Employees are the principal foundation of all companies. It is important to realize that there are many different types of employees and the ones you choose to hire will significantly impact how well your business is run. In other words, hiring motivated and well-rounded individuals will reduce expenses, and hiring incompetent ones will cost your company numerous losses. At Metropolitan risk, we never stop thinking about your issues and looking for ways to improve your bottom line. In our research we have found that effectively managing your HR practices can successfully achieve this. Yes, quantifying the mechanics of HR practices can seem vague at times, which is part of the reason many executives do not have a full understanding of the actual costs. However, to help clarify this situation, we have provided abasic quantitative guide that will make you more aware of your HR expenditures, and save you both time and capital.
Although employees should always be treated with respect, as an executive it is also important to view them in terms of their productivity. There is no denying that there are disparities in proportional productivity and salary for various employees. For example, an employee getting paid $60,000 and generating $100,000 per year for a company is much more valuable than an employee guaranteed $50,000 who is fired after one month on the job. If you ignore losses that result from HR practices, such as the $50,000 loss in the latter example, they can accumulate and put your business at risk. Contrarily, if you recognize the costs of your HR practices and identify where there is room for improvement, your business will experience multiple financial growth opportunities.
Along with creating a great workplace environment, in order to ensure a high number of motivated and productive workers, you must also invest additional funds in to lowering the costs of your HR practices. Good employees want to work for companies that hire capable coworkers and that are proactive in taking advantage of opportunities to make profits. Here are some questions you might want to consider when thinking of the best ways to invest in lowering your HR costs:
How much are you willing to invest to keep good employees working for your company (incentives, promotions etc.)?
How much cost are you willing to incur to keep poor employees?
How much are you willing to spend to maintain an HR management system to track performance improvement for employees?
How much are you willing to invest to drive down employee claims?
How much are you willing to invest to drive down your workers’ comp experience mod?
Although at first, it might not seem enticing to spend additional funds, in the long run, your business will experience significant gains due to an overall improvement in the management of your finances. Think of it as investing in long-term security with a permanently positive ROI.
Employee payroll is the third highest expense for companies in the United States(the first for small businesses). You want to make sure that you are making effective use of this cost and not wasting money on unproductive resources. If you feel that your company can use help in this financial area, please click here to get your free HR Expenditure Guide and get in touch with a Risk Advisor.
A false workers compensation claim is more common than you might think. The sooner you call the sooner we can help you work through it.
The workers’ compensation insurance system is a no-fault method, paying workers for medical expenses and wage losses from on-the-job injuries. Billions of dollars of false claims submitted each year, says The National Insurance Crime Bureau. In New York, insurance fraud looked at as a felony that most perpetrators aren’t aware of when deciding to game the system. Further, it’s the number issue most business owners raise with us when we are invited into their organization to check why their workers compensation insurance costs are so high. When business owners invite us into their organization to evaluate why their workers compensation insurance costs are so high, its typically the number issue.
Most employers face not only being vulnerable to workers compensation fraud but actually contributing to it as they don’t have the correct policies and procedures in place to help prevent fraud from starting in the first place. To help detect a possible false workers compensation claim, experience shows a claim may be fraudulent if two or more of the following factors are present:
Telltale Signs of a False Workers Compensation Claim:
Monday Morning: The alleged injury occurs either “first thing Monday morning,” or late on a Friday afternoon but not reported until Monday.
Employment Change: The reported accident occurs immediately before or after a strike, a layoff, the end of a big project or at the conclusion of seasonal work.
Workers Comp Fraud
Job Termination: If an employee files a post-termination claim:
Was this injury reported by the employee before being unemployed?
Did the employee exhaust his/her unemployment benefits prior to claiming workers’ compensation benefits?
History of Changes: The claimant has a history of frequently changing physicians, addresses and places of employment.
Medical History: The employee has a pre-existing medical condition that is similar to the alleged work injury.
No Witnesses: The accident has no witnesses, and the employee’s own description does not logically support the cause of injury.
Conflicting Descriptions: The employee’s description of the accident conflicts with the medical history or First Report of Injury.
History of Claims: The claimant has a history of numerous suspicious or litigated claims.
Treatment is Refused: The claimant refuses a diagnostic procedure to confirm the nature or extent of an injury.
Late Reporting: The employee delays reporting the claim without a reasonable explanation.
Hard to Reach: You have difficulty contacting a claimant at home, when he/she is allegedly disabled.
