November 2009 - Healthy and Safe Workplaces

November 2009 - Healthy & Safe Workplaces

Workers Compensation Cost Reduction Practices

Workers compensation cost reduction initiatives

Types of programs used

Results achieved after implementing a focused cost reduction program

Trends and emerging issues

Controlling workers’ comp claims – starts with the hiring process

How to ask about health and safety practices in interviews

Reinforcing your organization’s safety practices

Tips to reduce stress in the workplace

Resources (links, books, articles, the lighter side)

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November 2009 – Healthy & Safe Workplaces include Good Workers Compensation Cost Reduction Practices

One of the items that gets some business people in an uproar is rising Workers’ Compensation costs. Sometimes business owners, executives and managers feel helpless in the face of rising costs, rising medical costs or rising accident and injury rates, at the same time that business revenue may be challenged.

There are many things that managers, executives, business owners and employees can do to help reduce their expenses and improve their workplace situation at the same time. Most of the tips we offer do not cost anything extra and can have great benefit for the business.

This month’s article discusses some of the ways that successful businesses and public agencies have helped to keep their costs down while providing healthier and more productive workplaces. For this month's article, we draw on a workers compensation training program that we developed in the early 1990’s in California when there was a deep recession, many layoffs, high unemployment, increasing workers’ compensation costs, increasing health care costs and much uncertainty in the economic climate — very similar to the situation in the world today.

Reducing accidents and injuries in the workplace has a direct result in reducing workers compensation costs through lower insurance premiums. It also keeps more people working productively and contributes to keeping costs lower for everyone.

We found in our research for the training program that companies who do the right things related to good safety and workers compensation practices, are also experiencing lower absentee rates, fewer sexual harassment complaints, fewer discrimination complaints, fewer employee grievances, less conflict between employees, less turnover, fewer customer complaints and therefore, better employee morale as well as greater profitability and financial success. This is still true today.

Workers compensation cost reduction initiatives

Some of the major workers compensation initiatives that are commonly mentioned include:

Types of Program:	Most Effective Cost-Control Initiatives ⁽¹⁾
	Effective	Too Early	Ineffective

Hiring / Employment Practices:

Pre-employment Screening	67%	19%	14%
Job / Task Analysis	63%	30%	7%

Training Programs:

Vocational Rehabilitation

58%

17%

25%

Health / Safety Standards:

Safety Programs

82%

12%

Legal Positioning:

Litigation Management

84%

Health Care / Claims Management for Workers' Comp:

Medical Clinic / Network Program (HMO's, PPO's, etc)	57%	26%	17%
Negotiated Rates with Providers	53%	33%	14%
Fee Schedule Compliance	85%	11%	4%
Return to Work / Modified Duty Program	78%	11%	11%
Pre-Certification of Hospital Admissions	74%	14%	12%
Review of Physician Practice Patterns	71%	19%	10%
Medical Bill Audits	80%	11%	9%
Utilization Review	69%	18%	13%
Coordination of Workers’ Compensation with Group Health Plan	87%	7%	6%
Claims Administration Audits	83%	9%	8%

Organizational Structure / Corporate Culture:

Cost Control Incentive Program	70%	22%	8%
Use of Case Managers	72%	15%	13%

(1) Based on responses of companies who have taken the initiatives. Source: Responding to the workers compensation Crisis, Tillinghast / Towers Perrin (1991)

To see a graphic chart of the above information, go to http://www.isunetwork.com/isuis/isuis_svcs_cost_control_inits_graph.aspx. Note: even though this information is several years old, the principles are still valid today.

A more detailed checklist in PDF format can be downloaded so you can see how your company compares.

Types of programs used

When we created our workers compensation Cost Reduction training program, we surveyed local companies who were actively working to manage their costs. The types of programs they used are shown below:

