Volatile and expensive. Two words that are often used to describe workers’ compensation insurance.
And because workers’ compensation insurance is mandated for all businesses with more than one employee, it impacts every employer.
If you’re like most municipalities, workers’ compensation is probably your third or fourth biggest cost after payroll. That’s a huge expense!
And if you’re like most municipalities, you are not quite sure what you can do to control or even reduce your workers’ compensation costs.
The most significant way to impact your workers’ compensation cost is by preventing workers’ compensation claims. Workers’ compensation claims have an exponential impact on your premiums!
So, how can you prevent or lessen workers’ compensation claims?
One of the most effective ways to lessen workers’ compensation claims occurs before hiring an employee – with the hiring process.
As a Certified Work Comp Advisor, I help my clients apply best practices regarding workers’ compensation issues to their entities. One of the first areas we address is hiring procedures.
A multi-pronged approach is needed to drive down workers’ compensation costs effectively. Hiring employees who are not a high risk for a workplace injury is one part of our strategy.
In this article, I touch on the importance of each part of the hiring process concerning minimizing workplace injuries and explain how each component plays an integral role. Our discussion will include the role of:
- Job Descriptions
- Job Applications
- Interviewing Candidates
- Reference and Background Checks
- Pre-employment Post-offer Physicals
- Drug Screenings
1. Job Description
Preventing job-related injuries starts with your job description. Every job listing should include a detailed description of the physical requirements that the job will require.
- Use language that expresses the exact functions the job requires.
When I say detailed, I mean expressing job requirements like lifting, bending, loading, etc. Also include specifics about each job requirement, such as how much weight must be lifted or how high they must lift it. For example, rather than state that the job requires lifting heavy boxes onto shelves, clarify by stating “must be able to lift 25 lbs. up to 3 or 4 feet off of the ground.”
- Be specific about how often the job requires each physical demand.
When you write these descriptions, you should stay away from vague words like occasionally or sometimes. Assign a percentage to how often the physical demand will need to be performed. For instance, instead of saying the job requires frequent standing, be specific by stating, “job requires standing up to 50% of the time.”
- Include time standards if used for evaluation.
The last thing you want to include is any time standards that each job requires. For instance, if you expect your employees to unload cargo from a truck each day, you should also include how long they have to complete the task. Completing work in a specific amount of time may impact who is capable of performing the job.
By explaining exactly what job applicants will be required to do, prospective hires can self-eliminate if they are not physically able to perform specific job tasks.
Detailed job descriptions can also protect your business by reducing the likelihood of being sued by an employee because they were injured on the job.
Ensuring that a job’s physical demands are outlined in a job listing is the first line of defense in preventing workplace injuries.
2. Job Application
A prospective employee’s job application is also full of details that can warn you that a job applicant might be a “work comp claim waiting to happen.”
Thoroughly looking at an applicant’s job history will potentially give insight into past workers’ compensation issues. This is especially true if you notice gaps in employment.
While legally, you can not ask an applicant to disclose previous workplace injuries, you can ask about their employment gaps. A gap in employment can be a red flag because it may signify that the applicant was off work due to a workplace injury.
You can ask an applicant a question like, “I notice that you don’t have any employment listed between June of 2012 and August of 2013. Can you tell me more about that?”
Also, you can use an applicant’s job history to inquire about specific physical demands from a past job. By asking specifics about the type of work they did at their past employment, you can get insight into their abilities, experience, and even safety training they may have already received.
The interview is another vital piece to determine if an applicant is physically capable of doing the work required in their desired position. Using your detailed job requirements, you can formulate specific questions related to the job’s physical demands.
As an employer, you do have some limits about what you can ask. You may not ask outright about previous injuries. And applicants are not required to report on any prior injuries.
You will need to keep your questions focused on tasks that the job will require.
According to Chron, “However, employers can ask job candidates whether they can perform specific functions the job requires, such as lifting items of a certain weight or standing for extended periods. Employers can also ask whether the candidate would need special accommodations to perform a given task.”
For instance, if the job description states that the employee will need to lift heavy items, you can ask questions about lifting protocol. You can give a job scenario and ask how the applicant would approach the situation.
