Reduce Workers’ Comp Claims by Improving Hiring Practices
Recent research shows that length of employment is one of the most important variables in determining workers’ compensation claims. It ranks higher than age as a contributing factor. When there is an influx of new workers or when older workers return, there may be a greater loss-time frequency. This difference is especially significant as the economy continues recovering from the recession of the late 2000s. For workers who were spending their first month on the job, injury rates were as much as six times higher than average during that time period.
According to research, employees who were at a job for less than a year posed the biggest risk of loss, and the highest frequency of claims was among this group. This factor was not affected by age. Workers who were inexperienced had as much as four times the loss cost relativity. For those who had been working for two or more years at a job, the loss costs were significantly lower. Also, the number of claims was much smaller. However, claim severity was higher among older workers whether they were new or had been with the company for many years.
The best way to navigate these risks and offset the impact of improper experience is to develop a strong plan for recruiting, hiring and training workers. These are a few helpful controls to implement for pre-employment procedures:
- Thorough background checks that look at everything from financial records to criminal records.
- Verification of prior employment, education or other credentials.
- A mandatory drug test after offering employment.
- A comprehensive behavioral evaluation that looks at cognitive abilities, culture fit, job skills, abstract reasoning and critical thinking.
Random drug tests in the workplace can help discourage drug use by new or experienced workers. Also, it is a good way to reduce the risk of claims and losses during a new employee’s first and riskiest year. Developing a comprehensive safety and health plan will help address major issues. Understanding the links between employee selection, safety training and placement with claims will help HR managers and executives lower the severity and frequency of claims.
Also, keep in mind that risk management should never be abandoned after hiring. Safety and health can only be maintained in the workplace with persistence and perpetual training. While thorough safety training should be rigorous for new hires, it should be refreshed regularly for all workers. To learn more about this topic, discuss with an agent.
Let us help you make an informed decision about your workers compensation insurance needs. Our licensed agents specialize in helping small businesses obtain the best coverage at the best price, give us a call today at 855-780-1783.