The construction industry is the backbone of a city’s economic development.
With Arizona’s construction slowdown during the economic downturn, many skilled workers left the state, making retaining a qualified, skilled workforce one of the biggest challenges contractors face today. As the industry struggles to recover and attract new workers, health and safety needs to be a major area of focus.
Workers’ Compensation claims impact not only the general workforce welfare, but also the company’s bottom line. Each claim contributes to a company’s e-mod (Experience Modification) rating, which, if too high, drives up premium costs and negatively impacts safety perceptions. If a company’s e-mod is too high, it may not qualify for that next big contract.
Pre-employment assessment programs evaluate employees’ wellness and abilities prior to hiring and can prevent claims. One such uses a Cost Reduction Technologies (CRT) machine that tests the agility and strength of employees during the pre-hire phase, helping employers spot potential injuries before they happen and identifying employee fitness for the jobs they will undertake. The evaluation enables companies to better identify qualified applicants and avoid injuries on the worksite.
An independent risk score offers a benchmark of the company’s current condition and is similar to a company physical that determines the health of its safety culture. Some insurance partners offer resources to help not only retain that qualified workforce, but also identify ways to keep a safety culture top-of-mind.
A comprehensive, well-planned risk management program is vital to ensuring that a safety culture thrives and contributes to a company’s bottom-line. Companies that embrace a go-the-extra-mile approach are focused on building a safety culture dedicated to excellence and quality that aims to be best in class instead of merely maintaining minimal levels of compliance or standard practices. Best-in-class companies get the best insurance rates from underwriters.
Meeting minimum compliance threshholds includes basic elements such as safety inspections, mock OSHA audits, compliance training (hazard communication, fall protection, etc.) and formal discipline for unsafe behavior.
Standard practices enhance the safety culture benchmark by including near-miss investigations, new employee safety orientation, drug testing and motor vehicle record review, and the often-overlooked job hazard analysis. In addition, having an active safety committee and accountability program, prequalifying subcontractors, and implementing effective policies and procedures all work toward achieving a lower risk score and becoming a better manager of risk.
Implementing a best-in-class strategy is a long-term commitment to continually assessing, setting SMART (specific, measurable, attainable, relevant and timely) goals, and reassessing the company’s safety culture, which works to lower risk scores while maximizing opportunities for new business. Beyond conducting pre-employment assessments and an annual review of policies and procedures, new-hire orientations and training programs should be frequently reviewed. Root cause incident analyses can pinpoint potential safety red flags. Companies can also take the pulse of their workforce through perception surveys to build a better culture as well as through safety empowerment training and a supervisor development program.
At the end of the day, risk management is key to ensuring a business stays on track from hiring qualified employees through to ensuring they stay safe on the job. Becoming a best-in-class manager of risk not only helps companies save time and money, but significantly improves their ability to acquire profitable work.
Dennis Tsonis is senior vice president and construction practice leader at Arizona-based Lovitt & Touché, one of the largest independent insurance brokerages in the United States and the first provider in Arizona to offer a Cost Reduction Technologies machine.
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