If the job requires the employee to operate heavy machinery, those interviewing can ask questions that give insight into what an applicant knows about handling that machinery safely.
4. Reference and Background Checks
Another component you will want to take full advantage of are reference and background checks.
References can be an excellent source of information about potential hires.
Not only can they help you get a sense of an applicant’s character and work ethic, but they can also weigh whether an applicant will be a good fit for the desired position.
A reference can give valuable insight into an applicant’s ability to safely and responsibly carry out the job’s required duties.
To prevent workers’ compensation claims, you will also want to conduct background checks on all potential hires thoroughly. These checks should include:
- Credit history
- Driving records
- Criminal background
- Education records
By thoroughly screening candidates, you will get an accurate picture of their reliability, reputation, and character.
5. Drug Screening
The final step your municipality may want to consider is drug screening potential hires. Your municipality can offer the applicant the job with the condition that they submit to a drug screening.
Drug use is a significant problem in terms of workers’ compensation. Consider these statistics from Working Partners:
- Drug and alcohol use is involved in 47% of industrial injuries and in 40% of industrial deaths.
- Drug and alcohol abusers are 3.6 times more likely to have an accident on the job.
- Drug-using employees are five times more likely to file a workers’ compensation claim.
- 38% to 50% of all workers’ compensation claims are related to alcohol abuse or other drugs in the workplace.
When drug screening is required for applicants, chronic drug users are discouraged from applying. Drug abuse has considerable implications in terms of your workers’ compensation costs.
6. Pre-employment Physical
Do you require your candidates to have a medical examination after offering them a position but before being hired?
As an employer, you can request that potential hires see a doctor for a physical before finalizing employment. First, you need to let the candidate know that you would like to offer them a job, but they will need clearance from a physician as a condition of employment.
A physician can uncover preexisting conditions that would prevent a potential employee from safely working for you. The physician can identify any past injuries that might be reaggravated on the job. Old injuries can end up in new workers’ compensation claims.
Let’s say you need to hire someone for your parks and recreation department. This is typically a physically demanding job. Your parks and rec team often carry heavy bags of mulch in the summer as they tend to your local parks. You settle on an applicant that seems to be an excellent fit for the position.
Before hiring, you request the applicant have a pre-employment physical. During the appointment, as the doctor is recording the applicant’s past medical history, he notes that the applicant had shoulder surgery a few years ago.
Knowing the medical history and the applicant’s specifics, the physician can help determine if this applicant is likely to get reinjured working for your municipality.
If the applicant is hired and injures their shoulder while working for you, you will have to file a workers’ compensation claim.
Reinjury claims can cost your municipality tens of thousands of dollars. For instance, a shoulder claim can end up costing $60,000!
A pre-employment physical is likely to cost $120. This low cost can save your municipality thousands of dollars!
And not only does workplace injury prevention save money, but it also saves a lot of headaches! Having to find a temporary or permanent replacement for the injured personnel takes time and energy.
Want to help your municipality use best practices in your hiring procedures?
While it may sound simple and even apparent that these practices need to be in place, it can be challenging to put it all together! For one, it requires that those who help with the hiring process be trained and committed to these best practices.
Another big issue can be the need to hire individuals promptly. Often, municipalities need jobs filled asap!
But, taking hiring shortcuts can leave your municipality with growing workers’ compensation costs. And once these costs begin to go up, it can take years to reduce them again.
Just one workers’ compensation claim will have a three-year impact on your workers’ compensation costs. (To understand how one claim can drive up your worker’s compensation costs, check out this article-10 Facts About Experience Modifiers (and How They Affect Work Comp)
At Baily Insurance Agency, we are committed to helping our clients reduce their insurance premiums.
We know high workers’ compensation premiums require more than a quick fix! They need a long-term plan -and even more importantly, a team to execute that plan!
Baily Insurance does more than merely represent your municipality to the insurance company. We come alongside and partner with you by helping you with the actions your entity needs to take to begin controlling your costs.
To learn more about what you can expect from our team, I’d love to share how we helped a borough experiencing some challenges with their workers’ compensation program. Together we created a long-term plan, and the borough has seen tremendous savings from their efforts.
If you want to explore what it would mean for your entity to work with our workers’ compensation team, give us a call today!