Insurance costs are always a significant chunk of spend for any project — anywhere from 4-8% – and the insurance news hasn’t been great for the last decade, with premiums increasing significantly every year. And even though worker’s compensation insurance rates have remained stable and even dropped in recent years, they’ve still at a fairly high level. It says a lot that many construction companies will be relieved to see increases in the high single digits and low teens — we’ve seen years of significant double-digit rate hikes that can cripple your bottom line before you even break ground.
So, construction companies would do well to evaluate their insurance costs and devise a strategy to position themselves to qualify for lower rates in the future. One way to do that is to lower your experience modification rating, better known in the industry as EMR. Insurers weigh a number of factors — payroll, job classification rate, claims made over the past three years, etc. – when calculating the score. An EMR of “1” means you’re right in the middle of the pack as far as risk is concerned, so you’ll likely get the standard rate, absent any special discounts. The goal is to go low. A score of less than “1” means your risk is lower than average, so you should get a lower than average rate. More than “1” and you’ll see your rates climb higher.
Lowering your EMR score is not a quick fix, because, ultimately, the best way to reduce your score is to reduce worker’s compensation claims, and the only way to do that is to strengthen safety.
The first order of business is to ensure that everyone on site is getting proper safety training. Understand, this won’t directly lower your score, but studies repeatedly show that strong, consistent safety training significantly lowers the recordable incident rate, and lowering the number of accidents over time will definitely lower your score. But to be effective, training has to include everyone, not just your direct employees. Subcontractor trade workers also need safety training, and nearly all general contractors provide it as part of their onboarding process. But in most organizations, that training is done in a way that doesn’t allow management much insight into quality, consistency or simple completeness.
The only way an organization can ensure that strong, consistent safety training is occurring is by tracking training and other key safety KPIs to identify where the program is weak, understand how safety trends are moving and address those weaknesses so that trends continue moving in the right direction.
For example, subcontractors are typically trained in-person by a supervisor on-site in a trailer before their first day on the job. Their attendance is recorded on paper, as are the results of a post-instructional quiz, if given, and those paper records get stored in a file cabinet. Unless a manager calls the supervisor to manually fetch those files, there’s no way to access the data, and there’s certainly no way that the data can be analyzed as part of a larger effort to track safety KPIs.
But there are additional problems beyond tracking with the way subcontractor safety onboarding is typically conducted. There’s no way to assess whether training is consistent from site to site and day to day. Plus, many subcontractors either do not speak English or do not speak it well — is instruction being given in a language that they understand?
Automating the subcontractor onboarding process can address all of these issues, and GoContractor provides an elegant solution. Instructional material in multiple languages can be uploaded to GoContractor, and then subcontractors can access training via any device. The solution tracks the result of safety assessments following instruction, all certifications and even who is on site at any given time. As a result, construction companies can save time — because subcontractors will be all trained up before they even arrive on site — and ensure that all subcontractors have the safety training they need to avoid injury on site.
Additionally, because they’re not constantly tied up providing safety training to subcontractors, safety managers gain additional time to walk the site more frequently. As a result, they are able to note more hazards and unsafe behaviors, which is one of the keys to reducing recordable incidents and, as a consequence, reducing EMR scores.
It’s a big step towards a stronger safety program, a lower EMR and, ultimately, lower worker’s compensation insurance fees.
If you’re ready to learn how top construction companies are using GoContractor to onboard workers across projects of all sizes, reach out today to schedule a free demo.