Moonlighting: Does the employee have another paying job or do volunteer work?
Unusual Coincidence: There is an unusual coincidence between the employee’s alleged date of injury and his/her need for personal time off.
Financial Problems: The employee has tried to borrow money from co-workers or the company, or requested pay advances.
Hobbies: The employee has a hobby that could cause an injury similar to the alleged work injury.
Suspicious about a claim possibly being an example of workers’ compensation fraud? Don’t hesitate to call us at (914) 357-8444 or CLICK HERE and run your challenge through one of our Risk Advisors. Our staff will perform digital surveillance on your case without having to spend big money on a potential stakeout.
Employers can provide their employees a return to work evaluation form to give to their physician when the employee suffers a work-related injury. The form can facilitate communication between the treating physician and employer as to the employee’s status and capabilities. Many employers miss this step.
We encourage employers to send the physician the employee’s current job description AND a job description for a alternative duty position for which the injured employee might be eligible.
What is the importance of a return to work evaluation form?
It’s difficult to action plan the claim and get the employee back to work when there is no clear understanding of the employee’s injury AND job duties. This form along with the job description helps establish the base line so all stakeholders can work in concert. This will get the employee back in some productive capacity.
Why should an employer provide this evaluation form?
If an employee is injured, they may not be able to perform their original duties. This return to work evaluation form helps the employer create accommodations enabling the employee to come back to work at the best of their ability.
A frequent (and very costly) mistake employers make is bringing the worker back too fast without having them medically cleared to perform their duties. We recently had an employer tell us their worker was injured playing softball for his recreational team on his own time. The employer never noted the incident formally in their employment records creating an incident. Further they never had the employee medically evaluated to see how severe the injury may have been. Nor did they have the employee medically cleared to come back in the same capacity. Instead he took a day off, came back to work too early. Sadly, he threw his back out on the job further, exacerbating the injury. Had the employer properly recorded the incident and had the employee fill out an injury form this would not have become a comp claim.
The original injury was non-compensable as it did not occur at work. It became compensable when he returned to work too early and made the injury worse. Following proper procedures and utilizing a return to work evaluation form would have gone a long way in preventing this type of situation from occurring.
What’s the impact on your workers compensation premiums by using a return to work evaluation form?
It creates a formal process around employee injuries that accomplishes several cost savings benefits:
Prevents employees from coming back to work too soon. This saves you from driving up injury rates and costs as the injuries usually become worse.
Facilitates very productive communication between treating physician, injured employee and your company’s HR staff person.
The goal after every employee injury is to get them back to work in SOME capacity as quickly as possible. This cuts down on the ultimate cost of the claim. Too often we see employers simply file the workers comp claim with their carrier then walk away and go back to their regular scheduled programming. Then their experience modification factor gets re-calculated which may result in significant workers compensation premium surcharges.
Can employees abuse the return to work evaluation form?
Employees can abuse this only if the employer allows it to happen.
If the employer:
Meets with injured employee every 10 days to check in on their healing progress
Makes it clear that the accommodations aren’t temporary
Allows open communication to provide the best accommodations and transition phase possible
Follows up with the physician
There should be no possible chance that the employee would abuse the return to work evaluation form. Truthfully, we see far more abuse when employers have no form and no process for getting the worker back on duty.
Want an example of a solid Return To Work Evaluation Form ? Click here
“Do I really need to write job descriptions?” We are asked this question constantly when we are setting up a workers compensation cost containment program. We say absolutely if you want to distinguish yourself AND save big bucks when you purchase workers compensation insurance! Job descriptions are by no means required by the Dept of Labor, but they are enormously important to smooth and successful recruiting, hiring, and workers compensation claims processes. They assist applicants in better understanding the position beyond the typical bullet points of a job posting.
Hiring & Recruiting:From the initial job post on various posting sites like www.INDEED.com, to the interview and hiring stage it’s so important to be specific and communicate to your potential new hire/employee exactly what is expected of them. Typically a business is not hiring a one off for this position as they will most certainly hire more employees for this role in the future. Rather than re-invent the wheel, spend some time and really drill into the job description. It not only helps your potential hires select right fit for them, it will also help you think though what you want in your future employee.
