The landscape of workers compensation in the construction industry continues to face challenges from both inside and outside of construction organizations. With some estimates reporting more than 200,000 unfilled construction jobs, keeping the workforce healthy and productive is critical to sustaining operations.

However, in an industry where schedules are routinely condensed, the push/pull of sending workers to the field to satisfy project demands and keep income flowing is in direct competition with maintaining their wellness. Contractors are not paid to complete safety training, provide adequate rest periods or evaluate innovation to improve productivity and reduce risk. These activities are expenses to the organization, and when handled properly will yield an impressive return on investment. The challenge is finding the time to focus on prevention efforts, and more importantly ensuring the time is spent on the right activities to improve worker health and shield the company from increasing liability.

In addition to a shortage in skilled trades, the industry is also facing an aging workforce that further complicates an ever-increasing workers' compensation spend. In 1985 the average age of a construction worker was 36 years old. In 2008 it was 40.4 years old, and in 2017 it was 42.6 according to the BLS. Medical expenses have greatly outpaced employee indemnity payments, now comprising nearly 60 percent of total claim cost. This trend, coupled with the increased costs to rehabilitate an older worker, places many organizations in a challenging position. Companies can no longer simply return an injured employee to work on light duty and expect to save money. Return to work programs are still of paramount importance and highly effective in controlling costs, but more must be done to support workers, prevent injuries and manage claims.

Unfortunately there is no silver bullet to combat all of the threats a company is faced with every day. Contractors who employ multiple trades and service various industries must look at their workers compensation program differently. Prevention efforts should be tailored to the hazard and safe work practices developed that are reflective of the work performed. In the absence of a single solution, there are some efforts that yield a much higher return and will positively affect multiple facets of a business.

Pre-Employment screening

As competition heats up to attract skilled workers, employers must take into consideration the risks of hiring the next claim and baseline their pre-employment status, post offer. Physical abilities testing serves the purpose of establishing a marker on their health and body functions at the time of hire and will provide a much-needed backstop to prevent undue costs to an employer and insurance carrier. As companies continue to “trade” workers and inherit someone else’s liability, the likelihood the new hire has experienced a prior injury or is simply feeling the effects of aging is very high. At the time of offer, if a baseline establishes that the new employee meets the essential functions of the position, yet only has 60 percent range of motion, in the event he is injured the company’s level of responsibility to return the employee to pre-injury status has already been established. Without the baseline the company may be liable to rehabilitate an injured employee back to a pre-injury status that could be very difficult to achieve, and very costly as well. By establishing a baseline, the company can significantly limit unnecessary costs in getting such employees back to their pre-injury status.

Supervisory Capabilities Training

There is no such thing as common sense. What is apparent to some may not be to others, and workplace safety is a perfect example of this. Risk tolerance and risk perception are two variables that can have a profound effect on how work is performed and influence employees’ perception of management commitment. Most supervisors are put into positions for two reasons: tenure or technical expertise. The company must provide intentional, focused development and hone the communication and management skills necessary to intervene and coach at-risk behavior. These are not instinctual traits, but rather something that is practiced and continuously improved. Developing supervisors will positively impact the ability to identify safety concerns and productivity impacts, which in turn will alleviate worker challenges and support engagement and retention efforts.

Risk Management Partnerships

Partnering with the right broker to assist with selecting the best workers compensation carrier for company needs is the first step in securing a competitive advantage. While price is always a factor, selecting a broker as a true risk partner should be more about shared philosophy on prevention and claims management, as well as the resources they will bring to the table that will sustain operations. Any broker can place a policy, transactional relationships are not enough. A true risk partner will:

• improve the risk profile;
• alleviate administrative burdens; and
• dovetail into the organization as a resource and advisor.

They will save the company time and money on vetting strategic vendors, calculating ROI and delivering subject matter expertise and training to employees. By serving in this capacity, they are better positioned to know which carrier will complement company culture and provide the greatest return on the insurance spend. Workers compensation insurance underwriters are often afforded the opportunity to adjust their premium estimations at their discretion. In some cases, this can range from 10-25 percent based on evidence of progressive safety programs, qualification of employees, safety equipment in the workplace and other risk characteristics such as pre-employment screening practices. The broker must not only be informed, but understand how and why a company “does what it does.” Only then can they effectively sell the company’s risk in the marketplace and secure the best program, pricing and tools for its operations.

To establish a workers’ compensation program that will become a competitive advantage requires an active partnership with the broker. Much like companies that appreciate the customers who procure their services based on consistency and value added, look at the workers’ compensation broker and subsequent insurance carrier for the value they add, and not as a commodity. The impact of this strategic partnership can preserve precious human capital, streamline operations and maintain the company’s reputation as the best in the business.