Strong Safety Management Systems Can Help You See a Reduction in Your Workers’ Compensation Claims

When a company experiences significant increases in workers’ compensation costs, it usually triggers internal activities aimed at reducing insurance costs and spending. The key to spending fewer dollars is more than the absence of accidents; it is having a sound safety management system designed to continuously reduce the impact of operational failure. This is where a safety management system can bring about compliance with the Occupational Safety and Health Administration (OSHA) standards and yield significant savings by reducing injuries and illnesses, saving workers’ compensation dollars.

“Having served clients in the Workers’ Compensation claims industry for 30 years, I have seen this in action,” agrees Tracy Carter, Vice President of Workers’ Compensation Claims for Cobbs Allen. “Organizations with well-developed safety management systems tend to have less Workers’ Compensation claims or claims that are less severe in nature.”

There are four basic steps an organization can take to have a well-rounded safety management system that produces a safe work environment, achieves OSHA compliance, drives continuous improvement, reduces accidents and ultimately reduces workers’ compensation costs. 

1. Leadership Commitment & Employee Engagement

Commitment to a safe and healthful workplace starts at the top. Management should clearly establish a policy and a written expectation to keep worker safety the top priority. Dialogue about safety can now become part of normal conversation from management to workers and workers to management. Examples of management commitment and employee engagement could look many different ways.

• Demonstrating safe behavior and leading safety activities such as safety committee meetings.
• Allocating adequate safety resources such as staff, budgets, training, and equipment.
• Holding supervision accountable by including safety within performance expectations.
• Allowing employees to take ownership in the safety program through participating in accident investigations, safety committees, and other safety initiatives   

 2. Hazard Assessment

An ongoing hazard assessment process should be developed and performed for operations to determine the risks posed to workers. Hazard assessments should not only focus on safety, but on industrial hygiene and environmental concerns as well. Typically, pre-determined checklists are used to evaluate various aspects of the workplace such as equipment requirements, safe behaviors, slip and fall hazards, ergonomics, personal protective equipment, and health concerns such as fumes and chemical use in the workplace. Other hazard assessments include:

• Machine safeguarding hazard assessments 
• PPE hazard assessments
• Fall hazard surveys
• Physical hazard assessments

 3. Hazard Prevention and Control

Workers should be involved within operations to effectively manage hazards; hazard controls must be effective and designed in a way where workers will most easily adopt them into their work. Once hazards are assessed and understood, appropriate controls can be evaluated. Ongoing hazard prevention and control activities can look like:

• Safety concern reporting and tracking systems
• Equipment and preventative maintenance programs
• Accident investigation/root cause analysis
• Key performance indicator trending and analysis
• Managing, updating, and evaluating the effectiveness of written OSHA compliant programs

4. Safety and Health Training

The final steps 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 improve all aspects of your business and drive down costs. 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. 

Tangible Benefits

• Studies indicate there is a return on investment and that companies see direct bottom-line benefits with a properly designed, implemented and integrated safety management system. 
• A competency-based safety management system should be above OSHA requirements and therefore reduces the threat of OSHA fines. 
• When incidents do occur, an integrated safety management system fully evaluates the issue and finds the root cause to prevent reoccurrence and provides a workplace that is free from recognized hazards. 
• A safer workplace creates better morale and improves employee retention. Auditing keeps your programs fresh and effective and drives continuous improvement.
• An integrated management system produces people who are fully engaged in every aspect of their job and are satisfied and fulfilled producing high-quality goods and services.

In the end, managing safety isn’t as much a people problem as it is a systems problem. Workers function in a system owned by management, but are forced to manage risks not understood by management. It is at this point where operational failure occurs and injuries happen. Both workers and management must have ownership in the safety management system to continuously improve workplace safety.