Five tactics for an effective workers compensation strategy

This article was originally published in The Standard.

The war for talent wages on. It continues to be a difficult time to hire qualified employees, forcing more and more businesses to consider different ways to adapt, including the possibility of smaller, less skilled, and/or over-burdened workforces. At first, it may make sense to hire a less qualified employee to fill a gap, but these types of hires could increase the risks of on-the-job injuries, and in some cases, jeopardize the ongoing well-being of the business. To mitigate the risk of on-the-job injuries, business owners should proactively refine and manage their workers compensation programs to reduce losses, thus keeping their workers safe and protecting their business interests.

Some businesses are taking the time to ensure employee risks are limited, but the severity potential exists. In addition to physical injuries impacting workforces, businesses are seeing “mental injuries” that are more prevalent among today’s workforce. Many states are now including these injuries as eligible for coverage, which is a good reminder for businesses to understand the laws within their regions.

All of these factors lead to a change in the status quo when it comes to workers compensation programs. Successfully managing a workers compensation program requires the business, independent insurance agent and the insurance carrier to work in sync to promote workplace safety, claims excellence, loss control expertise and policy accuracy. To survive — and even thrive — during uncertain economic environments, businesses should strive to be flexible and willing to maintain their best practices for the safety of the workforce.

A combination of human resources expertise and loss control support is imperative. Policies, procedures, job descriptions and a safety-first culture will promote business success. These measures are also the best safeguard for a disciplined and compliant hiring process, which will help ensure that businesses hire and retain the best workers for their specific needs. Having the right employees on staff will help offset and combat risks in any environment.

Here are some other tactics businesses can implement to promote success:

1. Leverage technology to stay ahead of risk

There are now new ways to prevent worker injury by better assessing and addressing risks before they result in injury. For example, the use of artificial intelligence to evaluate how a workers movement may be risky and provide insight into how the organization can help address this by adjusting a person’s movement or approach. These slight adjustments in movement can reduce the risk of employee injury and end up saving the company money. In addition, wearable sensors can help pinpoint certain repetitive motions or material handling issues that increase risk exposure.

2. Enforce a well-documented new hire training protocol and onboarding process

Businesses need to remain consistent with documented training approaches for new employees. Resist the pressure to just get someone started in a position to maintain production or services and focus on training. A component of this training should be focused on worker injury, which can be offered as a component of the customer’s workers comp program.

3. Leverage services that can help get employees the right level of care, if a claim occurs

This can range from leveraging a third-party service to having an in-house clinic or nurse on staff to help provide expert advice at the time of injury. Some insurance programs will offer a complimentary service that will provide on-call nurse triage at the time of injury and be able to direct employees to the next best course of action when injured. Businesses should take advantage of these types of carrier offerings to help ensure the right level of care when an injury occurs.

4. Understand claim frequency and severity

Look for opportunities to have claim review meetings to monitor and manage workers compensation claims. Encourage businesses to report new claims quickly and work to understand how better triaging claims during the first report process can change the costs of outcomes. Use these interactions to help identify potential trends in workers compensation claim fraud.

5. Use risk management services

Manage the potential for the loss rather than the actual loss. Business owners must look beyond a claim’s direct cost and understand mitigation strategies and the cost of containing or preventing a loss. Safety policies and standards promote a “safety culture” and opportunities for employees to be educated about sound workplace behaviors. Simply reacting to hazards and accidents is not a long-term answer. Businesses will maximize their opportunities to protect their human capital and reduce claims when they anticipate and plan.

There is no doubt that the foundational structure and strength of a business’s safety culture can help minimize all hazards. Businesses that take a proactive approach will experience a difference in risk mitigation when they have formal programs and policies in place. An insurance carrier can play a pivotal role in assisting organizations to build a plan of action for their workers compensation program.

A robust workers compensation program is a basic tenet to any successful risk management effort, and the resulting safe work environment will allow for the continuation of the only truly sustainable competitive advantage — its employees.


Matt Mitchell


About the author

Matt Mitchell is president, middle market, at The Hanover.