Types of Programs Used ⁽²⁾	Company Surveyed
	#1	#2	#3	#4	#5	#6	#7	#8	#9	#10
Policy Statement / Management Support				x	x			x	x	x
Proactive Accident Prevention Program	x	x		x	x	x		x	x	x
Changes in Hiring Policies					x				x
New Employee Orientation Program			x						x	x
Supervisory Training			x			x		x	x	x
Written Employee Training Program			x						x
Safety Training Program	x	x	x						x	x
Safety Incentive Program		x								x
Safety Committee Program		x						x	x	x
Improved Medical Clinic Program				x				x	x	x
First Aid Program	x							x	x	x
Return to Work / Modified Duty Program				x					x	x
Improved Legal Services Program							x		x
Improved Insurance (or Claims) Management								x	x	x
Proactive Stress Identification Program									x
Management / Supervisory Accountability Program			x	x		x		x	x	x
Management / Supervisory Incentive Program										x
Management / Employee Communications Program				x	x	x			x	x
Improved Information Systems Program	x	x				x		x	x	x
Improved Paper Files / Record-Keeping Program	x	x						x	x	x
Improved Safety Equipment			x
Family Physical Fitness Incentive Program			x
On-site Physical Fitness Training			x

(2) Source: Telephone survey of companies actively working to reduce workers’ compensation costs, September 1992 by the California Health and Safety Council.

Results achieved after implementing a focused cost reduction program

Comments from people interviewed included these results:

Costs have dropped dramatically.
Now close 70% of cases before they become "claim files."
Cost savings — reduced 62% in annual insurance premiums; injuries down 8% in last 2 years.
In the first year, injuries went down 61%.
Auditors didn't believe it at first, the change was so large.
Since 1989, injuries are down 82%.
Last year, had $484,000 in losses. This year, have $154,000 in losses (losses down 68%).
Number of injuries are the same, but injuries are much less severe.
In the past year, the number of injuries is the same, but lost time went from 100 days to 20 days.
Back injuries down significantly.
Number of injuries down and the frequency of injuries down.
Number of employee injuries down 75% this year.
Only 1 workers compensation claim in last 4 years.

Trends and emerging issues:

Comments from people interviewed included what they are seeing as emerging or potential new issues:

Stress claims are increasing (up double or triple).
Stress claims are very expensive — not sure how to deal with this yet.
Seeing more repetitive trauma injuries, particularly in long-term employees.
Costs up for temporary workers.
Last year, our rate was .80; now it’s .92 (6-7 new stress claims from termination / reprimand situations).
No change in employee injury rate. Guest incidents have doubled in last year.
Have engaged a specialized law firm to assist with fraudulent claims.
Seeing more people staying home when they could return to work.
Seeing more stress related to layoffs.
Seeing more anger at the "system."
Seeing more suspected fraud cases, particularly from people formerly injured.
Some managers are reluctant to change old habits and to think pro-actively.
Paying more attention to ergonomics.
Being very careful about how layoffs are handled (offering more services).

Controlling workers comp claims – starts with the hiring process

Paying attention to who you hire is very important for many reasons, including safety and future workers’ compensation considerations.

Recruiting, screening and hiring employees who will add value to the company is the greatest challenge a company ever faces. When a replacement employee is needed or a new position is opened, there is often strong pressure to shorten the interview process by hiring someone as quickly as possible. Recruiting and interviewing add extra work for existing staff members. Management must take time out of their already busy schedules. If the process involves many applicants, pressure mounts to shortcut the process.

It cannot be emphasized too strongly — hiring the wrong employee is a far more serious problem than finding employees who can do the work required and fit into the corporate culture of the company.

All the documented work experience in the world will not overcome an attitude that does not fit with co-workers. All the education in the world will not overcome the inability to think creatively or to adjust appropriately to a particular company. The wrong employee will cost you far more over the long run than doing what is needed to find the right employee.

Corporate culture matched with an employee’s personality, work experience and education are critical. When comparing two applicants (with similar work background in different corporate cultures), the one that works best in a corporate culture similar to yours is the better choice. Notice "works best" — this means the employee feels comfortable and is more productive in one type of culture rather than another. Be careful about hiring someone into a large company who works best in a small company, and vice versa. This could be setting up a losing situation.

To re-enforce the importance of employees thinking pro-actively and with safety prevention in mind, these topics need to be stressed as very important in the interview process. Health and safety is an attitude that must be included in the hiring process. Only those applicants who express the desired attitude and behavior should be considered.

How to ask about health and safety practices in interviews:

Ask about how much prior training and / or knowledge the applicant has in on-the- job safety practices and requirements, workers’ compensation issues, good health care procedures and other federal / state laws.

