When Charlie Bacon was 21 years old and working on his firstconstruction project in Philadelphia, an accident involving anelevator counterweight killed one of his colleagues.

That traumatic incident helped fuel an obsession with safetythat has carried through his entire 30-plus-year constructioncareer—and has led to the company he now heads, Limbach FacilityServices, being named Grand Champion in NU's annualExcellence in Workers' Comp Risk Management awards.

When Bacon joined Limbach as CEO in 2004, the mechanicalcontractor (founded in 1901) was in disarray. Just over a yearearlier, the company had been sold to private investors by itsprevious owner—the disgraced and bankrupted energy trader Enron. Adevastating worksite fatality in Philadelphia shortlybefore Bacon came on board further weakened morale.

“I decided right away the employees really needed something torally around,” Bacon tells NU, and so he launched what hasbecome an industry-leading safety program (“We Care!”) thatunderscores how valuable each employee's well-being is to thecompany.

“It took off like a rocket ship,” Bacon says, “and lifted peopleout of the doldrums” where the Enron debacle and recent death hadleft them.

This emphasis on safety didn'tjust reinvigorate the workforce. It also helped solve a massiveWorkers' Compensation problem that Bacon inherited.

In 2004, Limbach suffered 94 claims and net payables of $1.5million (and total claims of more than $2 million), with 1,140lost-work days. By the very next year, the number of claims wasreduced to 74 and net payables fell to $626,000.

Limbach's commitment to safety has been ongoing under Bacon'swatch—and the Workers' Comp numbers have continued to improve. Itsfrequency figure stood at 23.27 percent in 2005, with severity at19.85 percent.

By 2011, total claims came in at 31, with a frequency rate of9.75 percent and severity of 5.73 percent (with net payables of$170,000). And this year has been even better, with just fiveclaims so far—translating into a measly $3,000 of net payables.

Such a steadily improving loss history, of course, also hasresulted in declining insurance premiums, Bacon notes.

And the Philadelphia branch, the one that hadexperienced that fatality just before Bacon's arrival? It hosted aparty on June 21 of this year to celebrate going six years workingon major building projects with no lost-work days—not a singleone.

MAKING TOUGH GUYS CRY

In the construction industry, workplace accidents have long beenviewed as an inevitable component of a job that involves welding,hammering, cutting, hoisting and dozens of other high-riskactivities. As Limbach noted in its award submission, “Forgenerations, construction workers accepted accidents and injuriesas a risk—or even a badge of honor of their chosen profession.”

But Bacon, who speaks frequently on the topic of safety atindustry conferences, was determined to change this way ofthinking—and for help in executing this radical shift, he turnedfor assistance to JMJ Associates, an “enterprise transformation”consulting firm that specializes in the mining, energy andconstruction sectors.

Limbach has adopted JMJ'sIncident and Injury-Free (IIF) program, which dovetails perfectlywith Bacon's own operational philosophy: “Why tolerate alost-workday goal of 35?” he asks. “Yes, having just five claims sofar this year is notable, but I won't celebrate until that numberis zero.”

The IIF approach to safety is less about specific technicalrecommendations to increase safety than it is about modifyingbehavior—“reaching workers' hearts and minds,” as Bacon explainsit. “We want people to choose to be safe instead of being told tobe safe.”

For example, one safety-training exercise asks workers to writethe letter they would want their families to receive in the eventof their death at work. “That's a very emotional session,” Baconsays. “These people are pipe-fitters, tin-knockers—tough guys. Andyou hear a lot of sniffles in that room.”

Correction: Due to errors in Limbach's award submission, theoriginal version of this article said the devastating workplacefatality took place in Florida, not Philadelphia. The originalrevenue figure was $247 million, not $292 million.

LOSS-CONTROL LEADERS

Limbach's list of industry-leading safety practices is long—andincludes the (rare) right of employees at any level to stop whatthey're doing if they legitimately feel they cannot worksafely.

