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Most employers view Worker’s Compensation as just another unavoidable cost of doing business. It usually falls into the “out of sight, out of mind” category when rates are low. It’s not until an employer is hit with a rate spike that they really start to give their Workers Compensation some thought.
Employers need to constantly look at Workers Compensation as a tool to improve their business’s bottom line.
Here are four common Workers Compensation mistakes that deter savings:
1. Assuming that lower rates equate to lower costs. Don’t make the faulty assumption that your cost will go down automatically just because your rates have been reduced. Workers Compensation insurers use an experience modification factor to examine the actual losses incurred by the insured company and establish cost. The actual losses are compared with other companies in similar industries.
2. Believing that employers have little control when it comes to the expense of Workers Compensation. Employers know they’ve got to have Workers Compensation insurance. However, this acknowledgment shouldn’t lead to an employer thinking they’ve got to pay excessively for it; employers don’t and shouldn’t.
3. Neglecting or de-emphasizing cost containment and injury management during low rate periods. Safety should be an unyielding focus at all times.
4. Not making the association between cost containment and worker retention. Studies have shown that fewer accidents occur among skilled workforces, but even skilled workers can have an accident. A large part of whether or not an injured skilled employee returns to work is based on how their employer responds to them during and after recovery.