. Realize they’re new and learning. Repetition and review will help them retain information and ingrain good habits.
6. Encourage big brothers and sisters. Encourage veteran employees to help new hires feel comfortable and acclimated. Point out hazards, safety concerns, and keep an eye out for them during the day to help ensure they’re following safety policies and procedures. Jobsites are busy places with a lot of people and movement. Many companies now use different brightly colored hard hats or shirts to help identify new employees on jobsites and make it easier for other employees to watch out for them and help keep them safe.
7. Show underwriters that safety is a priority. In addition to protecting new and veteran employees through a strong safety and risk management program, your insurance broker can paint a positive picture for the insurance marketplace when pricing workers’ compensation coverage. Companies that provide employee handbooks, safety manuals, drug-free programs, pre-employment background, professional check requirements, return to work programs, as well as new employee training and onboarding procedures help show underwriters that safety is a priority.

New hires need to understand the seriousness of safety training. The importance of following policies and procedures from the very beginning and the consequences of failing to do so need to be clearly communicated. Explain how policies and procedures fit into the larger safety plan, outline safety goals, and explain the impact accidents and losses have on the company, employees, and future success of the organization.

Now you know how to reduce your workers’ compensation costs. Companies with a safe workplace culture and effective screening and onboarding processes tend to receive better pricing.

To get a detailed plan on how to reduce those costs, contact an MMA advisor. We’re happy to help!