October 1, 2021
Workers’ Compensation Insurance
There are a number of techniques for bringing about modest reductions in the cost of workers’ compensation insurance.
Job Classifications: One of the key determinants of the cost of workers’ compensation insurance is the job classifications into which all employees are slotted. An employee designated in a high-risk classification will cost far more in insurance premiums than someone in a clerical position. Consequently, review the classifications for all employees once a year, just before the insurance is due for its annual renewal. If an insurance auditor wants to reclassify an employee into a higher-risk classification, then this is worth the human resources staff to protest the designation.
Employee Screening: It is of considerable importance to conduct a drug test, background check, and felony search for every job candidate who is being considered for employment. By doing so, a company may spot someone who has a history of workers’ compensation fraud or who has indicators that may lead to false workers’ compensation claims. The cost of this screening is far less than the savings from a single workers’ compensation claim.
If a company has a large workforce and there are numerous workers’ compensation claims, then it can be cost-effective to hire an on-site nurse and route all such cases through that person. The nurse can conduct an immediate evaluation of probable claim types, provide initial care, and dispatch employees to a medical care facility. These actions can mitigate the size of a company’s workers’ compensation claims.
The incidence of employee injuries may be impacted by their use of illegal drugs. To see if this is the case, institute a policy of requiring post-accident drug testing. If a test is a positive, then the company has grounds for terminating the employee, thereby preventing any future workers’ compensation claims from arising.
Other Alternatives: If an employee has a legitimate workers’ compensation claim and is unable to perform his job, then consider having him come into the office and perform some less stressful tasks that will not interfere with his recovery from the original injury. This will likely require the participation of a doctor and the cooperation of the injured employee.
If a company is experiencing large numbers of claims in a specific work area, it should consider outsourcing the work performed in that area. While this may seem like an extreme solution, larger claims can be very expensive, and will eventually drive up a company’s insurance premiums dramatically. When the alternatives to outsourcing are ongoing insurance payments, extensive staff retraining, and the purchase of safety equipment, outsourcing may not seem like such a bad alternative.
February 1, 2022
Email Etiquette: Taming the Beast
“Because the mail never stops, Jerry! It just keeps coming and coming and coming, there’s never a let-up. It’s relentless. Every day it piles up more and more and more, and you gotta get it out but the more you get it out the more it keeps coming in!” -Newman, Seinfeld Most executives I know …Read
January 1, 2022
Don’t Lose Customers, Forge Elite Teams Instead
I’ve been a loyal Starbucks customer for 20+ years, mainly because of the consistency in their service and product. However, one of the locations close to me nowadays is a true test of patience; horrible attitude towards customers, lack of consistency in drinks and, worst of all, employees backbiting about each other, their superiors, and …Read
December 15, 2021
Negotiating with Suppliers The approach to negotiating with your suppliers is simple: treat them as your partners, be tough but fair, and don’t lock yourself in a situation that is impossible to walk away from. 1. Understand the balance of power: Understanding and playing the balance of power between buyer and supplier is a key …Read
December 1, 2021
Benefits Administration A company’s benefits package can be a very significant part of its total expenses, but in many companies, benefits are not really viewed as expenses. Instead, because of the need to hire and retain top-quality employees, the benefits package is considered a key asset that must be maintained if not increased. While a …Read
November 15, 2021
Strong leadership is a prerequisite for good cost management. Cost leadership starts with the CEO or business unit head and cascades down through the top management team. They need to build a tough cost culture and be good role models in their personal behavior. They need two key staff functions to be very active supporters …Read
November 1, 2021
“If the company’s problem did not lie in revenues, it could only stem from expenses.” -Carlos Brito, AB InBev Simply put, Zero-Based Budgeting (ZBB) is a radical cost-control program that foresees a complete annual revision of all the company’s spending. In zero-based budgeting, managers are responsible for creating their budget from “zero costs” every year, …Read
October 15, 2021
HIRING & FIRING
People Cost The cost of people is the most difficult cost to manage. Because it is so tricky it is usually left until last in any cost-cutting program and any discussion of cost management. Why is people cost so problematic? First, people cost is very sticky. Once people are on the payroll it’s hard to …Read