The Right Way to Run a Safety Incentives Program

safety manager rewarding employee for safe behavior

$41,003. That was the average cost of a workers comp injury in 2018. For more serious injuries, it was even higher. 

Let’s say your client has five workers comp related injuries in one year at the average cost. That’s $205,015. If your client has a high deductible plan, they may be out of pocket for much of these expenses. Not to mention the effect the losses have on their Ex Mod and productivity. 

Looking at six-figure losses will make any CFO or owner sick to their stomach. Often, it’s this type of information that can drive a company to make significant changes in its safety program. 

There are many ways to ramp up a client’s safety program, but incentivization is a strategy that has the potential for lasting change at a relatively low cost to the client.

Let’s take a look at the right way to implement incentives so you and your clients can avoid common pitfalls. 

The Problem with Incentivizing Incident Reduction

Companies typically use two sets of data in incentive programs: lagging indicators and leading indicators. Lagging indicators are collected after an accident or injury occurs. Leading indicators are “proactive, preventive and predictive measures” that measure safety performance — not incidents. 

Many organizations previously used lagging indicators, such as near-miss and incident rate reduction, to offer incentives — and some still do. Of these, “zero injury” programs were one of the most popular programs. Zero injury programs reward workers for working towards an injury-free workplace. In other words, when there are no injuries, everyone wins. But when one injury happens, it’s back to square one.

There are obvious problems with zero injury or lagging indicator strategy. If the incentive is money or time off, employees are incentivized not to report an injury in order to receive the reward. Not only is this unsafe for the injured employee, but it also prevents a potential hazard from being addressed. (Failing to report work-related injuries is also a form of insurance fraud.)

Peer pressure can also play a major role in reporting lagging indicators. Employees may push their co-workers to hide an incident so everyone can enjoy the benefit.  

On the contrary, leading indicators reward proactive behavior. Employees who identify problems before they happen are encouraged to report them. This changes unsafe behaviors.

The bottom line: Leading indicators are much more beneficial and cost-effective. Teaching and training employees to look out for safety problems and rewarding them for doing so will produce better results. 

How to Get Started with Safety Incentives

Safety incentives can be an important tool, but they do not replace a robust safety or risk management system. So, if your client doesn’t have one of these down on paper, then you need to start there first.

Before your client even begins a safety incentive program, they need buy-in from the client’s C-suite.

Demonstrating the financial impact of incidents is the easiest way to get executives on board. Once they understand the amount of money and lost productivity sunk into preventable accidents, they’ll prepare to take action. 

Once you get the green light, determine your client’s goal and work from there. Identify what needs to be addressed and develop a plan to fix the issues.

It’s important to get the right stakeholders in the room. Safety managers, the insurance team, and frontline supervisors need to be involved in the conversation. Including line employees also prove incredibly valuable. You need real feedback to get support for new safety initiatives.

Integrating Safety Incentives into a Safety Program 

If you want to include incentives as part of your client’s safety program, start with the basics. Rather than focusing on incident rates, reward employees simply for observing their worksite and pointing out behaviors that need to be corrected. 

Drew Youpel, Head of Safety Success at Safesite, recommends showing up unannounced at job sites and rewarding good behavior on the spot. 

Having the mentality of, “you did great, here’s a reward,” makes workers take notice, Youple said. When they see a co-worker receive a gift card for wearing their hard hat or safety glasses, they’ll begin to correct their own behavior. 

Youple speaks from experience. He implemented an incentive program when he was working in the field as a safety manager. 

“Anytime we saw a worker acting safely, we would give them a gift card,” Youpel said. 

At the end of each quarter, everyone who received a reward for being safe was entered into a raffle. 

In the beginning, you may experience some lag as employees become acclimated to the reward system. Once they see the incentives, they’re all in. Youpel said it changed the way his employees worked. Not only did they take more precautions for their own safety, but they also looked out for their co-workers. 

Starting your safety incentive program with a small gesture will get employees’ attention. When your clients apply those gestures consistently, they create a slow build to change worker behavior.

The Bottom Line: Through consistent, positive reinforcement, your client will begin to see a heightened awareness of potential safety issues.

When the Plan Comes Together 

Your incentive program will hinge on your frontline managers and supervisors. Having their support and their own incentives is important to your success.  

Youpel suggests tracking each manager or foreman’s positive actions. Every time someone on their team or crew proactively reports an issue, log it. Use their numbers to rank the managers and offer incentives to top performers. 

These types of rewards don’t go unnoticed. Managers will see their colleagues earning incentives and healthy competition develops from there, as long as you apply these incentives consistently.

These actions, driven by supervisors, create sub-conscious changes in employees. They’ll begin to be proactive in their safety precautions, looking for the correct equipment before they begin a task. 

Although the up-front costs of a safety incentive plan can add up, the savings created by proactive employees are usually far greater over the short- and long-term. 

Let’s think back to our earlier scenario. Cutting out two accidents from our example of five creates a savings of $82,006. That’s substantial money your client can invest elsewhere, and you probably didn’t give out $82,006 in gift cards. 

The Bottom Line: Offering incentives to managers can have a trickle-down effect on other employees. It rewards proactive behaviors that prevent incidents before they happen. And it improves the dialogue between manager and employee about safety issues.  

Use Existing Tools to Run Incentive Programs 

The idea of a safety incentive program is one thing — managing it is quite another. And management is critical. If you aren’t consistent with when, how, and why you offer incentives, your program will fail.

On the other hand, if your clients’ incentive program is built into existing workflows, it increases the likelihood of success. Because a strong risk management technology is already built to track leading indicators like safety observations and actions, it’s a logical choice for managing a safety incentive program.

In addition to your clients’ chosen risk management solution, some workers compensation providers may provide tools to help boost safety performance.

How Foresight Supports Incentive Programs

Foresight workers compensation policies are powered by Safesite, a leading risk management software solution. Safesite is designed to support an incentive program. By utilizing Safesite, insureds can drill down to specific incident data points, so they know exactly what needs to be addressed. 

Foresight rewards insureds with lower premiums when they establish positive safety habits that produce results. And brokers earn a bonus commission when an insured improves their safety engagement with Safesite.

Everyone wins when safety is a priority.  

The Bottom Line: If your client doesn’t have a risk management software that aids in running their incentive program, encourage them to find one. Some workers compensation carriers, like Foresight, incentivize safety on top of insureds’ in-house programs for even greater impact. 

Incentivize Safety by Promoting Positive Behaviors

A robust safety program is the starting block for any company’s loss management strategy. But sometimes, your clients need to kick it up a notch to eliminate risky behaviors.

Safety incentives can be applied to any industry or workplace — that’s the beauty of these programs. And the best programs can be customized to fit your client’s needs. 

Using a leading indicator-based incentive program can transform how your client and their employees view safety. And when they see safety as something that benefits them, then you’ll see the benefits across the board.  

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