A penny saved is a penny earned. That is especially true during an economic downturn, such as when economists predict there’s a 70% chance the US will sink into a recession. It makes sense to save and cut costs whenever you can. One of the most effective ways you can do that is by minimizing worker compensation costs. In 2021, for instance, employers were paying more than $1 billion in compensation costs weekly. OSHA is certain employers can make significant savings by streamlining their operations. This guide shows how to reduce workers’ compensation costs while improving employee welfare.
Set up a safety program
Perhaps the most effective way to reduce workers’ compensation costs as prevention is better than cure. As OSHA observes, effective implementation of health and safety programs will significantly reduce costs associated with illnesses and injuries and improve productivity.
Setting up the program will help you identify the hazards and eliminate them. OSHA provides a step-by-step guide:
- Include safety practices in the company culture. Establish health and safety objectives and goals according to OSHA standards and provide enough resources to achieve them
- Involve workers in the establishment of standards and implementation
- Educate and train employees on preventing and recognizing hazards
- Put in place procedures for preventing, controlling, identifying, and assessing hazards
- Audit and improve the programs
Quality medical care
Another surefire way to reduce worker’s comp costs is by providing adequate high-quality medical attention as soon as possible. That will reduce the chances of the worker suffering long term, keeping medical expenses down and reducing the number of sick leave days.
You should consider a workers comp insurance provider that utilizes an outcomes-based network (OBN). These are a network of doctors they will choose based on good results rather than the typical way of selecting whoever is closest to the worker in need of care.
Offer wellness programs
One of the best ways to reduce workers’ compensation costs is by providing wellness programs. Wellness programs are a way to keep workers healthy, minimizing doctor visits.
Indeed research shows that well-executed wellness programs can minimize absenteeism and healthcare costs and reduce workers’ compensation costs by as much as 25%.
Such a program will incentivize employees to return to work as soon as their injuries allow, even if they attend to light duties or work part-time. That will decrease the number of lost workdays and reduce worker’s compensation costs.
The injured employee can get back to earning a salary and lessen the burden on the other workers who had to pick up the slack and work overtime to cover for the injured colleague.
Search for better terms
Conducting all the above measures would be pointless if you don’t find a cost-effective workers’ compensation policy provider. If your costs are still too high, it’s time to get your money’s worth by hunting for a better deal from a new compensation insurance company.
If you don’t know your way around the insurance market, task your insurance broker with looking for a new provider who will adjust your deductibles and recalculate the premium rates based on losses.
Enlist a PEO
If you don’t appreciate the hustle of managing the costs workers’ compensation costs, you could utilize a professional employer organization (PEO). A PEO can help you make light work of tedious tasks such as health benefits management, workforce compensation insurance, and employee practice and liability insurance (EPLI). Part of their task would be:
- Workplace safety evaluation
- Designing workplace safety programs
- Efficient resolution of claims
- Work out which coverage plans will reduce worker’s compensation costs
Employee compensation is essential, but that doesn’t mean you have to pay an arm and a leg to acquire coverage. If your rates are too high, there are ways you can reduce workers’ compensation costs, such as setting up safety and wellness programs.