The beginning of the year is a good time to look at your company’s risks and consider steps you might take to manage them. We recently invited David Howard, founder of Premier Risk Management, to talk with our clients at a Miller Group Learning Café. Here’s a recap of the insights he shared.
When designing a risk management plan, David and his team look at:
- Work environment
- Written compliance plan
- Employee training
- Loss control
- Health and wellness
His planning work is designed to help management do everything they can to stem complaints and violations BEFORE they occur – reducing costs in the end. He begins by assessing 150 to 160 items that span all areas of operations, including culture.
Important Risk Areas
Employees are your greatest asset and also your greatest risk. So, you first need to look at your hiring process and the quality of people you’re adding. David asks “Who are you inviting into your living room? Who is this person you’re bringing home to meet your kids.” Because that’s the level of impact one individual can have on your business.
People also heavily affect the next category of risk – equipment. Ninety-five percent of all losses related to equipment can be tied to human error. Only five percent are based on engineering flaws. This, again, points back to better hiring, better training and better employee engagement.
Inventory may be a surprising place to look for risk, but it’s full of potential issues, too. David asked, “How much stuff do you have lying around, and do you have control over it?” The greatest areas of loss for many businesses are credit cards and fuel. One trucking company’s audit found that drivers were using company cards to buy gas for other truckers, charging them a fraction of the price in order to get cash for themselves.
Regulatory agencies have minimum requirements for training regarding workplace hazards, but he recommended going beyond them. For example, the regulations don’t address language or educational barriers that may influence the effectiveness of your training programs. You might need to hire interpreters or redesign your training to make sure all your workers truly understand the training.
Risk Management Planning
One suggestion would be changing the perspective of your safety efforts towards prevention. Instead of a “Safety Committee,” make it an “Assessment team.” Start by assessing your risks and then make a plan to mitigate them with procedures, processes, hiring and training. Make the team accountable for meeting a specific timeline, too.
Of course, this team also needs to stay on top of current incidents and investigate them thoroughly. That’s one of the best ways to make sure they don’t happen again. Timely review also helps you defend yourself should someone sue you. You are more likely to be sued at the very end of the two-year statute of limitations, because the litigant assumes you will have no documentation. “The speed and accuracy of investigation is the most powerful thing you can have,” David said.
Another way to manage workers’ compensation claims is to check local laws on requiring employees to use a specific network provider for workplace injury treatment. In many states, you can create your own network and hold your providers accountable for following your specific protocol. You also can establish a nurse triage line to manage traffic to providers. Make sure the triage nurses apply the same protocol, too, especially when it comes to insisting on drug testing for every incident.
David recommended having a written compliance plan that considers all the “what if” scenarios you can imagine. What would you do if your company lost everything? What would you do if an active shooter entered your establishment? These are also important topics to address in employee training.
He suggested doing your own site inspections to control and fix issues before they cause a problem. Keeping records on those inspections and the resulting actions can be your “get-out-of-jail-free” card, he said, because they often make potential litigants walk away.
Finally, David recommended reviewing claims frequently – at least quarterly – to look at loss runs, training gaps and inspections. This is where you will find issues you can address to improve in the future.
Health and Wellness
David considers this topic part of risk management, as well. He sees a direct correlation between wellness and workers’ compensation claims. The “loss run” on the phenomenon of “presenteeism” is high for employees who smoke, don’t exercise or don’t eat right and for those experiencing pain, depression and obesity. An effective wellness program can address these issues and dramatically improve the productivity of your staff.
The problem with many existing wellness programs, he said, is that they are not effectively engaging employees. They use passive systems, such as apps and websites, and they may be completely missing employees who aren’t on the company’s health plan.
His firm has had success with building programs around the individual, including live, personalized coaching. The programs also emphasize continuous evaluation to inform adjustments and measure impact.
Return on Integration
In wrapping up his presentation, David emphasized the importance of making your occupational health and safety, wellness, and risk management plans work together to reduce the frequency and severity of your workers’ compensation claims.
By Steve Edwards, Claims Department Manager