Human Resources: Executive Summary: Occupational Safety and Health

U.S. companies and workers have made considerable progress in reducing fatalities and injuries over the last decade, but workplace perils and the need for change are still key concerns.

Work-related accidents in private industries claimed 5,559 lives in 2003, compared with 6,632 in 1994, the BLS reports. Fatality rates per 100,000 full-time workers also diminished, from 5.4 to 4.0 over the same period. The number of nonfatal work injuries and illnesses declined as well, from 6.8 million in 1994 to 4.4 million in 2003. The ratio per 100 workers improved from 8.4 to 5.0, respectively.

These reports may sound positive, but the toll on workers' health, the loss of lives and the costs to business remain high. Total costs for each death averaged about $1.1 million and per disabling injury, about $38,000, according to the National Safety Council. Liberty Mutual's most recent Workplace Safety Index also indicates high costs. U.S. employers' expenses for serious on-the-job injuries totaled $49.6 billion in 2002.

Some injuries are more common and more costly in terms of time off the job, experts say. The BLS notes that in 2003 (the year with the newest data available), sprains and strains caused most of the 1.3 million lost-time injuries. Liberty Mutual also reports that three types of injuries generated about half of employers' losses in 2002. Companies paid nearly $25 billion a year - about $500 million each week - for accidents caused by overexertion, falls on the same level and bodily reaction.

Rates also vary by industry and occupation. In 2003, most U.S. workplace fatalities occurred in construction (1,126), but the highest death rates per 100,000 workers were in agriculture, forestry, fishing and hunting (31.2), according to the BLS. By occupation, the highest number of workplace fatalities occurred in transportation/material-moving jobs (1,388), but death rates per 100,000 workers were highest in farming/fishing/forestry (27.9).

Even though fatality and injury rates have decreased, employers' costs for workers' comp (WC) insurance are on the rise. The National Academy of Social Insurance suggests several reasons for the increase - a then- sluggish economy, the tendency of some injured workers to seek more treatment than necessary because settlement amounts are often based on multiples of those costs, and a sharp increase in medical care costs. As such, employers' WC costs jumped to $80.8 billion in 2003, an increase of 9.6% compared with the previous year.

One employer, CA-based Brannon Tire and Auto Centers, approached skyrocketing WC costs in a novel way - shifting the cost to customers. Faced with a $240,000 increase in annual WC premiums, owner Jerry Brannon initiated a $2.50 surcharge on each transaction. This company is the first to take such a step, but several area employers may be following suit, he says.

Accident prevention is key in protecting workers and reducing costs. It's crucial for employers to create a flow of communication, through which workers feel engaged in the safety process, comfortable to report risks or incidents and rewarded for maintaining good safety records.

For example, United Parcel Service (UPS) revamped its safety approach in 1996 by involving drivers and parcel handlers. UPS deems the program a success because of lower injury rates, improved employee opinions about safety and a decline in turnover.

Effective incentive programs can also make a difference. IOMA suggests that employers make programs self-supporting by funding them through WC savings; use themes to keep programs timely and effective; find out what prizes employees value; award tangible items rather than trophies or plaques; choose meaningful prizes and awards and avoid cash and games; and recognize winners publicly.

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