By: Mike Salsgiver
Executive Director, AGC Oregon-Columbia Chapter
This article was published by the DJC on August 14 in Buildings Bridges and Roads and can be viewed here (subscription required).
Associated General Contractors’ Oregon-Columbia Chapter (AGC) and the SAIF Corporation have been partners for 26 years. This partnership is made up of a group of AGC member contractors who receive their workers’ compensation coverage through SAIF.
This group represents contractors whose safety performance is exemplary. In all but one of those 26 years, AGC’s members received what is known as the “retro return,” which are monetary refunds from SAIF because of the group’s safety performance. This year, the 638 participants in the AGC/SAIF group workers’ compensation program will receive roughly $7.8 million in retro payments.
That’s $7.8 million given back to these companies because they know that safety matters, and 22 percent of their paid premiums are headed back to their bottom line. These companies not only talk the safety game, but play it as well.
These are remarkable results for any industry, but particularly construction, where increasing activity and a continued shortage of qualified workers have presented unique challenges this year.
Retrospective return programs are getting a lot of attention from contractors with similar interests, and these interests are performance-based returns. Contractors participating in a workers’ compensation program have the resources available to improve their safety programs and have fewer workplace injuries, but the ones that truly embrace safety as a pulse within their organization see the best rewards.
Contractors that enjoy lower experience modification rates, based on less severity and less frequency of workers’ compensation claims, will receive the benefit of having lower up-front premiums. This can add up to tens of thousands of dollars in savings. By having a lower experience modification rate, a contractor qualifies for more projects and is more competitive in bidding on those projects.
Let’s consider an example. A contractor with a 0.70 experience modification rate is paying 30 percent lower workers’ compensation premiums than a similar contractor that has a 1.00 experience modification rate. Consider the significant up-front discount combined with a 22 percent retrospective return and the savings really add up.
While employers pay less in initial premiums, those decreases put pressure on continued safety performance, and employers and employees alike must remain vigilant with their safety efforts.
Safety continues to be at the epicenter of every contracting company. No matter the size, whether it’s two employees or 300, safety drives success. Leading by example, measuring leading indicators instead of lagging indicators, and having a presence in the field to focus on safety are all examples of best practices that will elevate a contractor to the next level.
The retrospective return is based on the safety performance of all group members, so it is truly a team effort. Employers in the program make investments and commitments to safety and training. Employees carry out the work, utilizing safe work practices and behaviors.
Creating safer workplaces through a reduction in workplace injuries and illnesses saves lives and saves money.
The ultimate reward is the success of creating and maintaining a safety-focused environment that encourages and rewards people to be safe and productive on the jobsite.
Each year the program improves to provide optimum results. Year after year we see improvements in our members’ safety leadership, culture and commitment. The premise that “safety pays” is clearly understood.
It starts with leadership, leadership, leadership. When senior leadership in the company not only supports the safety program but is directly involved in establishing safety protocols and holds others accountable for executing those programs, a safety culture will prevail and everyone wins.
Mike Salsgiver is the executive director of Associated General Contractors’ Oregon-Columbia chapter. Contact him at 503-685-8305 or email@example.com.