The Close Connection Between Workers’ Compensation and Safety Incentives at Work

The Close Connection Between Workers’ Compensation

Workplace safety is a matter of utmost importance for both employers and employees. A safe working environment is one where all can function with the peace that chances of accidents or illnesses are minimal.

Another crucial aspect of occupational safety is the confidence that comes from knowing there is a cushion to lean on in case of unforeseen events. Yes, we are talking about a well-defined workers’ compensation insurance program.

Every US state (except for Texas) requires all private employers to have such a program in place for their employees’ well-being. Workers’ compensation also protects the employer from unexpected financial strain.

Most importantly, it can help in promoting a safe workplace. In this article, we will discuss the close relationship between workers’ compensation and workplace safety incentives.

Workers’ Compensation Protects Workers’ Rights and Well-Being

Before the law regarding workers’ compensation was in place, employers were not held liable for injuries under different circumstances. For instance – if a worker was responsible for their accident due to negligence or carelessness, the employer did not have to compensate for the losses.

Also, if a fellow worker was the reason behind the accident, the employer would not be the liable party. This has vastly changed now, where the employer’s only chance at attracting and retaining skilled labor is to have a workers’ compensation scheme.

This scheme is especially needed across high-risk industries. As per the National Safety Council, these include construction, education, healthcare, forestry and mining, and logistics. Employees within these industries are aware of the risks involved, at least to a certain extent.

With a good workers’ compensation program in place, a company can create the image of a responsible employer who cares about their workers’ health and safety. According to Western Republic Insurance Services, employees can receive benefits like lost income, ongoing medical care, rehabilitation, disability benefits, etc. 

Moreover, their family will also be taken care of via death benefits if the worst-case scenario takes place. Workers’ compensation only encourages the employer to practice rigid safety protocols. After all, claims are unpredictable and can cost more than expected. As a result, the employer would be careful to apply the adage, “prevention is better than cure.”

Safety Incentives Tied to Workers’ Compensation Benefits

We just mentioned that workers’ compensation encourages employers to prioritize safety to avoid hefty claims. Now, a reason why employers must establish a solid workers’ compensation program is the fact that its benefits are closely tied to safety incentives at work.

In other words, companies stand a chance of securing premiums at discounted rates for implementing successful safety incentive programs. Since such programs reduce the risk of occupational accidents to some degree, the employer will appear as a low-risk candidate in the insurer’s eyes.

Ways to Implement a Successful Workplace Safety Incentive Program

Besides worker safety, there are many other benefits of a workers’ compensation program based on how it works. You can click here to learn more on the subject. In this section, we will discuss five ways to implement a successful safety incentive program.

Hiring Third-Party Safety Consultants

Sometimes, employers fail to establish a solid safety incentive program because they lack a clear picture of their company culture. A safety consulting firm can help in this regard. The consultants will assess the unique needs of the company and develop a plan to motivate employees towards safety.

Using Rewards and Recognition

Rewards, be it monetary or otherwise, are good, but they may not be enough. Employees also wish to feel seen, recognized and appreciated for their efforts. This is why acknowledging them in front of other members is a must. On that note, creative rewards may be introduced, like a day off passes, brunch with the boss, or double break time for a week.

Making Reporting a Priority

The sooner an occupational accident is reported (no matter how minor), the better. A significant part of a safety incentive program is to let employees know that timely reporting is a priority. Rewards can be offered for maintaining the lowest number of incidents.

Providing Adequate Training

Rewards are necessary and good, but the safety incentive program will run out of steam without regular training. Employees will experience a greater sense of responsibility and achievement when they receive training as per the latest industry standards.

Encouraging Participation at All Levels

The most successful safety incentive programs are those that receive the support of company leaders. The higher management must then pass on the details to the managers and supervisors. Every member of the organization must be on the same page to address safety concerns at the earliest.

The workers’ compensation insurance market is expected to reach a value of $825.5 billion by 2030. It is currently growing at a CAGR of 4.8% as employers across industry verticals use it for workplace safety and financial security.

When companies remove participation barriers and garner support at all levels, they can extract much value from their compensation insurance scheme. What’s more, is that they will be able to reduce turnover rates and attract the best talent.

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