“We do not know any other contractors that support, with ourlevel of conviction, their crews standing down if the conditionsare [deemed] unsafe,” says Bacon, who frequently walks constructionsites himself, “imploring” his workers to raise any concerns. AnEthics Hotline lets workers confidentially report any worries theyhave.

Each of Limbach's 11 offices around the country has a dedicatedsafety manager  whose job is to both develop technicalrecommendations and champion the safety culture. Safety managersare also responsible for staying in regular contact with injuredemployees from the beginning of the claim (often accompanying theemployee to their initial medical care at the time of the injury)through their return to work.

“We have found this engagement encourages employeesthrough recovery and leads to better results. Our people know weare there with them and treat them fairly. The result is that wehave very few Workers' Comp claims in litigation today,” Baconnotes.

Last year, the company enhanced its job-site safety program byimplementing daily pre-task planning, where the entire crew reviewsthe day's work to identify hazards and develop solutions ahead oftime. This year, Limbach added daily “huddles,” where the crewmeets at the end of the day to discuss any safety issuesencountered.

A hallmark of Limbach's proactive approach: “Safety Alerts!”Anytime there is a near miss, let alone an actual injury, adescriptive report is prepared, even if the incident involved not aLimbach employee but another worker on the site. What happens tothese reports is indicative of how seriously safety is taken at thehighest levels of the company: The weekly meetings of the company'stop national executives always start with a discussion of thesafety alerts—regardless of what else is on the agenda.

Also reinforcing the C-suite's absolute emphasis on safety:Bacon and Limbach's COO religiously attend the company's monthlyNational Safety Committee meetings, where best practices are sharedamong branch offices.

OWNING CLAIMS, PUSHING INSURANCE PARTNERS

Limbach expects all its employees to take personal ownership oftheir safety: All workers sign a personal-commitment card, pledgingtheir allegiance to a safe workplace. Hiring decisions take intoaccount whether a candidate is likely to embrace the company'sethos on safety; and if it becomes clear that an employee is not agood fit for the company's safety-first culture, he or she willsoon be looking for work elsewhere.

And just as Limbach demands its employees be responsible fortheir safety, the company feels a similar responsibility to own itsWorkers' Comp program.

Rather than allowing its third-party claims administrator,Gallagher Bassett Services (GBS), to manage claims alone, “we haveassumed leadership of claims management and evaluation,” saysBacon, who characterizes Limbach as a “high-maintenance client”because of its insistence on full participation in all matterspertaining to claims.

The company has a paralegal, in-house attorney and financepersonnel who devote significant time to monitoring claims.Protocol requires GBS to “not be shy” about communicating withLimbach and its carrier, Arch Insurance, regarding treatmentstrategies, payments, settlements, closings, reserves andreturn-to-work options.

Limbach's broker, Willis, is asked to conduct annual, multidayaudits of each branch's risk-mitigation programs. During thesevisits, the broker evaluates safety-training efforts, vehiclesafety, subcontractor- and supplier-management practices, and othersuch critical elements of effective loss control.

Twice a year, key personnel from Limbach, Arch, Willis and GBSmeet in person to scrutinize the details, handling and strategygoing forward for every open claim.

And speaking of ownership: Limbach's Workers' Comp programfeatures a self-insured retention of $250,000. “It is obvious thata high self-insured retention is a smart choice for a company likeours with an excellent safety record,” Bacon asserts.

“One-hundred-percent incident- and injury-free is our goal andpassion,” he adds. “It is not yet a reality; until it is, we willwork smart with our partners to find new and better ways to limitinjuries and contain costs. But we will never lose sight of thereal prize: For many years, the four-minute mile was deemedimpossible. Likewise, the general belief is that constructioncannot be performed injury-free.

“At Limbach, we have set our sights on the finish line with thesame resolve that sped Roger Bannister to break the four-minutebarrier. We know that the best risk management is real riskprevention—and every employee returning home safely each dayis possible.”