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NEWSLETTERS
NEWSLETTERS
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561-683-8383
January 2008 |
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In this issue
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Landscape Contractor Sprouts a $104,000 Refund |
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Why safety programs are not enough
A healthier workforce produces substantial financial benefits
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Managing a multicultural workplace
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Landscape Contractor Sprouts a $104,000 Refund
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Insured
This major landscape contractor servicing commercial properties employs 120 people and does $1.9 million in annual revenues.
Situation
A year after purchasing the company, the insured was concerned why, as a relatively new business, its Experience Mod was extremely high at 1.39, with annual premiums in excess of $400,000.
Assessment
Certified WorkComp Advisors (CWCAs) conducted a complete needs analysis on the company, running the gamut from human resources to claims filing. The insured was unaware of how the system worked in regards to ownership changes and it was discovered that the insured had actually inherited the previous owner's high Experience Mod. Significant aspects of the operation, including the discontinuation of tree trimming, had changed.
Solution
Utilizing techniques and information garnered at the Institute of WorkComp Professionals, the advisors did a thorough investigation of ownership laws and deduced that the insured should not have inherited the previous owner's excessive Mod rating. Appropriate paperwork was filed with the rating bureau, and the Workers' Comp Insurance Rating Bureau agreed on the findings.
Result
After the successful filing with the bureau, the insured's Mod was adjusted and lowered to 1.0 and a refund of $104,000 in premiums.
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Why safety programs are not enough
A healthier workforce produces substantial financial benefits
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There is little doubt that employers' efforts to promote worksite safety have been good for Workers' Compensation. The number and rate of occupational illnesses and injuries requiring days away from work has steadily declined. In fact, the number of lost time claims has declined by more than half - 52.1% since 1991, with drops of 6.6 and 6.8 in 2005 and 2006, respectively.
Yet, in many ways, it is the success of safety programs that has transformed Workers' Compensation into a health care delivery system that must be viewed quite differently than an injury prevention system. While the number of injuries has declined, the cost and the severity of the claims have increased - doubling in cost since 1993. Furthermore, the share represented by medical costs continues to grow - representing 58% of losses.
Add to this the growing prevalence of chronic health problems among employees as well as latent disease developing in workers years after they complete their jobs and there is a need to view Workers' Compensation in a much broader context. The distinction among the types of lost time, as well as appropriate solutions, begins to blur. Employers who take a narrow, safety and risk management approach to Workers' Compensation will find it ineffective in addressing the rising costs of injuries and chronic health issues. Employers need to understand that all lost time is connected and that employees who have frequent intermittent absences are more likely to go out on disability and be higher-than-average consumers of group health benefits and Workers' Compensation.
It's not unusual for employers to consider absenteeism - whether it is incidental absence, short-term disability, long-term disability, FMLA leave or workers' compensation - to be part of the cost of doing business. Employers who have stellar safety programs may solely measure the number and cost of accidents, rather than looking at the overall costs and interrelationships of absenteeism.
Lost productivity, reduced profits and low employee morale are all consequences of employee absenteeism. In the paper, "How to Present the Business Case for Healthcare Quality to Employers," Applied Health Economics and Health Policy, Sean Nicholson found that for many jobs the cost impact is a multiplier of between 1 and 2 applied to the salary cost. Across 35 job types, the mean multiplier was 1.61. The more impact a person has on a team or department, the greater the multiplier. Moreover, the longer the absence, the more morale is adversely affected, causing a domino effect of diminished productivity.
Without measuring the impact of employee absenteeism on lost productivity and reduced profitability, employers might not be allocating their resources to the right programs that meet the needs of their employees.
Each year, 10 common chronic conditions account for an average of more than 10 days of work loss, although some conditions such as depression, cancer and respiratory disorders may account for many more. In addition, these health conditions lead not only to lost work time, but also to reduced productivity while at work (commonly referred to as "presenteeism"). While very difficult to measure, presenteeism has a serious adverse effect on productivity and profitability.
As the incidence of chronic illness increases, it is essential to develop programs that address the problems, just as it was necessary to develop safety programs to prevent injuries. For example, as the number of young Americans who are diagnosed with diabetes increases, the condition is likely to become more commonplace in the workplace. Complications associated with diabetes can lead to increased absenteeism or impaired productivity, yet workers who are able to achieve control of their diabetes are more likely to be productive and miss fewer days at work.
Similarly, routine mammography screening may reduce breast cancer mortality by as much as 30%. Mammograms offered by employers at the worksite benefit both the employer and employee by overcoming the common barriers of cost and inconvenience.
