5 Ways You Can Reduce Work Comp Costs

5 Ways You Can Reduce Work Comp Costs

Have you experienced an increase in your workers’ compensation costs over the last couple of years? How have you dealt with it? Many companies, when they experience an increase in work comp costs try to reduce work comp costs by having a safety meeting and reminding employees of safety procedures and policies.

But the key to a real reduction in both work comp injury costs and insurance premiums is doing more than just reminding employees to be safe. Having a strong, sound safety program that all team members follow can help reduce work-related accidents, injuries and illnesses as well as reduce work comp costs for any company.

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 by reducing injuries and illnesses, saving workers’ compensation dollars.

Building a Solid OSHA Program

You can create for your company a well-rounded safety program that produces a safe work environment, achieves OSHA compliance, reduces accidents and will ultimately reduce work comp costs by following these five steps.

  • Develop the programs required by the OSHA standards for your industry.
  • Integrate those programs into your company’s daily operations.
  • Investigate all injuries and illnesses, whether major or seemingly minor.
  • Develop safety competence in your employees through targeted training.
  • Audit your programs and your work areas on a regular basis to ensure compliance and 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 or poorly implemented OSHA programs: failure to keep walking and working surfaces clear may result in slips or trips, 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.

Involve supervisors to reduce work comp costs


Integrate Safety Programs into Your Daily Operations

Policies alone won’t get results; you must move your program from paper to practice to succeed. Putting a policy into practice requires a clearly communicating to all staff, providing necessary training and support and creating a culture that inspires and rewards people for doing their best.

When developing any new program, you need to focus on helping your frontline supervisors to succeed. Any new program—safety, quality or anything else—lives and dies with the frontline supervisor. If your frontline supervisor knows the program and its value, and wants to make it happen, the program succeeds; if not, the program will be a constant struggle and an endless drain on resources and energies. Involve your supervisors not only in carrying out the program, but also in planning and implementing it. They are a valuable resource for any safety program.

Integrating a solid OSHA program led by competent and motivated supervisors into the daily operation 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 they suffer in the course of their employment. This should not come as a surprise, but increasing numbers of claims drive up workers’ compensation costs. To reduce those costs, you must 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 merely record 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 discovers the root cause of the problem. Unless the root cause is discovered, recommendations for improvement will remain fruitless. Again, training is essential because a supervisor skilled in incident analysis is a better problem solver for all types of production-related issues, not just safety.

Investigate all accidents to learn what went wrong and why. You may think investigating every accident is over the top and only those that incur significant costs are worthy of scrutiny. However, big accidents often arise out of small safety issues. Investigating and correcting issues after minor accidents will help to prevent larger, more costly injuries and accidents. A fully effective safety program includes the investigation of every accident to improve both future accident prevention and safety practices.

If your emphasis is only on incidents that must be recorded on the OSHA 300 log, you will miss the biggest accident category: first-aid-only incidents. Many companies get upset about recordables or lost-time accidents because of the significant costs involved, but they don’t realize that the small cost and high number of first aid-only incidents will add up.

Statistics show that for every 100 accidents, 10 will be recordable and one a lost-time incident. If you investigate only the recordables or lost-time accidents, 89 go unnoticed and uninvestigated. Would you consider a quality program that allows an 89 percent failure rate successful? To reduce serious accidents, you need to reduce your overall accident rate, including first-aid-only incidents. That only happens when every incident is investigated to find the root cause, and identify and integrate remedial actions into the daily operation.

train staff to reduce work comp costs


Train Staff and Audit Your Workplace and Programs for Compliance & Improvement

Your 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.

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.


Tangible Benefits

  • Studies indicate there is a return on investment and that companies see direct bottom-line benefits with a properly designed, implemented and integrated safety program.
  • A competency-based safety program is compliant with OSHA requirements and therefore reduces the threat of OSHA fines.
  • A competency-based safety program lowers accidents, and fewer accidents lower workers’ compensation costs. When incidents do occur, a competency-based safety program fully evaluates the issue and finds the root cause to prevent reoccurrence and provides a workplace that is free from recognized hazards.
  • A safer workplace creates better morale and improves employee retention. Auditing keeps your programs fresh and effective and drives continuous improvement.
  • A competency-based program produces people who are fully engaged in every aspect of their job and are satisfied and fulfilled producing high-quality goods and services.


How Can We Help You Reduce Work Comp Costs?

At Roper Insurance & Financial Services, we are committed to helping you establish a strong safety program that minimizes your workers’ compensation exposures. Would you like to learn if your workers’ compensation premiums can be reduced and how you can do it? We offer a free insurance review, and we help our clients with OSHA compliance, safety program and accident investigation tools and resources.  Contact us today at (303) 721-1145 or by email at [email protected] for your complimentary workers’ compensation insurance review and let us help you reduce work comp costs.