If you own a landscaping company, simply finding new employees these days is likely to keep you awake at night. The job market is so tight right now that very often the vetting process becomes an afterthought to making sure you have enough folks on any given job. But this can create a temporary solution that leads to bigger problems down the road.
When it comes to hiring, it’s important to understand the risks. One of the biggest issues affecting business owners across the board as we emerge from this pandemic is that the market is hardening. We are looking at higher premiums; more conservative underwriting; and fewer insurance companies willing to write certain lines of coverage. Ask yourself: What is the driving record of new hires? Will it affect your insurance rates? Do you have time for safety training? What if a new employee suffers an injury? Are they the type to sue?
These are serious considerations, but by following a few tips, you can help decrease the risk associated with new employees.
- Hire Right. Conduct extensive background checks, including driving records (more on this below.) Also require a post-offer pre-employment physical conducted by a medical professional who knows what the potential employee’s job description will be.
- Conduct Safety Training. Once on board, make sure employees have the proper training, including hazard awareness. If your team doesn’t know specifically where danger lurks, you can bet they will stumble upon it. You must drive safety messages home constantly. From a training perspective, the rule is one must hear something seven times for it to be ingrained in your mind. So repetition is huge. That’s why we see the same commercial on TV, or hear the same ad on the radio, a half-dozen times per day.
- Enact Written Driving Policies. There’s no escaping it: you assume liability when employees operate your vehicles. It’s your name on the truck, no matter who the driver is. Have a written company fleet usage and driver safety policy. Is your insurance coverage appropriate for the size of your company? Fortunately, advances in technology allow you to focus on your employees’ driving habits to the point where you can track the employee’s route, how fast they’re going, where they are, how long they’re there, if they’re idling the car, and so on. All these help you discover what you would not otherwise know; is your employee violating your driving policies?
- Use Occupational Health Providers. When an accident happens make sure you investigate thoroughly and report timely. Create relationships with occupational medical providers, which can reduce a medical bill by 30% on average compared to emergency room visits. When possible, avoid the emergency room for worker injuries. There are times when employees go to the ER for a doctor’s note and the doctor will say, “How much time do you want off?” As a business owner, this is not a conversation you want to have happen. It’s critical—both for your company and workers’ comp costs—that the doctor at least knows what this person does for a living, which is why aligning with an occupational health provider is essential.
- Implement Recovery-At -Work. Occupational medical providers not only reduce bills, but can expedite receiving care and then getting back to work. Also beneficial to minimizing downtime, in some cases, is the use of a nurse triage, where the seriousness of an injury is diagnosed either online (something we’ve all grown used to over the past year) or via phone. It’s also important, when possible, to have employees recover at work in a limited duty role. Implementing a Recovery-at-Work program has a significant impact on your workers’ compensation costs while also boosting morale. When employees recover at work you continue to pay them, therefore they are required to do tasks that are manageable for them and are not impeded by their injury. An employee sitting around his/her house watching personal injury lawyer commercials can be financial havoc for your company.
- Classify Properly. Whether it’s multiple new employees or a single major hire, a payroll increase may prompt a jump in your workers’ compensation premium. You’ll want to verify your payroll matches actual payroll records. One critical step in controlling your costs is to ensure all of your employees—especially those with split job functions—are properly classified. The National Council on Compensation Insurance (NCCI) classification codes are designed to describe businesses — and the risks associated with those businesses — as a whole. In most states there are 600-plus classifications. Landscaping services are often provided in conjunction with lawn care services and this work would fall to class code 9102. Misclassification can easily cost your company big money when it comes to your annual audit.
- Know Layoff Liability. On the other end of the spectrum, do you have to layoff employees at the end of the season? Numerous studies show when employers lay off large numbers of staff, workers’ comp injuries spike. When employed, people might tolerate injuries as part of their work, simply because they have a job. Now, if they have no job to lose, they file a workers’ comp injury report. As an employer, if you’re looking at lower payroll coupled with an increase in workers’ comp injuries, you have the perfect storm that will affect your Experience Modification Rate, or experience mod. The mod is a metric that insurers use to calculate the insurance premium. It takes into account the number of claims/injuries a company has had in the past, and their corresponding costs. An experience mod of 1.0 is the benchmark average. If a company’s experience mod is lower than average, (e.g. less than 1.0), their worker’s compensation premium will be lower than average. An experience mod number greater than 1.0 will result in a higher than average premium payment. Consider a No Injury Declaration to help protect your business in a layoff.
Be aware of what’s going on, what your potential losses are, and how to reduce these losses before they even happen. Injuries will happen. But when you create an overall internal program to hire well, train for safety, and address future injuries, you’ll experience better results. Plan properly with your agent to control your workers’ compensation costs; don’t let them control you. Your workers’ comp insurance is one insurance you can help take charge of.
Dibble is the Risk Manager for West’s Insurance Agency, Gumee, IL. She specializes in multi-line claims management, accident prevention, safety programs, and human resource administration lending her business acumen to both public and private sector operations over the years. Katie can be reached at [email protected].
Photo at top: iStock