Increased Worker's Compensation Rates due to Turnover...a Must Read...

An Organization's cost of Worker's Compensation Insurance is based primarily on their Experience-Modification (EMOD) which is derived from looking at 4-5 years loss history within a given business segment which is the baseline or 1.0 and then comparing your Organizations' loss runs against this cumulative average.  So if you're at 1.2 then it is costing you 20% more to do business and likewise if you're .80 then you can do business cheaper which is good thing right Mr. CFO?  Now there are other factors however this is the biggie for Underwriter's and the Insurance Carriers.

So rewind when the EMOD was introduced there was an average tenure of employment of over 20+ years.  Now we are seeing 3-5 yrs (Millennials maybe 3 yrs ask any HR Guru) ....okay are you seeing it yet.  Let me give you a little more information.....whether your a Risk Manager or Safety Professional we all know that the highest risk is in the first year, then small spike mid-employment and then high risk the last year.  In other words an Organization had 17 years (20 year tenure) of low risk and to absorb any losses.  Now we are looking 2 years (4 year tenure).  In other words, worker's compensation claims will increase.

That's why I created the Organization Point Average (OPA) as the process improvement to the EMOD.  Yes, OPA utilizes the EMOD however takes a holistic approach to the individuals within the Organization versus an objective look at the Organization, thereto.  OPA also takes into account the employees credit score, their body mass index (BMI) which when combined to the EMOD accounts for 70% of their OPA Score with other factors such as age, marital status, etc. that determines risk for loss. 

This is a cumulative score of all the employees and the employer's only see the organization score not individuals.  It's like asking your child how's school versus what's you're GPA. OPA can also be used to compare the overall Culture within an Organization by potential employees, investors, creditors, partners, competitors, etc.

So with this in mind, retention is the White Elephant in the room.  What Organization's can do is to be aware of this and understand that we need them more than they need us. They can also look at increasing credit scores (like a built in raise), maintain a health workforce (obesity is now classified as a disease), as well as ways to make additional products/service convenient (on-company time), mobile (bring these products/service to the work-site), and offer them at a savings (organizations can pay for, pay a percentage, payroll deductions, or at least negotiate discounts). 

Organization must look beyond the brick and mortar wall to change behaviors!! 

Visit www.WorkLiv.com for more information or email me [email protected] .