Controlling Workers’ Compensation Costs in Construction with a Safety Program

Controlling Workers’ Compensation Costs in Construction with a Safety Program

Has your construction business experienced rising workers’ compensation costs due to on-the-job accidents? If so, your first response might be to try to reduce insurance costs and spending. While this may seem like a good approach, focusing on safety will likely produce better results.

A sound, competency-based safety program can yield significant tangible benefits, including:

  • Return on investment, yielding direct bottom-line benefits
  • Compliance with OSHA construction requirements, therefore reducing the threat of OSHA fines
  • Fewer accidents, which reduces workers’ compensation costs
  • Identification of root cause to prevent reoccurrence, providing a job site that is free from recognized hazards
  • Improved employee morale and retention; auditing keeps your program effective and drives continuous improvement
  • Employees who are fully engaged in every aspect of their job, producing high-quality craftsmanship

4 Steps to Build a Solid Safety Program

1. Develop programs required by OSHA standards.

In addition to being a requirement for those in the construction industry, OSHA standards provide a pathway to incident reductions. Many accidents stem from poorly developed or implemented OSHA programs. Not using a proper fall restraint system when working at heights more than 6 feet, improper or lack of use of personal protective equipment (PPE) when working with hazardous job site materials, and poor lifting techniques resulting in back strains are just a few examples.

OSHA construction standards require that written programs be developed and then communicated to workers. Experience shows that companies with thoroughly developed, OSHA-compliant programs have fewer accidents, more productive employees and lower workers’ compensation costs.

2. Integrate programs into daily operations.

Policies alone won’t get results; your safety program must move from paper to practice to impact your bottom line. Achieving this requires a strategic plan clearly communicated to workers, good execution and a culture that both inspires and rewards people to do their best.

When developing your safety initiative, there must be an emphasis on helping your site foreman succeed. If the site foreman understands the safety program and is motivated to make it work, it succeeds; if not, the program is a source of struggle and an endless drain on resources. Providing your site foreman with knowledge and skills through training is critical to success.

A solid OSHA program, integrated into your worksite’s daily operations and led by competent site supervisors, is just the beginning. Successful safety programs are also proactive instead of reactive.

3. Investigate all injuries and illnesses.

To reduce workers’ compensation costs, you must decrease accidents. The ability to reduce accidents is significantly enhanced when they are fully investigated instead of simply being reported.

Accident reports cite facts; accident investigations go deeper to uncover the root cause of an accident and make improvements to prevent its reoccurrence. To stop your workers’ compensation costs from rising unnecessarily, you must have an effective accident investigation process that follows through with corrective actions that are integrated into daily operations. Again, training proves beneficial because a site supervisor skilled in incident analysis is a better problem solver for all types of project management issues, not just safety.

All accidents should be investigated to find out what went wrong and why. Some may suggest investigating every accident is a bit over the top and only those that incur significant costs are worthy of scrutiny, but this approach is shortsighted. If your emphasis is only on those incidents that have to be recorded on the OSHA 300 log, you ignore the single largest accident category – first aid-only incidents. The small costs and high numbers of first aid-only incidents really add up. High frequency of minor incidents may also be a red flag that it’s only a matter of time before one of the minor incidents ends up being severe. Frequency and severity are both important factors to consider and mitigate.

4. Train and audit for continuous improvement.

The final step focuses 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 drive down costs. Site supervisors must have the knowledge and ability to integrate programs into each job on the job site so that employees know what is expected of them.

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 you want to reduce your workers’ compensation, it may be time to make this leap.

Contact a member of our team for guidance to establish a strong safety program that minimizes your workers’ compensation exposures. 

Controlling Workers’ Compensation Costs in Construction with a Safety Programhttps://www.cbiz.com/LinkClick.aspx?fileticket=poIglo0cpPo%3d&portalid=0Has your construction business experienced rising workers’ compensation costs due to on-the-job accidents? If so, your first response might be to try to reduce insurance costs and spending.2021-08-02T16:00:00-05:00Has your construction business experienced rising workers’ compensation costs due to on-the-job accidents? If so, your first response might be to try to reduce insurance costs and spending. Risk MitigationProperty & Casualty InsuranceYes