Worker’s Compensation Insights

Five Strategies for Reducing Worker’s Compensation Costs

Companies that are committed to reducing worker’s compensation costs should place strong emphasis on developing a comprehensive safety program that’s compliant with Occupational Safety and Health Administration (OSHA) standards. This type of program can yield significant cost savings and – more importantly – help minimize workplace injuries and illnesses.

Building a Solid OSHA Program 

There are five basic strategies that will help you develop a well-rounded safety program capable of achieving OSHA compliance while reducing accidents and ultimately lowering your workers’ compensation costs.

1) Develop Programs Required by OSHA Standards

Aside from being a requirement for general industry, OSHA standards provide a good pathway to accident/incident reductions. A good number of accidents stem from poorly developed or poorly implemented OSHA programs. For example, 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 back strains. 

Many of the OSHA standards require the development of a written program that is communicated to employees. Experience shows that companies with thoroughly developed OSHA-compliant programs have fewer accidents, more productive employees and lower workers’ compensation costs.

2) Integrate Those Programs into Daily Operations

Policies alone won’t get results. A safety program must move from paper to practice in order to succeed. This 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. 

3) Investigate All Injuries and Illnesses

The key to reducing worker’s compensation costs is simple: reduce accidents. Your ability to accomplish this is significantly enhanced when accidents are fully investigated. This will provide an excellent source of information on real or potential issues present in the workplace. 

Statistics show that for every 100 accidents, 10 will be recorded and one will be listed as a lost-time incident. If you investigate only recorded accidents and lost time incidents, 89 will go unnoticed. Would you consider a quality program that allows an 89% failure rate successful? Reducing serious accidents means you must reduce your overall rate of all accidents –including first-aid-only incidents. This only happens when every accident/incident is fully investigated to find the root cause. From this point, remedial actions can be identified and integrated into your daily operation.

4) Provide Training to Develop Safety Competence In All Employees

Training plays a significant role in safety and in reducing workers’ compensation costs. The goal of training is to develop a competent workforce that has 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. 

5) Audit Your Programs on a Regular Basis to Stimulate Continuous Improvement

Supervisors must have the knowledge and ability to integrate every safety program into their specific areas of responsibility. Additionally, employees 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’re still relevant and effective.

These strategies 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 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 safer workplace creates better morale and improves employee retention. Auditing keeps your programs fresh and effective while driving continuous improvement.
• A competency-based program produces workers that are fully engaged in every aspect of their job and are satisfied and fulfilled, producing high-quality goods and services.

VTC Insurance Group is Here to Help

Our worker’s compensation experts are committed to helping you establish a strong safety program that minimizes your workers’ compensation exposures. To learn more, give us a call at 248.828.3377 or visit vtcins.com.

This blog is for informational purposes only and is not intended as legal advice.