It’s always important to gain better control over your rising workers’ compensation costs. One solution to shift your focus from solely trying to minimize lost-workday incidence to a more holistic approach. Having a sound safety program designed to continuously improve can yield significant savings by reducing injuries and illnesses over the long run–saving workers’ compensation dollars and protecting your bottom line.

The Five Steps

You can control workers’ compensation costs with five steps designed to create a well-rounded safety program that produces a safer job site, achieves OSHA compliance, and reduces accidents.

1. Develop safety programs required by the OSHA standards.

2. Integrate those programs into daily operations.

3. Investigate all injuries and illnesses.

4. Provide training to develop safety competence in all employees.

5. Audit your programs and your worksite on a regular basis to stimulate continuous improvement.

1. Establish Compliance Standards

In addition to being a requirement for those in the construction industry, OSHA standards provide a good pathway to incident reductions. A good number of accidents stem from poorly developed, poorly trained or poorly implemented OSHA programs.

OSHA construction standards require written programs be developed and then communicated to workers. Experience shows that companies with thoroughly developed, OSHA-compliant programs have fewer accidents, more productive employees, and lower workers’ compensation costs.

2. Integrate Programs into Daily Operations

Policies alone won’t get results; the program must move from paper to practice to impact your bottom line. Achieving this requires a strategic plan clearly communicated to workers, good execution, and a culture that both inspires and rewards people to do their best.

As with any business initiative, the success of your safety program depends on putting supervisors in the best position to succeed. If your frontline supervisors understand the program and are motivated to make it work, the program succeeds; if not, the program is an endless drain on resources and energies. Providing supervisors with knowledge and skills through training is critical to the success of any program.

A solid OSHA program, integrated into the daily operation and led by competent supervisors, is just the beginning. Successful safety programs focus on being proactive instead of reactive.

3. Accident Investigations

Accident investigations provide an excellent source of information on real or potential issues present on the job site. Since workers’ compensation covers a worker’s wages for injuries or illnesses that arise from or out of the course of employment, increasing claims drive up workers’ compensation costs. To reduce costs, you must reduce accidents. And the ability to reduce accidents is significantly enhanced when they are fully investigated instead of simply being reported.

Accident reports are historical records that only cite facts, while accident investigations go deeper to find the root cause and make improvements. To stop rising workers’ compensation costs, you must have an effective accident investigation process that flushes out the root cause of the problem. Unless the root cause is discovered, recommendations for improvement will be difficult if not impossible to implement. Again, training proves beneficial because a site supervisor skilled in incident analysis is a better problem solver for all types of issues, not just safety.

All accidents should be investigated to find out what went wrong and why. Some may suggest investigating every accident is a bit over the top and only those that incur significant costs are worthy of scrutiny. But if your emphasis is only on those incidents that have to be recorded on the OSHA 300 log, you should be aware of the largest accident category, first aid-only incidents. Many firms focus solely on recordables or lost time accidents because of the significant costs involved, but they don’t realize that the small costs and high numbers of first aid-only incidents add up.

Statistics show that for every 100 accidents, only 10 will fall under OSHA regulations as recordable. If you investigate only the accidents you must, the vast majority will go unnoticed. Reducing serious accidents means you must reduce your overall rate of all accidents–including first aid-only incidents. That only happens when every incident is fully investigated to find the root cause, and corrective actions are identified and integrated into daily job tasks.

4. Training

The fourth step focuses on training, which plays a significant role in safety and in reducing workers’ compensation costs. The goal of training is to develop competent people who have the knowledge, skill and understanding to perform assigned job responsibilities. Competence, more than anything else, will drive down costs. Site supervisors must have the knowledge and ability to integrate programs into each job on the job site so that employees know what is expected of them. Contact your representative at to obtain comprehensive safety materials and programs.

5. Continuous Improvement

The final step is auditing your safety program for continuous improvement. Once the programs are developed and implemented, they must be reviewed on a regular basis to make sure they are still relevant and effective. This might require a significant change in how you manage your safety program, but if your workers’ compensation rates are high it may be time to make this leap.

Safety Makes Good Sense

All employers should strive to keep their employees as safe as possible, and it also makes the most sense for the health of your business:

1. Studies indicate that properly designed, implemented and integrated safety programs lead to a return on investment, and that firms will see direct bottom-line benefits.

2. A competency-based safety program is compliant with OSHA construction requirements and therefore reduces the threat of OSHA fines.

3. A competency-based safety program lowers accidents, and fewer accidents lower workers’ compensation costs. When incidents do occur, a competency-based safety program fully evaluates the issue and finds the root cause to prevent reoccurrence and provides a job site that is free from recognized hazards.

4. A safer job site creates better morale and improves employee retention. Auditing keeps your programs fresh and effective, and drives continuous improvement.

5. A competency-based program produces people who are fully engaged in every aspect of their job

Work with the Experts

At Olsen & Olsen Insurance Services, we are committed to helping you establish a strong safety program that minimizes your workers’ compensation exposures. Contact us today at admin@olsen-insurance.com to learn more about our OSHA compliance and safety program resources.

 These Risk Insights is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.