How to Reduce Workers' Comp Costs

There are ways to help reduce your company’s workers’ comp costs. Here are five steps you can take now.

1. Assess the safety of your work facilities. The hands-down best way to lower workers’ comp costs is to eliminate or reduce injury claims. And the most efficient way to do that is to create the safest work environment possible. This starts with a top-to-bottom safety assessment of all of your facilities.

For example, how safe is your machinery? Do your machines need repairs or maintenance? What about desktop workstations, lighting, and air quality and temperature? Are company vehicles being properly maintained and serviced?

Make sure employees receive the proper safety equipment for the jobs they’re asked to perform. This includes not only more obvious safety gear like helmets, goggles, back supports, dollies, and gloves, but also things like ergonomically correct chairs, keyboards, mouse supports, and telephone equipment.

2. Encourage and reward safe work practices. Be sure to provide the proper training and instruction employees need to perform their jobs safely -- starting on day one. Then look for opportunities to offer ongoing education in the form of workshops, training, and seminars to help employees stay up-to-date on the latest safety practices for their jobs.

Post safety reminders in common areas throughout your workplace and hand out fliers with safety tips. Also consider offering incentives and rewards for practicing safe work habits; for example, have a companywide pizza party at lunchtime if employees achieve a certain number of accident-free days.

3. Assign job classifications accurately. The main determinant of workers’ compensation insurance premiums is the classification of job positions according to their level of injury risk. States set the basic rates for job classifications, of which there are currently more than 600 different classification codes.

Instead of taking the time to assign codes correctly, some employers assign the same code to all employees who work in a particular department -- for example, classifying all admin employees as “office clerks.” But not all administrative positions carry the same level of injury risk: Some employees may type all day long, for example, which increases their risk of carpal tunnel syndrome, while others type very little, if at all.

4. Bring employees back to work faster. The longer injured employees stay out of work on disability, the higher wage replacement and medical costs -- and, therefore, your workers’ comp premiums -- will be. To reduce this time as much as possible, create a formal return-to-work program that encourages injured employees to get back to work as quickly as they can.

Your program might allow injured employees to come back to work on a modified schedule or part-time or limited basis at first. At the same time, injured employees need to feel safe when they return to work, so take any necessary steps to address the cause of their accident and help ensure that it won’t happen again.

5. Create a corporate wellness program. Healthy and fit employees are less likely to become injured on the job. Wellness programs run the gamut, from providing subsidized health club memberships or an on-site gym for employee use to offering employees the services of a personal trainer or dietitian, either paid for or subsidized by the company.

By Don Sadler,