A survey by the Employer Health Coalition, Inc. found that workers in Florida suffering from seasonal allergies lost more than three days of work in a four week period due to impairment from seasonal allergy symptoms or sedation associated with their medication. However, with the proper treatment there is no significant decline in productivity.
Employers have a variety of tools to promote better health and productivity, including on-site clinics, clinic relationships, health promotion and wellness programs, disease management education and training as well as health insurance and sick leave benefits.
According to a report by the American Hospital Association, these programs not only help employees get and stay healthy, they also pay dividends. "A review of 42 published studies of workplace health promotion and wellness programs found an average savings of $5.93 for every $1 spent. This study also found that workplace wellness programs yielded an average reduction in sick leave absenteeism of 28%; in health costs of 26%; and in Workers' Compensation costs and disability claims management costs of 30%." |
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Managing a multicultural workplace
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Multicultural workplaces pose many challenges for communication with employees that can result in increased injuries. The rate of fatal work injuries among Hispanics and Latinos was 21% higher than the entire U.S. workforce in 2006. Although the most obvious barrier is language, bridging the cultural barrier is the most difficult.
According to Susan Smith, Ed.D. an associate professor of safety and environmental health courses at the University of Tennessee, 'canned' training material will not fit every multicultural worker. It is important to do an assessment of your workplace and your workers to have a really good idea of what their cultural background is, what their level of reading is and what is the most appropriate way for them to learn. There is a big difference between Hispanic workers from different countries - the language will have different colloquialisms that mean different things to different people. Really reaching workers requires more than language fluency.
Some suggestions:
* Consider using training that allows for operationally hands-on work. This has been found to be more effective than interactive media training, such as CDs or online training, in multicultural workplaces.
* Identify those workers who are proficient in writing, reading and understanding the language and utilize their skills to help train others.
* Understand that some cultures foster a reluctance to question authority. Although they may be trained to report faulty, unsafe equipment, some workers may be reluctant to do so and feel it is their responsibility to try and work around the problem. It may be necessary to establish a hotline or system where problems can be reported confidentially.
* Don't mistake your culture clues for theirs. For example, nodding a head or saying yes does not necessarily mean that the information has been understood. Take steps to verify learning.
* Consider requiring supervisors to become bilingual when managing a multicultural workforce.
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Giving the right impression to job applicants
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Hiring good employees is the foundation of any successful business and also is key to controlling your Workers' Compensation costs. According to the employment agency, Hudson, more than four in 10 workers are looking for new jobs. Moreover, 60% of the men and 52% of the women think it will be easy to find a new job. With heavy competition, it behooves employers to spruce up the impression they project to prospective employees.
Our strategic partner, HR That Works!, provides a checklist for first impressions - how employers represent themselves to job applicants, as well as existing employees. Here are some of the pointers:
* Job postings - What message do you send out to job applicants? If you were to compare your ads with the others out there, what makes yours stand out?
* Your website - Job applicants will review your website to see what message you have put on it about your employee relations. If you have no message, that in and of itself speaks volumes.
* Community press releases - Are you constantly announcing the promotions and successes of your employees in industry and local business periodicals?
* Industry and association awards - Do you hold yourself out to the public as a great place to work? If so, how have you proven it? How do you show it? Where are the articles and awards?
* On your vehicles, in your stores, in your advertisements -How are you using your existing "billboard" space to brand your company?
* Telephone greeting - How is the phone answered? How about starting with "It's a great day at _____! My name is ____. How can I help you?"
* The waiting area - How are job prospects treated while filling out a job application or waiting to be interviewed? Are they treated like one of your most important clients? Is their name on a welcome board? If not, why not?
* Your working environment - What does it say to someone just by looking at it? Does it show on it how your employees are acknowledged? Are their pictures on the walls? Are client letters on the walls? Are employee awards on the walls?
* The interviewing process - The way in which you interview someone causes him or her to want to work for your company, or not. Do you conduct the interview in a clean, well-lit place? Are you well organized and is it a rigorous process that makes folks understand this is a "special workplace" or simply an effort to get it over with?
* Orientation process - Management gurus will tell you the first 90 days of employment can make or break employee relations. How fine-tuned is your orientation process? Are you clear about its purpose? How are newcomers included into the team, group, culture and so on?
* The employee entrance - It is amazing how many employees walk through a de-motivating entrance every single day! Ask a simple question, is your employee entrance adding to employee motivation or not?
* Uniforms - Whether it is affinity clothing or your dress code (casual vs. conservative) - what we wear speaks volumes.
The quality of employee performance begins with the quality of the hire. Employees are evaluating you as much as you are evaluating them. Companies that are best at building and retaining their workforce recognize the importance of a positive first impression.
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