Worker safety and savings

Steve Cesare

Workers’ compensation insurance premiums, driven in large part by a company’s Experience Modification Rate (XMOD), continue to increase, all the while draining financial capital from the company’s profit margin. Sadly, many landscape companies have resigned themselves to the position that this is simply an administrative process over which they have little control. Nothing could be further from the truth: Apathy is not the answer; action is.
 

Leverage the vendor. Landscapers must demand more direct service from their workers’ compensation vendors to reduce their XMOD. In most cases, workers’ compensation vendors simply provide routine administrative services, while failing to perform any operational support to the landscape company. Such limited clerical scope does not improve the landscape company’s safety culture or its’ XMOD. That service relationship is insufficient, insincere, and inequitable; it must be redefined in favor of the landscapers. After all, they are making the payments.

At the time of policy renewal, landscapers should require all potential vendors submit a detailed tactical plan that will decrease the company’s XMOD by 10-15 percent for the next calculated year. Common interventions include: one-page safety summaries that can be distributed to all employees as a weekly payroll stuffer; monthly yard safety audits, job site safety audits and field safety training sessions conducted by the vendor and monthly on-site claims review sessions to review loss run reports and facilitate timely closure of existing claims.

This level of involvement, analysis, and resource commitment demanded by the landscaper and provided by the vendor defines a partnership aimed sincerely at improving employee safety and company success, rather than a commoditized relationship premised on apathy.
 

Safety programs. Most landscape companies have tailgate sessions, safety videotapes and personal protective equipment. That is a minimalist approach to safety. Additional investment is required to reduce a company’s XMOD. For example, a company should align itself with the workers’ compensation vendor medical provider network (MPN) to control treatment costs, reduce fraudulent claims and preserve quality care. Formal reliance on the MPN can also benefit the landscaping company by emphasizing an aggressive return-to work program, FMLA compliance and OSHA injury reporting procedures.

An effective drug testing program can also contribute to a reduced XMOD. Companies that offer pre-employment, post-accident/injury and reasonable suspicion drug testing as part of the MPN are taking accelerated measures to minimize injury occurrence. Apathetic landscapers view drug testing programs as another cost to be eliminated; conversely, landscapers trying to reduce their XMOD view drug testing programs as part of their strategic investment to promote employee safety and minimize workers’ compensation costs.
 

Accountability. Landscapers must track safety accountability with the same vigilance as they do for revenue, customer service and profit.

To that end, every foreman, superintendent and executive should be assigned safety goals and be evaluated annually on those standards (e.g., incident rate, days lost, cost) for their respective span of control. These data should be reviewed during each monthly management team meeting with specific detail, implication, and personal accountability being well documented.

At the time of annual performance reviews, positive year-to-year change should be reflected in public recognition and a pay raise; negative year-to-year change should be reflected in formal disciplinary action. Without continuous executive-level accountability, systematic improvement to a company’s XMOD cannot occur.

Every employee injured on the job should be interviewed by a safety panel consisting of three company managers (e.g., safety coordinator, account manager and an executive) focused on investigating the injury, the employee, and the action steps to eliminate reoccurrence. This the importance of safety to the workforce, reduces the likelihood of fraudulent claims and positions the employee directly in front of those managers accountable for their own safety goals.

Safety bonuses (e.g., pay, gift cards, raffle) for a continuous injury-free period of time should be designed fairly and distributed publicly by company executives.
 

Summary. Landscapers must take an active role in reducing workers’ compensation costs associated with their XMOD.

Their mature, systematic, and balanced ability to leverage heretofore uninvolved vendors, implement value-added safety programs, and promote a culture of accountability toward safety, will benefit their employees, their companies and their financial future.

Steve Cesare is an industrial psychologist with the Harvest Group, a landscape consulting group. Send your HR questions to cesare@gie.net.