Tool Box
Issue No. 32 - December/January
Hidden profits
by Mr Shayne Bakewell
Whether it's more day-to-day stress, the ageing workforce, unsafe workplaces or the odd employee looking for an easy ticket, workers compensation costs just seem to keep growing.
While the day to day claims are pushed aside to your insurer, more and more employers are struggling with crippling workers compensation premiums that take huge chunks out of operating profits and cash flow.
Each year most Australian employers pay workers compensation premiums based on both their industry and company specific claims history. In many cases these premiums can slowly - sometimes rapidly - spiral upwards. Premium rates of 5%, 10% or 15% of payroll are not uncommon.
These are real costs. They are costs of doing business. They reduce profit. There is also a cost to the employee and a cost to society.
For some reason, because an insurer is involved, many businesses think that the cost is fixed and cannot be controlled or reduced. As a result, workers compensation costs ramp up without a thought - in some cases by hundreds of thousands or even millions of dollars each year.
If you were given a choice of applying a change that would result in a dramatic and long-term reduction in your workers compensation premium would you do it? If that change improved your relationship with employees would you do it?
The untold story about workers compensation management is that a large proportion of costs are completely unnecessary and controllable.
Claims occur for all sorts of reasons. Often the employee is “at-risk” because of their personal situation (e.g. stress at home, bullying at work, drinking, marriage break-up, drugs etc). Most businesses fail to see this risk before it becomes a problem - a workers compensation claim.
What then follows is a costly 'claims cycle' of medical intervention, rehabilitation, paper shuffling and legal costs - which does nothing but frustrate everyone and push premiums higher. The manager...
