The cost of insuring employees due to workplace injuries continues to rise. Many resorts have instituted the position of risk manager or safety director, but escalating workers’ compensation premiums can offset their success at reducing injuries. What can resort operators do to reduce this expense and realize value from the efforts of those who champion the cause? It all starts with a few simple steps.
How It Came to Be
But first, it’s important to know how we got here. Workers’ compensation in the United States has roots going back more than 100 years, to a time when working conditions were typically poor and workplace accidents commonplace. On March 25, 1911, a fire at the Triangle Shirtwaist Factory in New York killed 146 workers. Tragically, many of the factory exits were locked to prevent employee theft, a factor cited as a main cause for the high death toll.
The public outrage over the tragedy was a main rallying point for workers’ compensation legislation nationwide. Workers’ compensation was seen as the “Great Compromise” between labor and business. Employers agreed to provide indemnity and medical benefits without fault, and employees gave up the right to sue, making workers’ compensation the exclusive remedy for workplace injuries. This arrangement remains largely intact today. The price tag, however, has changed dramatically.
Paying a Premium
A number of factors determine the premiums paid by an employer. Payroll and injury, or loss, history play a large role. Somewhat hidden in the premium equation is the increasing cost of health care, particularly prescription costs and increasingly frequent non-invasive testing (e.g., CT scans and MRIs).
Payroll also continues to rise, due to performance increments or increasing minimum wage and its subsequent wage compression issues. As a result, we are subjected to workers’ compensation premiums that have far outpaced other premiums in the typical insurance portfolio.
So, are the industry’s hands tied? That depends on how the problem is viewed and, more importantly, how the resort handles the problem.
Pre-Loss Activities
There are two main ways to meet the financial challenge. The first, and most effective, is to understand the myriad options a resort can exercise before the loss occurs. We call these options “pre-loss activities.”
This starts with understanding the policy options given to the resort by its broker. The traditional guaranteed cost policy promises a fixed premium. However, it has become more difficult to acquire, and tends to be more expensive than other options.
There are a number of loss-sensitive policy options with lower cost projection than a guaranteed cost policy. These options put the resort in a position to have skin in the game, because the final premium is based, in part, on the actual losses the resort sustains during the policy year.
The remaining pre-loss activities involve actively managing risks, and these activities can be very effective. Most small resorts do not believe they can afford to hire a risk manager. Nevertheless, someone in the company should be responsible for loss control, compliance activities, and managing the programs associated with pre-loss. The goal is to create a culture of safety.
The cornerstone of creating a “safety culture” is to have written safety programs, and to conduct the associated training—which will be a majority of your pre-loss activities. These programs help employees understand the hazards of the job and explain how the work can be done in a way that minimizes the risk of injury.
The resort workplace is fast-paced and dynamic. Nonetheless, every employee should follow a regimented set of training programs specifically designed for his or her position. Doing so will help to set the employee up for success.
Examples of written safety programs include: Fall Protection Programs, Lockout/Tagout Programs, Hazard Communication Programs, and Blood Borne Pathogens Programs. These programs are usually large and can take time to develop, if done well.
However, there are smaller things you can do that provide a significant amount of bang for the buck. These are simple programs, initiatives, or best management practices that are easy to develop and implement.
Low-Hanging Fruit
A slip, trip, and fall prevention program is a small initiative with a huge return on investment. In my experience at Peak Resorts, I realized that a significant amount of injuries at most of our properties were related to slips and falls. To address this, we started by talking about—walking. Really? It sounds silly, so I prefaced every training session with, “I understand you’ve been walking successfully since you were about a year and a half old, however…”
It was essential to start the conversation to bring the issue to the surface. Next, we put a significant amount of pressure on snow and ice removal at the resorts. It is everyone’s responsibility to maintain walkways, doorways, decks, or any other public outdoor space where people walk.
Finally, we supply every employee who works outdoors with a traction device that is worn over the soles of his or her boots. We went through a variety of makes and models, but finally found a device that worked for everyone.
As a result of approaching the injury trend through discussion, action—and the added insurance of a traction device—the frequency of slip and fall injuries has decreased five years in a row. These injuries are now almost nonexistent.
Another example: institute a weekly safety message. Typically, this is a quick message that is relevant to most of the workforce at the resort, and is delivered at weekly staff meetings by the department manager or supervisor. Since we often inform our staff of upcoming events or operational changes at these meetings, why not take the same opportunity to address common safety concerns? The message can be a simple sentence or two. It can also be more detailed and modeled after the 10-minute “tool box talks” popular in the construction industry. The idea is that we’re talking about safety, as a team.