Employee Injuries: We did an article about the most underutilized tool to gain a competitive advantage, this post might seem familiar. It was all about setting up a Return to Work Program also know as Transitional Duty. This is an extremely effective tool in controlling workers compensation costs. One of the more important components of the Return to Work program is having a proper job description whereby your staff, the insurance carrier adjusters and the treating physicians can get a full understanding of what is entailed for your injured employee to execute their job function. In absence of a thorough job description often times the treating physician will not authorize medical clearance for the employee to return to work which drives your workers comp costs up significantly. Further your staff and the carriers adjusters if they are fuzzy on job execution they will often arrive at the wrong answer.
It’s helpful if you have job descriptions already built for your potential alternative duty position too so the treating physician might consider this alternative duty job in lieu of their present job. If you want to know more about building out your own Return To Work Program CLICK HERE
Defining exempt vs. non-exempt: Job descriptions are key to determining if a position qualifies as exempt (a.k.a. salaried without overtime) under the law. Actual duties, not titles, drive this determination. A job description that accurately reflects the realities of the day-to-day functions of a role can help you defend against any claims that an employee is being improperly denied overtime.
Identifying “essential functions”: The Americans with Disabilities Act (ADA), as well as many state anti-discrimination laws, requires employers to provide reasonable accommodation to employees with covered disabilities, provided the employee can perform the essential functions of the job. A well-written job description is key for identifying those functions that are essential versus those that are marginal, incidental, etc.
Protecting against discrimination claims: Using job descriptions to compare an applicant’s experience, skills and credentials to the minimum qualifications of the job can aid in protecting an organization against claims that it excluded someone based on race, age or other protected class. Skills and requirements should be identified as minimally required or preferred so it’s clear who meets the bona fide job criteria and who doesn’t.
Need more information on job descriptions? We have a job description tool builder as part of our THINK HR platform which is free to customers of Metropolitan Risk. We would love to answer any questions you have and assist you in developing them for your organization. Contact Metropolitan Risk today at (914) 357-8444 or click here!
Simply put, the insurance claims goals between most commercial insurance buyers and the carrier / brokers heretofore named the insurance marketplace are misaligned.
Which Way ?
The goal of a savvy insurance buyer is to transfer as much risk to the carriers for the least amount of insurance premium. Most forget the first part, but that’s a whole other blog article. The goal of the insurance carriers is to charge as much over par as they can get from each insured ultimately driving their profits up. The brokers who place most of the policies are on the same food chain as the insurance carriers as their commission increases with the insurance premium. This classic tug of war is centuries old and describes most functioning marketplaces irrespective of the product or service.
Here’s the difference; you can gain much more control over the system that has been tilted for years against you. What drives your insurance premiums are your claims . Understand that when your premiums go up you are in effect rewarding your insurance broker for mishandling your account as they get a raise and you lose valuable profits. This happens because no one is focusing on the root causes and frankly why should they when the stakeholders on the other side are richly rewarded . Understand that when you have insurance claims you drive up your cost by allowing the insurance carriers to surcharge you , which in turn drives up your insurance brokers compensation. Hence the misaligned goals ; yours versus the insurance marketplace.
When we meet potential new clients many make the same statements in our initial meeting. Our insurance costs have risen dramatically from last year to this year which took us completely by surprise. Further our previous carrier has cancelled us, our broker gave us 2 quotes that were substantially higher and said “there is nothing they can do, you have too many claims”! You are forced to make a six figure purchasing decision usually within 48 hours of losing your coverage.
Whose fault is that? We would argue it’s the buyer that continues to purchase their insurance from the same brokers instead of demanding more. More data , quicker so you can proactively manage the risk components inside your business that are driving your costs. Having this information faster , more timely then allows you to deploy resources up front fixing the pain points in your business before your cost escalate dramatically , impairing your competitive position.
Understand insurance premiums are a very poor lagging indicator. They reset only once a year and are underwritten based on your companies 5 year historical claims data which moves up throughout the year ; silently. Generally over time reserves and payouts increase which is called loss development. What we see sadly time and time again is the folks who purchase the insurance look at this data only once a year, at renewal time which is way too late. That’s like applying for a mortgage on a home only to find out once your in contract that your credit score is a mess. Too late as your stuck with the mess and all the increased cost.
Unfortunately most businesses only look to their brokers to process a transaction rather than helping them build systems , metrics and accountability that drive results and not simply poor outcomes. The good news is really well run organizations have figured this out and have put these systems in place which is giving them a huge advantage in their risk based costs making them more competitive than the also rans.
The vast majority of the insurance broker community has failed their clients simply because it’s not in their best interest to help them prevent and manage claims. The commercial insurance buyers have failed themselves because they haven’t realized how their goals and the insurance brokers goals are misaligned , and have not held either their insurance brokers or carriers accountable for helping them manage risk , not buy insurance.
