Magazine article Risk Management

Safety Programs Alone Don't Work in Reducing Workers' Compensation Costs

Magazine article Risk Management

Safety Programs Alone Don't Work in Reducing Workers' Compensation Costs

Article excerpt

The workers' compensation system in the United States is in critical condition and sinking fast. Workers' compensation is rapidly becoming the number one insurance cost for many employers throughout the country. All 50 states are showing a workers' compensation cost in the billions of dollars with a total national cost in excess of $53 billion. In certain states, it has become an absolute crisis that is prompting insurance carriers to opt out of the market due to the high costs associated with particular regions. And as more and more carriers pull out of the workers' compensation market, employers will have to rely on such alternative funding methods as self-insurance or state pooling programs.

Unfortunately, the traditional safety approach typically used by business, the insurance industry and the states to control these escalating costs is proving to be woefully inadequate. These groups have failed to address the fact that the injury trend in the United States has significantly changed over the past 90 years. American workers are no longer experiencing the trauma-based injuries that were typically associated with heavy industry and unsafe work conditions. Today's injuries are subjective in nature, often with no specific cause to cite. The traditional safety approach that was developed in the early 1900s has endured even though the problem is no longer primarily a safety issue.

Current efforts aimed at controlling these costs by implementing workers' compensation reform legislation will also ultimately prove to be unsuccessful. While the current workers' compensation crisis has been fueled by attorneys and physicians who are soliciting clients, this has merely been in response to a market that, to a large extent, has been fostered by American management philosophies and work practices. Today, the American management style has produced a hostile "us versus them" work environment: How do we (the managers) get them (the employees) to do something that we want them to do?

For many people, the work environment offers the only place to experience a feeling of belonging to something outside the family. It's natural for a work environment to be a "social center" because people spend more time with their fellow employees than they do with their neighbors. It's a sad commentary on our society, however, that most workplaces only aggravate people's feelings of isolation. It may well be that the most important contribution of a good workplace is the social element providing a harmonious community in a society where few such opportunities exist. This is a major driving force in the workers' compensation crisis. The workplace has become a primary source of aggravation, frustration and stress in the American worker's life. Workers' compensation has become the vehicle for the employee to "get back at the boss and the company."

American businesses need to recognize that they play a major role when it comes to cutting workers' compensation costs, which are significantly influenced by motivational issues within the workplace. Symptoms of bad workplaces are all too familiar: the personal stress, the erosion of physical and mental health, the lower productivity. Everyone, after all, would prefer working in a pleasant work environment to an unpleasant one. Since most people spend the greater part of their waking hours at work, this is no small matter.

But pollster Daniel Yankelovich has gathered some impressive statistical evidence showing that, if anything, the workplace is getting worse. In a survey conducted in the late 1960s, Yankelovich found that more than half the respondents felt they got personal fulfillment from their jobs. By 1980, when the same question was asked in another survey, only 27 percent were able to say that their jobs were satisfying. Despite these figures, Mr. Yankelovich discovered that most Americans still want to do a good job. Over half of all working Americans still endorse the work ethic, agreeing with the statement, "I have an inner need to do the very best job possible regardless of pay. …

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