Newsletter Sign-up

By DAN REYNOLDS, senior editor

With corporate headquarters in Fort Lauderdale, Fla., and Alpharetta, Ga., Spherion Corp. has it about as tough as one could stand to have when it comes to managing workers' compensation costs. For one, the company supplies temporary workers to manufacturing, warehouse and other environments fraught with injury possibilities.

How does one control risk, for example, when the places one's employees spend their days are, on a day-to-day basis, largely beyond one's direct physical oversight?

That's the challenge Susan Shemanski, the risk manager for Spherion, and her staff have faced in recent years. It's also a challenge that they have faced with an aggressive approach that has meant using analytics to identify injury trends and visiting the appropriate workplaces within their nationwide network to resolve shortcomings.

Spherion's analytics program uses its TPA, Sedgwick CMS' proprietary viaOne claims processing and tracking system in combination with technology from the Risk Sciences Group. "We started delving deeper into the analytic data approximately two years ago," says Shemanski.

Adria Greene, Spherion's insurance manager, says the claims tracking software can be used to capture claims data either on a per-client basis or a per-office basis. She can also use the software to track injuries by type, location, time of day or even gender to help Spherion's safety managers pinpoint the cause of the losses and steer the client to finding the most appropriate solutions.

"And that is were we can pull the information and figure out what sort of trends we have," says Greene.

In one case Spherion staff members, with Shemanski herself visiting the site in question, were able to determine that there was inadequate supervision on an assembly line. Workers there were doubling up and lifting boxes weighing as much as 35 pounds each, in effect doubling the load to 70 pounds. Back injuries spiked as a result.

Shemanski says the company has also been able to use analytics to discover new sets of more intangible information. For example, her team looked at employee turnover rates in various offices and was able to make a connection between turnover and the number of workers' comp claims filed. "We realized that branches with higher amounts of turnover had claims costs that were 10 percent to 15 percent higher than offices with little or no turnover," says Shemanski.

To get an idea of just how successful Shemanski and her team have been, take a look at the following statistics. In 2003, Spherion's self-reported data reports that the company's cost incurred per claim was $10,103. Now, five years later, that average has been chopped by 41 percent and stands at $5,946.

The company's lost time per claim has also been substantially reduced. From an average of almost 155 days in 2003, that number stood at a little more than 124 in 2007.

For years, according to Spherion, companies in various industry sectors looked at temporary staffing companies as the places where they would outsource their riskier jobs to avoid shouldering injuries to their own full-time employees. But Spherion has turned that notion on its head, at least where its employees are concerned. "Spherion has rejected the model that a staffing company is a dumping ground for difficult industrial relations problems," the company states in its application for this award.

In taking on difficult environments, such as manufacturing and warehouse operations, for example, Spherion tries to be a partner to its clients, providing floor supervisors with the very loss data that it's grabbing through its analytics. Instead of, say, a manufacturer shifting the risk to Spherion and walking away, the two become partners in sharing risk management techniques like on-the-job safety training or simple ergonomics?like how to lift a box or the safest way to operate a complicated piece of machinery. "Normally what we have found in our business if we are having the problems the client is having the problem too," says Greene.

Leading the charge in that philosophy of partnership, according to Dina Snyder, a claims manager based at Spherion's headquarters in Alpharetta, is Shemanski. "I have to go back to Susan with the credit for how our team works," says Snyder.

"She knows we all bring something different by way of strengths," says Snyder. "And when as a leader you recognize that everybody brings something different and you allow that to happen that is when you get the best from everybody on the team and she is awesome at doing that," says Snyder.

Shemanski, the mother of an athletic 16-year-old golf and tennis-playing son, has begun running half marathons recently herself. She says she was once described by a Spherion executive as a "type B-plus" personality.

To give you just one extracurricular example, to satiate her recently acquired half-marathon running habit, she ran four of them in a 12-month period. She has "Type-A goals and expectations, but realistic expectations on motivating my team to work together in achieving them," is how Shemanski says an associate once described her.

In addition to her work as a mother and a risk manager, Shemanski, president of the Atlanta chapter of RIMS, mentors risk management students at regional colleges and universities.

Like Snyder, Greene says that Shemanski expects that Greene will do her job well, and gives her the room to do it well.

"She doesn't sit there and stand over your shoulder and watch everything you do," says Greene. "She brings the best out of you. She gives you an assignment and unless you show her otherwise she trusts that you will do it, in which case you will. I have seen people who are just as good at what they do but they will not allow you to work as effectively."

In terms of operating philosophy, the place where Spherion makes a difference in controlling costs is in educating workers, no matter how far afield they are, in workplace safety methods and monitoring third-party administrators.

"Not just implementing and walking away but we monitor those. We monitor every partner that touches the program," Snyder says.

Starting in 1999, Spherion also started changing the process for workers who were transitioning back to work after suffering a workplace injury. When a physician releases a recovering Spherion employee for light duty work, the worker's body might not be ready for the full-time stresses and strains that face many workers in an industrial work environment.

But neither is it constructive, Spherion has discovered, for workers to be twiddling their thumbs until they are fully recovered. So what Spherion does is to take that employee back at their full pay rate, but place them in the community, working for a nonprofit until they can come back to work at their previous position. "Their recovery time is shorter because they are being active and it gives them an incentive because they are earning the same wage they were earning before. They are really earning more than they would be on indemnity," says Lynda Bryant, a return-to-work coordinator based at Spherion's headquarters in Alpharetta.

In many cases, the experience working at the nonprofit is so positive that Bryant says Spherion workers will stay on in a volunteer capacity in addition to holding down their full-time job in a Spherion position.

The gambit makes sense from a financial perspective because each office is charged back for claims under Spherion's allocation system.

"So it is actually more cost effective for our offices to pay someone a month's salary than it is to get charged for not putting them back to work," says Greene.

Shemanski wants her staff to share the spotlight for this award. But Bryant, like Snyder, says Shemanski deserves a ton of credit for the results that the Spherion team is achieving. "We do have a great team and we all just depend on each other," Bryant says. In conjunction with Marsh, its broker, Spherion recently completed a study comparing the company's average paid per-claim loss and average incurred per-claim loss to a pool of 80,000 light industrial claims and 140,000 claims culled from clerical settings, the types of environments where Spherion places workers.

In 2007, Spherion's average paid per claim was $1,097, or 28 percent less than its peer group, according to the study. The company's incurred loss per claim was $2,349, or 46 percent less than its peer group's incurred per claim of $4,330.

The company is closing more of its claims than its peer group, the study also found. In the first 12 months of a claim, Spherion closed 65 percent of its claims, compared to 44 percent on the part of its peer group.

Snyder, the Alpharetta-based claims manager, says that's an indication that Spherion takes managing its vendor relationships seriously.

That's true not only with attorneys that handle case files, but pharmacy managers, physical therapists and others. "Any attorney involved in any of my claims, yes, I will pick up the phone," says Snyder. "Yeah, they definitely know us and they like us."

"In addition to our own focus on analytics, we require our vendor partners to also delve deeper into our data and provide valuable reports so that we can take our program to a higher level," says Shemanski.

For example, Spherion put a pharmacy program in place about two years ago. "Most pharmacy benefit managers provide penetration statistics and generic conversion statistics," says Shemanski.

Spherion also requries reports on prescribing patterns listing the top 10 prescriptions filled by quantity and by price.

"This allowed us to create our own formulary for the types of injuries we were experiencing," says Shemanski.

The company sent letters to doctors "where we were losing control of the first fill" and asked doctors to help the company meet its goals. "We have achieved similar success with our physical therapy and litigation vendors," says Shemanski.

Relationships and the trust in them, are paying off for Spherion with an even more important group of stakeholders. Litigation rates with its employees for workers' comp cases had decreased to 4 percent by May of 2008. That's compared to 30 percent in 2000. That's allowed the company to decrease its allotted expenses by 21 percent while the industry as a whole this year is seeing an increase in expenses allocated to litigation of 24 percent, according to Spherion. The majority of those allocated expenses are legal expenses, according to Shemanski.

(Check out the profiles of the other Teddy Award winners.)

November 1, 2008

Copyright 2008© LRP Publications