This November as you head to the polls we urge you to hold your lawmakers and politicians accountable instead of complaining about how incompetent and dysfunctional Congress is. While your at it don’t simply complain about how high your insurance rates are, vote for yourself and chose a broker that has a strategic plan and resources to help you prevent and manage claims rather than simply let you purchase overpriced insurance policies. It’s your future, just sayin…..
Multi-tasking is an everyday occurrence in businesses and is in most cases a necessity in order to get things done in a timely fashion. Author Steven Berlin Johnson describes multitasking as “skimming the surface of the incoming data, picking out the relevant details, and moving on to the next stream.” Skimming is what people do when they look at their receipt when leaving the grocery store, not what you do when balancing your company’s checkbook and reviewing P&L data. Here is some bookkeeper for business advice.
When deciding what is better for your business, ask yourself if consolidation of daily tasks is the answer. Do you want your in-house bookkeeper answering the phones, assisting clients, or doing HR all day ON TOP of the bookkeeping? Probably not! The assembly line automation was popularized by Henry Ford. The idea was that “hiring a specialist to perform a specific function creates a lot of efficiency.”
Things to consider about a bookkeeper for business:
This 3rd party service is a vendor that can be replaced. They want your business, so it is implied that there will be an expected level of customer service in order to keep the account.
Bookkeeping services are like any other business. They compete and they need to stay ahead of their competition in order to win accounts. They do this by constantly setting themselves apart and creating innovative ways to provide you efficient and accurate service.
Consistency. If something happens to your in house bookkeeper, what is the protocol? One day, maybe two days is manageable. But what happens if it’s longer than that, or they just up and quit? Bookkeeping services have built in processes to handle this and it is off of your plate so that you will get the SAME level of service no matter who your representative is.
Think of what tasks you have on a daily, weekly, monthly, or even quarterly basis. As an employer, you are responsible for:
Accurately calculating employee earnings and handing out paychecks
Deciding on tax withholdings and payroll deductions
Keeping current on new regulations, tax rates, filing of taxes, personnel issues and other payroll variables.
Beyond all of this, there is the small aspect of running, and ideally growing the business. Why waste your time on performing these functions when you could hand this off to someone like our friend Kandi Brem at www.Brembookkeeping.com, whose ONLY focus is making sure all of this is accurate and that the lights stay on. I am sure you can find better ways to use that time on things like improving your product or service, increasing revenue, and hiring talented employees.
Do you ever wonder how successful people consistently achieve their goals? Have you unlocked why you achieve certain goals while others fall short? Do you want to transform goals to achievements?
Many companies start the new year with new goals and aspirations, some of the most common being:
Reduce Costs
Retain Clients
Increase Profits
Improve Employee Safety
Improve Employee Morale
The most common mistake companies make in outlining such objectives, however, is not providing enough details and specifics. This ambiguity is often at the root of most failed goals, but it is not the cause. Most of us have heard of “writing down” our goals or cutting out pictures of the visions of our successes and making a “collage” and posting it, where we can see it every day and remind ourselves of where we want to go. This practice may seem impressive, but it doesn’t ensure that we will be successful because we haven’t focused on the most important factor . . . HUMAN NATURE!
As Chip and Dan Heath wrote in their book Switch, when significant change is involved in accomplishing your goals, you must appeal to both sides of the brain:
Emotional
Rational
AND, you must influence all three of these areas:
Environment
Heart
Mind
Most of the changes we’re referring to require a significant adjustment in behavior. If you don’t allow for this, you are doomed to fail, and HUMAN NATURE is such that it resists these changes. An example would be the common goal of weight loss. Anyone can eat just fruit and veggies for one or two meals and maybe even one or two days, but eventually the sheer willpower needed to continue on this path will wear off and “poof” there goes that plan! What’s essential for success is appealing to these two sides of the brain: Emotional and Rational. The Rational side tells us it makes “sense” to do something. The Emotional side ACTUALLY does it.
