Are you allowing insurance premium trends to "soften" your approach to preventing injuries and accidents? Or are you following the lead of the most astute risk managers and improving your company's financial results?
Regardless of the industry or corporate strategy, those risk managers have discovered that a culture that values employees, accompanied with a rigorous pursuit of loss prevention and safety, pays dividends through engaged, satisfied workers and low turnover. Forward-looking risk managers also are leading their organizations' efforts to protect their reputations and brands with clearly defined strategies that prevent regulatory actions.
A key is to understand how workers truly think and work to shape their mindsets, rather than take the traditional, rules-based approach to safety.
In 2013, there were some 3.8 million recorded accidents (Bureau of Labor Statistics) for a workforce of 155 million (Department of Labor). When you consider that the average work-related injury costs $38,000 (National Safety Council) to companies, we now have losses to America's industry around $140 billion, or almost 1% of the GDP. "Far too many people are still killed on the job - 13 workers every day taken from their families tragically and unnecessarily," U.S. Secretary of Labor Thomas Perez said when he commented on the 13% increase in fatalities to women and an overall workplace increase of 2% from 2013 to 2014.
Phil Walker, a national trial counsel for employers in California workers' compensation cases, predicts that cases will double within 10 years. It should be expected that the cost of accidents is going to continue to rise. Insurers will be forced to increase premiums, and providers will raise consumer prices if we continue to approach safety from the present paradigm.
Additionally, there is the risk of criminal prosecution. A recent article by Howard Mavity and Edwin Foulke, former head of the Occupational Safety and Health Administration (OSHA) from 2006 to 2008, stated: "The administration and many of its allies really do want to put employers in jail." The authors were struck by statements from the administrator of OSHA Region 4 at the recent Georgia Safety, Health and Environmental Conference, indicating that he's recently contacted all the U.S. attorneys in his region to encourage increased criminal prosecution of workplace fatalities and OSHA violations, and will soon do the same with state attorneys general.
While workplace deaths and reported occupational injuries have dropped more than 60% in the 40-plus years since OSHA was created, the biggest factor causing accidents has yet to be addressed - the person's mindset. If you review the OSHA website, you will see that programs focus on the work environment and safety procedures. You will NOT see programs focused on changing the individual's mindset that caused the accident. Years of study have proven that "rules-based behavior modification" has limited effects and is often simply confined to the modification environment.
Today's approach, while improving results, still misses an opportunity to identify underlying mindsets that drive the behaviors leading to accidents (and errors). At the core of every individual are motivations that affect the way they seek life's rewards. Employees who remain safe in their work environment have different motivations from those who have accidents, according to a five-year study conducted in four separate industries. In that study, 37 components of an individual's motivations were analyzed, comparing participants who were accident-free to those who had a reportable incident. The differences were quantifiable and distinctly different in the two groups. The most interesting factor was that the counterproductive factors were remarkably similar, regardless of the industry. The study proved conclusively that there are distinct motivational differences between people who are involved in accidents and those who are not, and these differences can be quantified and used as a basis for addressing the mindset that "caused" the accident.
It should be noted that this problem is not going to be quickly resolved, because you are dealing with individuals who have taken a lifetime to formulate a value system that justifies non-productive beliefs, like:
- "If I do not sacrifice some of my personal desires, then I will never be promoted, move ahead or improve my financial status in this company."
- "I realize that I should be more careful, but we are under deadlines, and if I do not meet those deadlines it is going to cost me."
- "The odds are against that happening to me. I have done this for a long time, and I've never had a problem before, therefore I will continue to do things my way."
- "Yes, there may be a better solution, but I have to work in this environment with my co-workers. We have bills to pay - they gut it out, and I will, too."
To change those types of mindsets, there is no quick fix. Therefore, the sooner an organization initiates the mental benchmarks and addresses the counterproductive motivations, the sooner the impact to the organization's bottom line. A minimum of 12 to 15 hours of workbook application, seminars or training sessions are required to implement mindset and process change. With a methodical approach using human data and people metrics, the impact will be individually targeted and last longer, producing productive environment and behavioral mindset changes.
OSHA's gains over the past four decades have been a positive beginning. However, if the insurance industry and Corporate America want to continue to improve the risk and productivity factors affecting safe working environments and profitability, they must address the mental source of accidents, not just the environment in which they occur. This will require a focus on the employee's motivations and how they get their "rewards." Reducing reportable incidents, increasing employee engagement and improving the organization's bottom line will only occur when the factors affecting an employee's motivations are addressed.
While each organizational culture is distinct, the process for reducing accidents requires reducing counterproductive mindsets. For example, some people may view love and attention as much more powerful than a $100 bonus for being safe the past month. Being pampered, receiving special attention and meals and having people you love visit you while you are injured can be a powerful incentive: To someone who feels isolated, it's priceless! A common belief in our society is, "No pain, no gain," and, in this case, the reward for this counterproductive mindset is worth the agony.
In my next article, I will address the various types of motivators that should be addressed and how a person's inner dialogue changes the mindsets. In the following article, I will provide you with a five-step process any insurer or company can use to identify, quantify and address removing counterproductive motivations from their work environment. As with any prescription, it takes some time, but not four decades.