The goal of questions is to learn:

How an employee views their responsibilities toward the overall company/corporate effort to maintain a safe and healthy workplace.
How much specific safety training they’ve had. This is particularly important for jobs that have high accident / injury rates (watch out for people who don't respect safety training or think they can do anything without training).
How much the applicant knows about workers’ comp laws, regulations and requirements (watch for applicants who would not normally be experts in this area).
Watch for minimal or inaccurate knowledge of these requirements for applicants who should be expected to remain current on these topics.

Reinforcing your organization’s safety practices:

What is required of you — the management of the company:

Management commitment and assignment of responsibilities.
Safety communications systems for all employees.
System for assuring employee compliance with safe work practices.
Scheduled inspections, monitoring and evaluation system.
Accident investigation format and procedures.
Procedure that is used regularly for correcting unsafe or unhealthy conditions.
On-going safety and health training and instruction of all employees.

All Managers and Line Supervisors need to be trained to know (and consistently model) the following:

Line Supervisors are the key figures in the implementation and success of the health and safety program.
Managers/supervisors must understand and support the reasons for establishing and maintaining safe and healthful working conditions.
Managers/supervisors must understand the hazards associated with each job and know how to recognize them. They must be trained and tested on whatever equipment that their employee is operating and have working knowledge of any chemical or dangerous equipment their employee may be using.
Managers/supervisors must understand and know how to communicate properly with the line employees. Make sure the line supervisor practices proper safety techniques and procedures, knows the danger signs of stress and who to direct troubled employees to for guidance.
Managers/supervisors must encourage employees to report any and all accidents, injuries or potential dangers immediately. Reporting small safety issues helps get them corrected before someone is seriously hurt.
Managers/supervisors should be well trained in handling discipline, reprimand or layoff situations to avoid making an uncomfortable situation turn into a stress claim, wrongful termination or other potentially costly legal event. If they are not trained, someone who is trained should handle the situation. Be sure to consult with your Human Resources and/or Legal staff before entering into such a situation.
The best companies actively support good safety practices through regular training of all employees and managers, regular communications with employees, keeping employees up-to-date on safety hazards found or reported, posting safety committee meeting notes, rewarding safe practices, listening to employee concerns, talking about safety at daily meetings and keeping workplace safety as a constant focus in the organization.

Tips to reduce stress in the workplace

One major contributor to accidents and injuries in the workplace is stress. In our current economic climate, general stress can add to the ordinary day-to-day stresses of any job. Management can provide invaluable assistance to employees (and themselves) by setting effective stress management techniques. Some of the vital ways to do this are:

Set realistic goals and priorities: Encourage employees to be part of the priority-setting process. When they feel they are part of the decision, they are more likely to take responsibility, rather than grumble about "my nasty boss" or "this terrible place."

Encourage good time-management techniques: Planning for important activities, scheduling them in advance, following up with others, and keeping good records help people get things accomplished on time and realize their value. Take time to make note of successes and projects accomplished.
Take short breaks: After a particularly stressful event, encourage employees to take a 5-minute walk around the block or a few minutes of quiet time to re-balance their energies. Several short breaks throughout the day can keep employees working at peak performance.

Rehearse and prepare: Being prepared reduces stress. Be prepared in advance of stressful situations for all possible outcomes.
Don’t procrastinate: Procrastination and delay breeds stress! Eliminate items which won’t or can’t get done and do those that are important first.
Know your limits: Be realistic about what you can or cannot accomplish.

Change your attitudes: Think of stressful situations as a challenge to your creative thinking. Know that eventually everything will either get done or it won’t — worrying won’t make it better.

Learn to say "no": When your schedule is full, say "no" to activities you don’t enjoy, to unrealistic demands or to responsibilities that aren’t yours. Doing this with tact and diplomacy takes some practice and may require special training.

Schedule your stress: Stagger known stressful activities and prepare for known stress in advance.

Encourage employees to treat their body right: Eat a balanced diet, get enough sleep, exercise regularly. Companies that encourage employees to take a "fruit break" or 5-minute walk find the employees will work more effectively than if they are "hyped" by cigarette/coffee breaks and little physical exercise in their jobs.

Encourage positive self-talk: Use positive self-reinforcement affirmations, like "I can handle this one step at a time" and "Somehow the whole team will work this out."

Give positive reinforcement: Make sure that all managers and supervisors tell people when they do a good job, complement them on their neat offices or conscientious work habits. Set up employee recognition programs - "Employee of the Month" or "Creative Suggestion" systems encourage people to do a good job. Everyone needs a pat on the back and a sense of being a valuable person. Constant criticism is counter-productive and causes hard feelings. A daily positive comment goes a long way, at no cost!