A few years ago I met John, a client, and he was in the midst of dealing with a major challenge in his business. John had maintained a successful plumbing business that he started by himself when he was just seventeen years old. From humble beginnings, John found something he was good at and kept doing it. As the years went by, he added one employee at a time, and before he turned around, he had more than eighty people working for him, and sales exceeding $10 million per year! The problem was that John was working at least eighteen hours a day and constantly chasing many aspects of his business. John’s company completely lacked efficient systems and a cohesive structure, and while he was “successful,” he was also “exhausted.” He knew that this pace was unsustainable. Something had to change or he would have health problems or have to sell the business. John finally turned to taking on a partner, Anthony, to run the “accounting and operational” sides of the business, which was certainly a step in the right direction. It was just the beginning, however, for he had only dealt with one of the areas necessary for significant change: Mind. In fact, he never changed the environment. All his employees and culture remained the same, and he also never changed his heart. He saw his new partner as a “magic bullet.” John continued to do business and manage his operations exactly the same way. His attitudes and operating behavior never changed and, accordingly, Anthony was constantly putting out fires and looking backward at what wasn’t working and what was wrong, and never had a chance to build to the future and restructure. Ultimately, John was defeating his own partner and goals because he wasn’t fully committed to change.
Without appealing to BOTH sides, when the going gets tough, the “emotional side” will get going and leave all “rational” thought behind by falling back into the habits that feel comfortable.
The 3 Essential Keys to transform goals to achievements :
Specifically direct the Rational part of the brain by scripting the initial steps in the new work process along with a clearly outlined step-by-step process (a decision tree of sorts).
Then motivate the Emotional part of the brain by being specific in the GOAL and what the goal LOOKS and FEELS like. Doing this will empower the emotional side of the brain when the tough and challenging times come. And they will come! You need to realize that the challenges and almost “failures” will happen, but be aware that they are not “failures”—rather, they represent the education that is needed to perfect these changes.
Shape the path that will direct the team through the challenges along the way and what guiding principles are needed to stay on track.
All in all:
The START is scripted. The GOAL is specific on how it will feel and look. The path between START and GOAL is impossible to know completely, so you must have your guiding principles in place and stay on the PATH.
I spend most of my time helping companies deal with a very common challenge —employee injuries and the claims associated with them. This problem is even more common for such industries as construction, manufacturing, healthcare, and transportation, where the simple act of opening their doors to do business involves an innate “risk” associated with practically every aspect of their work. These companies certainly don’t want their employees to get hurt, nor do they want the added expense that goes along with paying for the medical care and lost wages associated with these injuries. If I were to merely indicate how much it’s costing them, I would only be appealing to the Rational side of their brain. Conversely, if I were to only explain that these injured employees have families, I would only be stating the obvious—no one wants to hurt someone’s family. I would only be appealing to the Emotional sIde of their brain. At Metropolitan Risk, we use a series of analytics to determine:
What is currently happening and identifying any trends—FACTS
What it’s costing you—RATIONAL
What opportunity/opportunities are available to you to handle these issues—EMOTIONAL
What you need to do—ACTION PLAN & LEADERSHIP = SHAPE THE PATH
I had the opportunity to listen to Tony Robbins speak for the first time this past month. He spoke for nearly 3 hours about the power of “engagement” and how it can help you gain a competitive edge in both your business and personal life. Being in risk management, he certainly got my attention when he rattled off a few statistics:
“Work units in the top quartile in employee engagement experience:
It certainly makes sense, right? To put it simply happier employees are more likely to be focused and want to perform better. They’re also less likely to take advantage of their employer. But like me, you might have some questions such as, what exactly is “engagement”? How is it measured? How can I get it? When I got home I took a deep dive in to Gallup’s 70 page study on the subject. Like me, you might be shocked at some of the statistics within it.
Unfortunately this is a question facing both interstate and intrastate trucking companies whose home office is in state “A” but they operate in states B,C,D,E. etc… These companies face what is called Multi-State Exposure. This occurs when a driver gets injured on the job in a different state from which his company is domiciled. What nobody tells these companies is that the driver has the ability to receive benefits from more than one state on your dime!
Competitive rates for Workers Comp Insurance in the trucking industry are difficult to obtain due to the difficulty the underwriter faces assessing the risk. Add multiple state workers comp laws into that equation and you have a recipe for high premiums, open claims and payouts that are double and even triple what they should be.
When an out of state claim happens, two jurisdictions come in to play. If the claim is handled by the company’s home state the driver will retain legal counsel in the state in which the injury occurred. Once qualified to receive benefits from the home state, the driver can go the state where the injury occurred and receive additional benefits. This is known as “Piggybacking.” This is the cost of not fully comprehending the Workers Comp Laws in the states you operate in and this can certainly be an expensive lesson.
