Management Matters: is a New Article series dealing with the issues that arise when managing personnel and how to optimize your current staff in a company.
Reducing Workers Compensation Costs
January 1st, 2008
Workers’ Compensation Claims are a costly business expense, and have risen 27 percent in the last four years, according to the U.S. Department of Labor. Dealing with workers’ comp claims and reducing their occurrence and their cost can help cut business expenses and strengthen the bottom line.
Businesses spend an average of $26.86 per hour for each employee on salary, benefit expenses such as health insurance, vacation time and workers’ compensation benefits, according to the Labor Department’s 2006 Bureau of Labor Statistics report. Of an employee’s hourly compensation, about 1.8 percent (.14 cents) goes toward workers’ compensation. Those costs vary depending on an employee’s classification, among other factors.
Workers’ compensation costs can be determined by: Job classification, pre-claims programs, level of insurance offered, performance of regular safety checks, reinforcement of safe working behavior, emphasis on safety procedures, instruction manuals that detail safety procedures, employee education and training, employer’s safety record, elimination of hazards that cause injuries and return-to-work programs, among other factors.
AllBusiness.com recommends that businesses may change to help reduce workers’ comp claims overall: