The Top Six Ways Manufacturers Can Save on Workers' Comp
Manufacturers are among the highest-paying out workers' compensation claims industries, and insurance companies don’t take these risks lightly.
From an insurer’s perspective, the manufacturing environment is full of potential hazards, including heavy machinery, repetitive motions, high-paced workflows, and an increased likelihood of workplace injuries. Because of these risks, insurers set premiums based on a company’s past claims history, industry classification, and safety measures in place. If a manufacturer has frequent claims or lacks structured safety programs, their Experience Modification Rate (EMR) rises, leading to even higher premiums. Essentially, insurance companies reward businesses that demonstrate control over workplace safety and penalize those with costly claims.
The good news? There are important strategies that can help manufacturers not only reduce their claims but also make insurance providers view them as a lower risk - leading to significant savings. By taking a proactive approach to safety, claims management, and hiring practices, manufacturers can gain the upper hand and keep costs down.
Here’s how you can implement six key strategies that will not only improve workplace safety but also make your insurance provider happy.
1. Invest in Proactive Safety Programs
Let’s be real - waiting for an accident to happen before addressing safety isn’t just risky, it’s expensive. A reactive safety approach might seem like a quick fix, but it usually leads to more injuries and higher claims. Instead, flip the script and invest in proactive safety programs. This means regularly assessing risks, training employees to recognize hazards, and setting clear safety standards. Think lockout/tagout procedures when dealing with machinery - this is a big one. Not having them in place can lead to fatal accidents. Staying ahead of the game with regular safety audits and ongoing employee education reduces incidents and, more importantly, keeps your premiums in check. Insurance providers will see that a business is not just waiting for accidents to happen, and that’s a surefire way to lower costs over time.
2. Optimize Employee Classification Codes
Employee classification is one of those behind-the-scenes details that can make a huge difference in workers' comp premiums. Misclassifying employees, like putting office staff in the same category as machine operators, can hike up premiums unnecessarily. If you haven't done a thorough job audit lately, now’s the time. The right classification helps ensure a business is paying only for the risks associated with each job role. For example, clerical work comes with a different set of risks compared to heavy machinery operation. By getting this right, businesses can shave off a nice chunk from its insurance premiums. A little time spent reviewing job roles and classifications can result in substantial savings in the long run.
3. Implement a Return-to-Work Program
Long-term employee absences due to injury are like throwing money down the drain. Workers' comp claims become even more costly when an employee is out for an extended period. A Return-to-Work (RTW) program can help reduce this. When employees get injured, instead of just sidelining them until they fully recover, a structured RTW program allows them to return to work in some capacity - often with modified duties that fit their medical restrictions. Not only does this reduce the duration of the claim, but it also helps keep employees engaged and productive during recovery. This can significantly cut costs, while maintaining morale and the long-term well-being of employees.
4. Reduce Workers' Comp Claims with Proper Ergonomics
If employees are working in repetitive positions or lifting heavy items regularly, businesses will likely see some repetitive strain injuries, right? It’s just part of the deal in manufacturing. But here’s the kicker: businesses can drastically reduce these claims by making a few ergonomic upgrades to workspaces. Simple solutions like adjustable workstations, lifting aids, or better seating can take a load off workers' bodies. Making these improvements shows a commitment to employee health - and it’s not just good for them; it’s good for the bottom line, too. Fewer injuries mean fewer claims, and ultimately, lower premiums.
5. Create a Strong Safety Committee
Building a dedicated safety committee can be a game-changer for businesses when it comes to both preventing injuries and managing workers' comp. A group of employees from various departments - armed with a focus on safety - can actively assess risks, conduct regular safety audits, and ensure safety protocols are always being followed. This team doesn’t just wait for incidents to happen; they’re actively looking for potential hazards and addressing them before they become a problem. By engaging employees at all levels in safety practices, businesses create a culture of shared responsibility that improves accountability and awareness. Having a strong safety committee also helps businesses stay proactive in compliance with safety standards, reducing the chance of accidents and making them look like a responsible, low-risk operation to insurers - resulting in lower premiums.
6. Proactive Claims Handling
When it comes to workers' comp, how a business handles claims can make or break the bottom line. One of the smartest moves is taking a proactive approach to managing claims. It’s not just about handling things when they arise - it’s about anticipating, preventing, and addressing potential issues early. This means staying on top of claims from the moment they’re reported, managing the process to ensure it moves quickly, and keeping an eye on any patterns that could signal bigger problems down the road. Proactively managing claims helps avoid delays that can lead to increased costs and makes it easier to implement return-to-work programs faster. By getting ahead of the game, businesses not only reduce the duration of claims but also ensure the insurance provider sees them as a responsible, low-risk client, which can directly translate into lower premiums.
How Can Alloy Help Your Manufacturing Operation?
Alloy Employment Services is all about making it easier for manufacturers to save money, stay compliant, and handle claims like a pro. We’re not just another service—we’re a team that’s in your corner, helping you tackle the unique challenges of running a manufacturing business.
Here’s what we do:
- Cost Control Strategies – We dig into your claims history and risk factors to create a game plan that helps lower premiums and keep your costs under control.
- Claims Management – We handle the claims process from start to finish, making sure everything’s on track and wrapped up quickly with no hassle.
- Compliance Support – Regulations change all the time, but Alloy keeps you ahead of the game, so you don’t get hit with any fines or penalties.
- Safety & Risk Management – We help you set up safety programs and injury prevention strategies that actually make a difference, reducing claims and keeping your team healthy.
Alloy is about more than just ticking boxes. We’re focused on delivering real, long-term results to help your business run smoother and your workers stay safe. If you’re ready to take control of your workers' comp, we’ve got the tools and expertise to make it happen. Let’s chat and see how we can help.
