Workers’ Compensation Analytics

In terms of insurance spend Workers’ Compensation is amongst the most expensive for any organisation – and in Australia its a compulsory spend.

Organisations historically have paid limited attention to it simply because they have been told that it is difficult to control and equally difficult to understand. Essentially its been perceived as a complex black box best left in the hands of the experts. This misconception could not be further from the truth – like any risk to an organisation, team or individual, they can be monitored, measured and mitigated.

Typically, depending on industry risk factors, an organisation will spend in a year between 3.0– 7.0 of the total salary and wage roll on workers’ compensation costs. A serious incident or event can rapidly escalate this cost placing serious financial pressure on a business. Understanding the trends through analytics enables organisations to generate mitigation strategies through linkages with safety, human resources, legal and procurement to improve or completely remove risk.

A typical example would be the interaction between workers’ compensation analytics and procurement. In the majority of organisations these two areas are completely separate, however a decision in procurement can have a defining effect on workers’ compensation costs. When procurement departments understand the importance of their decision making, the cheapest is not always the best, better and safer outcomes can be achieved. Have you ever heard anyone in the workers’ compensation black box talk about the impact from procurement?

There are numerous examples where organisations have saved considerable amounts, not through the old age practices of claims management and claim reviews, but through the linkages that occur naturally in a business. The goal is not to create a large department or have expensive external consulting options. The goal is to create a bridge between different areas of your organisation to enable you to make decisions that are informed, focused and will result in a better, safer working environment for your employees.