More Than Reducing Costs

When a company experiences significant increases in workers’ compensation costs, it usually triggers internal activities to reduce insurance costs and spending.  The key to spending fewer dollars is more than just stopping a few accidents; it is having a sound safety program designed to continuously improve.

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

There are five steps your company can take to have a well-rounded safety program that encourages a safe work environment, is compliant with OSHA standards, reduces accidents, and ultimately reduces workers’ compensation costs.

1. Develop the various programs required by the OSHA standards.
2. Integrate those programs into the daily operations.
3. Investigate all injuries and illnesses.
4. Provide training to develop safety competence in all employees.
5. Audit your programs and your work area on a regular basis to stimulate continuous improvement.

Develop Programs Required by OSHA Standards

Aside from being a requirement for various industries, the OSHA standards offer a solution to reduce incidents.  Several accidents stem from underdeveloped or poorly implemented OSHA programs.

• Failure to keep high traffic and working surfaces clear may result in slips or trips.
• The lack of using personal protective equipment may result in lacerations.
• Poor lifting techniques can result in strains.

OSHA standards require a variation or type of written program to be developed and communicated to employees.  According to the National Safety Council, over 60% of CFOs reported that each $1 invested in injury prevention returned $2 or more, and over 40% said productivity was the greatest benefit of an effective workplace safety program.

Time and time again we see that companies with thoroughly developed OSHA-compliant programs have fewer accidents, more productive employees, and lower workers’ compensations costs.

Integrate Programs into Daily Operations

Successful safety programs focus on being proactive instead of reactive.  Accident investigations become an excellent source of information on already existing issues in the workplace, as well as potential problems.

Policies alone won’t get results; the program must move from paper to practice in order to succeed.  Putting a policy into practice requires a strategic plan. This plan must be clearly communicated to key participants and in a culture, that inspires and rewards people to do their best.

When developing any business initiative, there must be an emphasis on frontline supervisors and helping them succeed.  Every good business person knows with that any new program whether it be safety, quality or something of the like it must be second nature to the frontline supervisor. A solid OSHA program integrated into the daily operation and led by competent supervisors is just the beginning.  If the frontline supervisor knows the program and wants to make it happen, the program succeeds; if not, the program is a source of constant struggle and an endless drain on resources and energies.  Providing supervisors with knowledge and skills through continuous training is critical to the success of any program.

Investigate All Injuries and Illnesses

Workers’ compensation is designed to recompense employees for injuries or illnesses they suffer during 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 simply 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 are historical records only citing facts, while accident investigations go deeper to find the root cause so that improvements can be made.  Businesses that stop rising workers’ compensation costs have an effective accident investigation process that discovers the root cause of the problem so that corrective actions can be made.  Again, training proves beneficial because a supervisor skilled in incident analysis is a better problem solver for all types of production-related issues, not just safety.

All accidents should be investigated to find out what went wrong and why because each one of them is important and should be treated as such. Ask yourself this: If you only investigated serious quality concerns instead of every little deviation, would your quality program still be effective?  Companies with solid quality programs investigate and resolve every deviation from quality standards.

If your emphasis is only on those incidents that have to be recorded on the OSHA 300 log, you close your eyes to the biggest accident category: first aid-only incidents.  Many companies get upset about recordable or lost time accidents because of the significant costs involved, but they don’t realize that the small costs and the high numbers of first aid-only incidents add up.

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

Training and Auditing for Continuous Improvement

The 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 costs down.  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.