By MATTHEW BRODSKY, senior editor/Web editor of Risk & Insurance®
It was not pretty back in 2004. With 180,000 U.S. employees, Aramark was averaging 10,000 injuries a year. Frequency and severity were both trending up. Workers' comp insurance premiums were eroding the margins of the Philadelphia-based professional services firm. That's where Debbie Rodgers came in.
The organization's workers' comp program wasn't really a singular entity back in 2004. There were multiple sets of policies and procedures, with claims being handled outside of risk management by three people whose work wasn't coordinated.
"Nobody knew what the heck was going on," said Rodgers, who now serves as vice president of global risk management.
Speaking at the Philly I-Day event on March 26 in a session titled "Developing an Award Winning Workers' Compensation Program," Rodgers and her team--including Kenneth Bowman, vice president of safety and risk control; Carla Wynn, director of workers' comp; and Andrew Pelcin, director of decision support--explained exactly how they were able to overcome these challenges and recreate a program that now sees frequency trending downward despite growth in sales and payroll. Workers' comp costs are down $40 million in the current fiscal year, compared to the prior year.
For starters, Rodgers and team needed to change the culture and think toward worker safety.
"We really had a moral obligation to provide a safe workplace," Rodgers explained.
Of course, execs also listen when you demonstrate what effect new safety initiatives will have an ROI, or what sort of top-line growth the company would need to earn to pay for the growth in comp costs should they not institute those initiatives, explained Bowman. The new safety culture needed to also engage employees all the way down the corporate ladder, to the thousands of hourly workers, who started to receive tangible and intangible recognition whenever they practiced safe behaviors, said Bowman.
Another lesson gleaned from Aramark's success is consolidation--as in putting safety squarely under the risk management department so it could coordinate one strategy and one training program across all nine of the company's business units. To pull this off, Rodgers asked for a new claims staff of 24 (up from the original three). Leadership said yes.
"That was the real surprising thing," admitted Rodgers.
They also consolidated their reporting, producing the same actionable intelligence for front-line managers and senior executives.
"So everybody was looking at the same sheet of music," Rodgers said.
They came up with one ergonomics plan--ergoTEC--for the company.
It was, in part, a matter of going horizontal across the organization. They were thinking of "silo-busting" before it got to be in vogue, said Bowman. The team--at about 64 members--is now larger than most small companies. Rodgers & Co. had to think of itself more like consultants or brokers and execs and business-unit staff as clients. They assigned one account executive for each business unit who served as the one point of contact, the "tip of the spear," explained Bowman.
As you might imagine, some departments and Aramark employees might have felt their feet being stepped on by risk management when this new system was installed.
"We have had to make a lot of people uncomfortable to make the case for change," said Bowman. "We realize we have to continue to push the envelope on conflict management."
Their conflict resolution plan must be working. According to head of workers' comp Wynn, they've been able to come up with a collaborative return-to-work program, a claims conclusion strategy and a supervisors guide to incident reporting.
They've also started working closely with their third-party administrator, down to the strategies used on individual claims at the branch offices set up by the TPA to handle local Aramark staff. As Wynn explained, the TPA (Specialty Risk Services) has agreed to a performance guarantee, with the pain only going the TPA's way (if adjusters don't meet the performance guarantee).
"The TPA is only as good as how you manage them," she said.
It also helps that Wynn has the powerful and proven accurate predictive modeling system set up by Pelcin, which has dramatically impacted how their claims are handled. For instance, instead of nurse case managers needing to see 10,000 claims a year, they now might only see 2,000.
"Predictive modeling has really helped us focus on the right claims," said Wynn.
THE BIGGEST LESSON
Of course, the Aramark folks are the first to admit that they are blessed with a great team--not just their in-house resources but also outside vendors.
They believe, nonetheless, that the lessons of their success can be translated to any employer--especially the overarching lessons of having a vision, a strategy and process, and enough dissatisfaction with the current program to motivate all involved to want to change the culture.
As for the award the Aramark program won, it earned the Teddy Award last year, the annual recognition given to for-profit, nonprofit and federal employers for excellence in workers' comp and disability management. Read all about why and how they won the Teddy Award here.
In fact, the application form for the 2010 competition is now available. Please sign up if your program--or somebody's you know--has already learned these lessons and is exhibiting success.
April 1, 2010
Copyright 2010© LRP Publications