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How to Strengthen Your Safety Program and Cut Workers Compensation Costs

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Controlling business costs is top-of-mind for organizations of all sizes and can take many forms, from moving the business to a less expensive building in a more economical part of town to cutting advertising costs. Many companies overlook one key way to control costs that can be easily implemented and managed while also improving work culture overall: implementing a safety program to better manage workers compensation costs. When the average workers compensation claim is around $40,000, taking steps to mitigate workers compensation risks and better manage claims can be a great opportunity for any business to both ensure the safety of its workers and protect the bottom line.

Risk professionals can help reduce costs by taking steps to implement any of the following:

  • Improved safety programs
  • More active involvement in claims management
  • Build out a return to work program

Encourage your internal teams to establish a well-planned and detailed new hire onboarding program that reinforces a strong safety culture. Here are some steps that you can integrate into your existing onboarding program that will also help control unnecessary or redundant workers’ compensation claim costs.

Practice Makes Perfect

Onboarding new employees means taking the time to acclimate them to how your business operates in terms of safety procedures, jobsite dos/don’ts, and any potential hazards. Repetition is key for any new employee learning the ropes, but especially for those workers who are jumping into a new role. Ensure all new hires have the appropriate time and space to practice any safety protocols and consider implementing a safety quiz at the end of a designated orientation period to test retention.

Use the Buddy System

Provide each new employee with a veteran employee buddy. This partnership aims to help the new employee get acclimated more quickly to the new environment. During their time together, the veteran employee can discuss safety concerns and identify potential hazards. As worksites can become overwhelming with the amount of hustle and bustle, it will be critical for the new employee to have a partner who is able to help keep an eye out for them and monitor their safety until they are ready to venture out on their own.

Cultivate a Culture of Safety

Encourage managers and team leaders to commit to safety goals and practice what they preach. Setting an example for employees early means that management must be “all in” on safety. This ensures that employees on all levels understand that safety is a company-wide priority. Building a foundation of safety-focused programs with the goal of keeping claim costs low will be key to solidifying each employee’s connection to the organization.

There are myriad ways to reduce workers’ compensation costs. What will be most important to your organization is taking into consideration the time and resources it will take to efficiently improve this area of your business. Whether your team decides to do this independently or with the help of a vendor like a PEO, it is essential for companies to prioritize this part of their business to reduce risk. 

Follow-Through Needed for Effective Safety Culture

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The concept of a culture of safety can be stalled by employers that say they want to be safer, but do little to implement real change.

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For example, a company hoping to understand the causes of fatigue, but won’t adjust its schedules, can set itself up for injuries and hazards.

A new report, Making a Safety Culture Truly Cultural, published by KPA, a risk management consultancy found that:

  • 90% of employers want to understand root causes of employees’ fatigue,
    but only 55% say they will adjust schedules or tasks.
  • 51% assign a night shift to an employee immediately before or after a day shift.
  • 60% that know rest is important lack a designated area for employees to do so.

“You may think a workplace fatality is unlikely, but put it into perspective,” the report says. “The Centers for Disease Control and Prevention estimate that a fatal injury could cost nearly $1 million. And the National Safety Council estimates the cost at $1.4 million. Also, factor-in the indirect costs of lost productivity, employee replacement, insurance and attorneys, and the cost jumps to $3 million on average.”

The study offers tips for employers trying to embed safety into their organizational DNA. It also explores how employers who invest time, funds and effort into reshaping their culture can save millions in structural and legal damages.

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The report puts safety under a microscope to discuss:

  • Its current state in U.S. workplace
  • Where it needs to change
  • How to create a new culture
  • Return on investment
  • How behavioral changes can be key to preventing injuries

The report features case reviews where employers were both proactive and reactive in their efforts to make their workplaces safer. Some were in conjunction with a 2015 OSHA initiative and included adding hands-free tools, re-engineering control systems and installing metal guards to prevent contact with moving machinery.

These actions caused small habit changes that contributed to the larger goal of creating a culture of safety, the report says. Even changing a bad habit such as slow reporting into prompt reporting has proven to reduce future injuries. Addressing one safety issue at a time rather than several concurrently, KPA contends, is the most effective sequence for reshaping a culture.

Habit loops and how cues within those loops translate into the workplace were also explored.

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“It’s hard to change habits, but we can fiddle around with the components of the habit loop,” KPA says. “When behaviors become good habits—part of our routine and organizational DNA—that is a clear sign of developing a true safety culture.”

The report is currently available to RIMS members. To download the report, visit the RIMS Risk Knowledge library at www.RIMS.org/RiskKnowledge. All downloads of this publication will be shared with the sponsor, KPA.

To learn about other RIMS publications, educational opportunities, conferences and resources, visit www.RIMS.org.