Take responsibility: Encourage employees to take responsibility for their own job and for their contribution to the success of the company as a whole. This encourages a feeling of control over their life. Let them know how important their efforts are to the overall plan.

Provide a sympathetic ear: Often stressful situations can be managed, if there is someone who is willing to listen to the employee’s concerns and provide positive encouragement that they will get through the problem. For many people, 15 minutes of a sympathetic listener can cancel out many days of otherwise unproductive worry.
Pay attention to ergonomics: With the greater use of computers in many workplaces, ergonomics is an important safety tool. Employees should be taught how to sit property, when to take breaks if they use a computer for long periods, how to adjust their chair, desk, workstation, computer, mouse, etc. so that it allows their body to work in a good posture. Attention to this safety aspect can help companies and their employees tremendously.

Workplace safety activities can be fun as well by having friendly competitions to see who can record the most steps taken each week or who can find the most safety hazards to report.

Most important, MAINTAIN A SENSE OF HUMOR: As a wise philosopher said, "Don’t take life so seriously, it’s only a hobby." Try to remember what was stressful in your life six months ago or a year ago. Chances are, you can’t. Know that this day will be just another day in history and whatever seems traumatic will fade into oblivion as time passes. Laughter is the medicine of the gods and great medicine for humans, too!

Internet Resources

Detailed checklist in PDF format - see how your company compares.
Graphic of workers compensation cost reduction programs http://www.isunetwork.com/isuis/isuis_svcs_cost_control_inits_graph.aspx
H1N1 Flu Resources for Businesses and Employers http://www.cdc.gov/h1n1flu/business/
Employee Risk Management: Reduce Your Workers' Compensation Costs http://www.allbusiness.com/finance/business-insurance-workers-compensation/3779084-1.html
Controlling workers' comp costs http://www.buyerzone.com/business_insurance/workers_comp/rbib-controlling-costs.html
6 Ideas for Curbing Workers' Comp Costs http://news.thomasnet.com/IMT/archives/2009/06/6-ideas-for-containing-workers-compensation-costs.html
AUSTRALIA Part-time Retail Workers Have Twice As Many Injuries as Full-Time Workers http://blog.reduceyourworkerscomp.com/
How Can You Control Workers' Compensation Costs? http://www.allbusiness.com/human-resources/benefits-insurance-workers-compensation/825-1.html
How to Reduce Workers’ Compensation Costs http://www.cepro.com/article/how_to_reduce_workers_compensation_costs/
Tips: Employee Health http://www.allbusiness.com/10778-1.html
Centralize Workers' Compensation Cost Containment
Managing and Reducing Your Costs > Ways To Cut Costs
Access to Specialists May Reduce Workers' Compensation Costs http://ehstoday.com/news/ehs_imp_34644/
Getting Medical Expertise is a Key to Success http://www.workerscompensation.com/compnewsnetwork/blogwire/how_to_reduce_workers_comp.html
Workers Compensation Cost http://www.onlinelawyersource.com/workers-compensation/cost/
Obesity Increases Workers' Compensation Costs http://www.medicalnewstoday.com/articles/68795.php
Using Your EAP to Reduce Workers’ Compensation Costs http://www.dalegroup.com/news/post.aspx?id=5
Learn what the best strategy for reducing workers’ compensation costs is. http://www.infobarrel.com/The_Best_Strategy_for_Reducing_Workers_Compensation_Costs
Reduce Workers Compensation Premiums and Increase Employee Benefits http://ezinearticles.com/?id=32700
Lowering Workers' Compensation Premiums http://businessinsure.about.com/od/workerscompensation/a/wcpremiums.htm
Guide to Workers' Compensation Insurance (Canada) http://sbinfocanada.about.com/cs/insurance/a/workercomp.htm
Workers' Compensation Eligibility and Benefits http://jobsearchtech.about.com/od/laborlaws/l/aa100101.htm
How Does Workers' Compensation Operate in My State? http://businessinsure.about.com/od/workerscompensation/f/workcompfaq.htm
Workers' Compensation Discount for Drug-Free Workplace http://businessinsure.about.com/od/workerscompensation/a/wcdiscdf.htm
Reduce Workers’ Compensation Costs With CompScore Metrics http://www.achrnews.com/Articles/Business_Management/BNP_GUID_9-5-2006_A_10000000000000122875
Reducing Workers' Compensation Costs http://www.georgiawcsolutions.com/insurance-101/reducing_workers_compensation_costs.htm
Safety & Health Basics for Small Businesses http://www.lni.wa.gov/safety/basics/smallbusiness/default.asp
Injury Fact Sheets - Seven Common Injuries http://www.lni.wa.gov/Safety/Topics/AtoZ/InjuryFS/default.asp
Workers Compensation Frequently Asked Questions http://www.dir.ca.gov/dwc/faqs.html
One hour training presentations http://www.ohiobwc.com/employer/programs/safety/SandHTrain.asp
Commission on Health and Safety and Workers' Compensation lists agencies (US states, national, international, private) http://www.dir.ca.gov/chswc/SafetyPage.htm