All Hands on Deck
Workplace inspections are a pre-loss activity that helps identify unsafe actions and conditions. Once identified, these are easy to correct before an injury occurs. You don’t have to be a risk manager or safety specialist to perform a workplace inspection, either. Department managers, supervisors, frontline staff, and safety committees should be the workhorses of this effort. By placing various skill sets and a different set of eyes into a workplace inspection, it’s amazing what you’ll find—and what’s been consistently overlooked.
While often misunderstood, safety committees bring individuals from many of the resort’s departments together. Their meetings are an opportunity to share information, collaborate on best management practices, develop buy-in for resort-wide safety policies, and to discuss injuries and near misses. Safety committees are an integral part of developing, drafting, editing, implementing, and reviewing your resort’s written safety programs as well. The committee members are an invaluable resource for spreading the safety culture at your resort.
Finally, leadership at the top level must set the tone. If senior managers disregard best management practices, safety polices, regulations, or committee meetings, the resort’s pre-loss activities become far less effective.
Post-Loss Activities
Most resorts do an excellent job of collecting data related to a guest injury on the hill, but lack the same process and attention to detail when an injury happens to one of their staff. After an injury occurs, there is a set of tools you can use to reduce the likelihood of the injury recurring, combat the cost of the claim, and limit potential future increases in premium.
The most common of these post-loss activities is accident investigation. The accident investigation should involve the manager or supervisor of the injured employee, and someone familiar with the investigative process: risk manager, an HR staff member, or even a patroller trained in incident investigation.
For greater impact, though, couple an accident investigation with a root cause analysis. This alone will provide a high rate of return. A root cause analysis is akin to treating the condition rather than treating the symptom. If your back aches from poor posture in your chair, the solution is not ibuprofen. The root cause may be a lack of physical conditioning, poor workstation design, or both.
If the resort can leverage the data gathered through the investigation, come to a root cause, and then address that issue to prevent a future injury, the resort raises its safety culture to the next level. Years of building on this success will drive down injuries, and eventually premiums.
Other options to consider in post loss activities include retraining, revising the job task, and claim management, including early return-to-work.
Retraining is a go-to solution in many cases, and usually involves revisiting the same training the staff member participated in at the beginning of his or her employment. Unfortunately, this can easily turn into a “name, blame, shame, and retrain” cycle, and that can adversely impact staff morale if it is the only tool used in the post loss arsenal.
Job task modification involves changing the way a task is done to prevent an injury from recurring. This tactic has been found to significantly reduce workplace injuries. However, it usually takes a very thorough root cause analysis to spur agreement on a modification, or re-examination of the existing job hazard analysis (JHA), if one exists at all.
About that … A job hazard analysis is similar to a recipe. It takes a task and breaks it down into each individual step. The JHA identifies the hazards of each step, and puts a control measure in place to mitigate each hazard. If the JHA is written well, an employee can follow that document and safely perform a task he has never done before.
One caution: When examining the feasibility of a job task modification, carefully analyze the change to see if it will introduce a new hazard.
Managing Claims
A return-to-work program is essential to keep claims costs down. In many cases, a claim will trigger unnecessary indemnity benefits (loss of wages) to an employee who can likely provide value to the resort and work in some other capacity, even selling tickets.
Finally, claim management involves the coordination of care and work between the injured employee, the adjuster, the treating physician, and the resort. If the resort is not involved in the management of care and the overall claim, the cost of the claim is guaranteed to increase.
The resort and employee are their own best advocates. Inform the adjuster about scheduling timely treatment, and inform the treating physician of the early return-to-work philosophy. Also, the adjuster and treating physician’s office need to communicate frequently and effectively to ensure medical approvals are made in a timely manner, and the associated appointment can be scheduled.
It is unlikely the industry will see relief from rising premiums without proactive efforts by resorts. The best way to safeguard against future increases is to implement pre-loss measures that prevent the injury from occurring. This shows those who insure us that we understand the benefits of a safe working environment, with a loss history to prove it.
Because the inherent risks of skiing will always be present, the resort’s post-loss activities will be instrumental in controlling the cost of each and every claim and, in the long run, assist in controlling premiums. In the end, it really is about preventing the injury. Every employee, from the GM to seasonal staff, needs to be responsible for his or her part in reducing workplace accidents. Create a culture of safety at your resort, and everyone will reap the benefits.
