Filed Under:Markets, Workers Compensation

Workers' compensation and the impact of effective hiring practices

Successful workers' comp programs focused on accident prevention can protect employees, increase productivity and manage cost.

Editor's note: Greg S. Tardy, CPCU, ARM, is vice president & chief underwriting officer at Key Risk.

Down from a recent peak of 9.6% in 2010, the Bureau of Labor Statistics (BLS) reported an unemployment rate of 6.2% as of July 2014. As the unemployment rate decreases, new employees are entering the workplace and people are returning to work in new industries. During this time of economic growth, it is important for employers to remember the fundamentals of hiring and understand the impact effective hiring practices can have on their workers compensation program and business.   

Successful workers' compensation programs focus on accident prevention. A commitment to accident prevention helps to protect employees, increase productivity and ultimately manage the total cost of an employer’s workers compensation program.  

The Occupational Safety and Health Administration (OSHA) calculates that each year more than 4.1 million employees sustain a serious job-related injury or illness. Although we have seen a consistent decline in workplace injuries, the National Council on Compensation Insurance (NCCI) has historically found that workplace injuries increase during times of economic recovery. This is a result of the influx of inexperienced employees entering the workplace. The BLS projects private industry employees who have been on the job for less than a year account for 30% of all work-related injury and illness cases requiring days away from work. 

An employer’s first step toward injury prevention is to ensure candidates are an appropriate match for the responsibilities of the open position. There are several points during the hiring process where employers have the opportunity to promote their commitment to a safe workplace environment: the position posting, the interview and the offer. 

The Position Posting, Outline Responsibilities

Safe work environments are optimized when they are accompanied by effective hiring practices. Employees who are mentally or physically unable to do their jobs are a great risk to themselves and their organizations. Consulting with Human Resources to ensure job descriptions are detailed and accurately outline all essential job functions will play a significant role in preventing workplace injuries. It is an employer’s obligation to hire qualified employees who are able to fulfill each aspect of their position. This includes outlining the work experience, education and physical ability necessary to perform all job functions.

Written Job Description

An effective job posting identifies all the pertinent position information for both the employer and the applicant. In formulating the description, the employer has the opportunity to examine all aspects of the open position and may include the metrics by which they will evaluate job applicants. Good job descriptions detail the necessary qualifications, education level and physical requirements needed to perform the outlined job functions.

Essential Functions

If the position posting is effective, the applicant will have a clear idea of the position and its primary and secondary job functions. Including essential job functions in the posting protects the employer and the employee. Outlining the tasks required, and the expertise needed to complete those tasks, provides a record for the Equal Employment Opportunity Commission, the organization and the employee.

Job Qualifications

Employees drive organizations and allow them to operate at their optimal capacity. Placing employees in positions where they meet or exceed the indicated job qualifications reduces the risk of workplace mishaps. Defining the skill level and work experience needed for the open position embeds a level of applicant pre-screening for the employer, and clearly communicates workplace expectations to job applicants. 

Physical Requirements

If there are physical requirements associated with the open position, it is the duty of the employer to include this information in the position posting. Physical requirements should be defined in terms of actions the employee will take and the scenarios in which those actions may be completed. Lifting and carrying weight specifications should also be included.  

The Interview, The Offer, Effective Screening

A thorough interview process consists of interviews with different team members and a standard set of open-ended and behavioral questions for all applicants. Standard questions make it easier to compare and evaluate applicants.  The interview is a time to inquire into past employment history and determine which applicant will be the best fit for an organization. Once the job offer is made and accepted by the applicant, further evaluation takes place through employee screenings.

Post offer employee screening processes must be applied consistently. Examples of common screenings include a background and criminal records check, and a review of educational records and professional licenses. Integrating third-party post offer, pre-employment testing into the hiring process is also an investment that will yield great results, especially for physically demanding positions. Condition of hire protocol will need to be consistently followed and be accompanied by a formal written policy. Post offer pre-employment opportunities for employers include drug and alcohol screenings with written consent from the candidate, screenings for safety-sensitive positions, and the completion of I-9 documentation.

Educational & Professional Records Review

Speaking with previous supervisors or professional references may provide insight into the applicant and their ability to perform the job functions of the open position. Reference checks also allow the hiring organization to gain further insight into the applicant from a professional perspective that may not be plausible in the interview process. If the open position requires a specific level of education, certification or professional designation to successfully execute the essential functions of the job, it is to the benefit of the hiring organization to verify that the information provided by the job applicant is both current and accurate.

Background & Criminal Records Check

Incorporating a background and criminal records check into the hiring process provides the employer with a scope of knowledge about the job applicant that may not be revealed in the job application. Record checks are most dependable when applied consistently and are accompanied with a formal written policy.

Drug & Alcohol Screenings

It is common for employers to make offers contingent upon the completion of a drug and alcohol screening. Drug and alcohol screenings can only be performed with the written consent of the job applicant. Drug and alcohol screenings must be applied consistently to all applicants and be accompanied by a formal written policy.

Physical Job Functions Test & Safety Sensitive Screenings

To ensure the applicant is able to perform the physical requirements associated with the open position, employers have the ability to implement a condition of hire protocol that includes a physical job functions test. Evaluating if the applicant is capable of performing all physical job functions will reduce risk for both the employee and the organization. Condition of hire medical exams can also be implemented as part of the hiring process for safety sensitive positions when the job announcement documents physical requirements. Medical examinations must be applied consistently to all applicants of the same job function and be accompanied by a formal written policy. If an organization chooses to implement a medical exam policy, they are responsible for all associated costs.   

E-Verify & I-9 Documents

The Department of Homeland Security requires all organizations to complete the I-9 process. All employees under hiring consideration must be legally eligible to work in the U.S. The I-9 form and its specific requirements can be found online. E-Verify is a free web-based program, used in conjunction with the I-9 form, that provides organizations the ability to determine if employees have authorization to work in the U.S. Employers can enroll in E-Verify and find out more information on state specific requirements online.

The Hiring Process

An effective hiring process is a critical component of every workers compensation program. A safe work environment, accompanied by effective hiring practices, demonstrates an employer’s commitment to its employees and prevention of workplace accidents. With decreasing unemployment rates and new employees entering the workplace, employers who maintain effective hiring practices will be better equipped to prevent injuries, protect their employees and actively promote a safe workplace.


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