By Howard Massey, Leavitt Group
Would you like to reduce the number and severity of workers compensation claims? Look no further than your human resources department. Some of the best proactive strategies for keeping your work comp expenses down are directly related to your interviewing and hiring process, reference checks, attitude surveys, proper mediation of employee complaints, and, though it sounds unlikely, pleasant terminations.
Unfortunately, we frequently hire our own work comp claims—we bring someone on board without a safety mindset and who has a history of incidents.
Proper interviewing techniques and hiring procedures can help. It just makes sense: a major key to a successful employee safety program begins with the kind of employee you hire. You want individuals who will work safely and who share the positive values and attitudes of your company.
One of the most important steps in selecting employees is reference checking. Really good employees have really good references. You could significantly improve the overall quality of people you hire by always checking references.
When reference checking, try listening for what the employer is NOT telling you. If the reference doesn’t brag about how good the employee was, or is evasive with responses, this may be a red flag. Former employers usually go out of their way to compliment good employees.
You should also verify the dates of employment on the job application. Some of the most serious work comp claims come from individuals who have a track record of going from job to job filing claims.
Once you have the right employee, good morale is a significant deterrent to work comp claims. A major problem we face today is the increased frequency of employees who, after an issue with management, file a work comp claim. We have seen claim after claim filed because schedules were cut, employees were written up, or managers were unkind.
You can correct these problems before they occur with a few simple strategies. First, consider implementing a confidential “Attitude Survey.” This gauges your overall employee morale, shows your employees that management cares, and can alert you to problems within your management team—allowing you to head off potential cases of employees who quit and then file retaliatory claims. We recommend the survey be administered every six months.
Another strategy is to promote open communication throughout all levels of management. The following very real example is certainly not unique:
A seven-unit restaurant franchisee had four claims filed with an average cost/reserve of $42,000 per each claim over a three-year period. Upon investigating the claims, all three were filed out of frustration by the employees.
In one case, the frustration was caused by not getting promised time off. In another case, the discontent stemmed from problems with the manager’s dictatorial style. In yet another case, the employee was hurt, but because of the way they were treated, they got an attorney. In all of these incidents, the owner’s approach was to tell the employee to work it out with their manager rather than getting personally involved.
If employees cannot speak with management to resolve an issue, they will go to a third party (e.g. attorney).
In our example, the owner of the company met with all of the managers and employees in all seven locations. The owner instituted an open-door policy and became the pressure release valve to handle disputes. In three-and-a-half years, this same company reported zero litigated claims, and onlya two minor first aid claims. These positive results are due to the owner giving the employees an avenue to voice their frustration with action taking place to address their situation. This policy has effectively worked for a number of companies.
How does an employer keep that same morale during a termination? While it sounds almost counterintuitive to create a positive termination experience, that should be the goal. Amicably parting ways dramatically reduces the chances of a disgruntled employee filing a bogus work comp claim—in fact, if the employee is really not a fit for your company, then it is usually is in the best interest of the employer AND the employee to help them transition out. They may even thank you for it.
Terminations should never be a surprise. Regular communication about performance issues or concerns is critical. Think of ways you can help convince them that you do care about them and that they would be happier doing something else. Remember that if you fire someone in anger, they are likely to respond in the same way.
When your managers and HR personnel understand the impact of these strategies and begin to implement them, you will see quality employees hired, high morale, and lower work comp claims.
Contact your Leavitt Group advisor to learn more about supply chain insurance and to determine if this coverage is right for your needs.
The coverages discussed herein are for illustrative purposes only. The terms and conditions of your specific policy may differ from those described. Please consult the provisions of your policy for the terms, conditions, and exclusions that apply to your coverage.