Books - Disclosure: We get a small commission for purchases made via links to Amazon.

Workplace Safety: A Guide for Small and Midsized Companies. Dan Hopwood, Steve Thompson. Wiley, 2006. ISBN-10: 0782136044 ISBN-13: 978-0782136043
The Practical Safety Guide To Zero Harm: How to Effectively Manage Safety in the Workplace. Wayne G. Herbertson. Value Organization Pty Ltd, 2008 ISBN-10: 0980530210 ISBN-13: 978-0980530216
A Passion for Excellence: The Leadership Difference, Tom Peters and Nancy Austin, Random House, New York, Original 1985 (a classic); Warner Books; Reissue edition (January 1989) ISBN: 0446386391
BreakAway Thinking: How to Challenge Your Business Assumptions (and why you should), Ian Mitroff, (Pogo: "we have met the enemy, and he is us") John Wiley & Sons; (June 1988) ASIN: 0471602027
In Search of Excellence, Tom Peters and Robert Waterman Warner Books; Reissue edition (August 1988) ISBN: 0446385077 (this book made Tom Peters a household word)
Teaching the Elephant to Dance: Empowering Change in Your Organization, James Belasco. Plume; Reissue edition (July 1991) ISBN: 0452266297 (there may be hope !)
The Leadership Challenge: How to Get Extraordinary Things Done in Organizations, James Kouzes, Barry Posner. Jossey-Bass, 2008) ISBN-10: 0787984922 ISBN-13: 978-0787984922
The Tao of Management, Bob Messing, Humanics Limited, Atlantic GA, 1989 (wonderful short insights and words to ponder) ISBN: 0893341118
Thriving on Chaos: Handbook for a Management Revolution, Tom Peters. HarperCollins (paper); Reprint edition (September 1991) ISBN: 0060971843 (the great one continues his effort to help us make sense of the business world)
Zapp: The Lightning of Empowerment: How to Improve Productivity, Quality, and Employee Satisfaction, William Byham, Jeff Cox. Fawcett Books; Revised edition (February 1998) ISBN: 0449002829
The Power Path: The Shaman's Way to Success in Business and Life. José Stevens. New World Library; 1st edition (June 15, 2002) ISBN: 1577312171
Income Without a Job: Living Well Without a Paycheck. Michael Jay Anthony, Barbara J. Taylor. Lulu.com, 2008 ISBN-13: 978-0-557-00377-8. Website: www.income-without-a-job.com. Tap into your own creativity and use your full potential. Learn how to see opportunities that others miss.

Articles

The Lighter Side

Workplace Humor: How To Reduce Stress With Inoffensive Office Humor http://stress.about.com/od/workplacestress/a/officehumor.htm
Humor Rx for Alleviating Stress in the 21st Century http://www.larrywilde.com/rxstress.htm

Humor Stress Relief in the Workplace http://stress.lovetoknow.com/Humor_Stress_Relief_in_the_Workplace

Humor, Inspiration, Self Help, People Understanding http://humanresources.about.com/od/humorinspiration/Humor_Inspiration_Self_Help_People_Understanding.htm

Using humor to deal with workplace stress http://www.management-issues.com/2006/5/25/opinion/using-humor-to-deal-with-workplace-stress.asp

About our resource links: We do not endorse or agree with all the beliefs in these links. We do keep an open mind about different viewpoints and respect the ability of our readers to decide for themselves what is useful.

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