By MICHELLE KERR, who writes about workers' comp issues and coordinates the judging process for the annual Theodore Roosevelt Workers' Compensation and Disability Management Awards.
When you get struck by a sudden idea, some people call that a "light-bulb moment." But when that idea is big enough to affect 20,000 people, it could be considered more of a "lightning moment."
That's the type of moment that struck JELD-WEN's Chief Operating Officer Bob Turner sometime in 2003. Learning of two fatalities at an associate's employer, Turner was deeply troubled. He returned to his home office with a renewed sense of urgency about his own company's safety efforts.
Kelly Beegle, vice president of risk management for JELD-WEN, an Oregon maker of windows and doors, recalls an early conversation with Turner. "He said, 'It seems like we've been making incremental progress with our safety program. What I want to do is make a huge impact on it, and I want you guys to put a plan together to help us accomplish that.' "
The risk management team saw the proposal as a significant opportunity, but the group was also a little daunted. JELD-WEN was already achieving a 7 percent to 11 percent improvement in claims costs year over year despite rapid growth, and had a better than average workers' compensation experience modification factors. Just how big of an impact was Turner looking for?
Really big, Beegle said. Turner threw a number out, right off the top of his head. "What about a number like 75 percent?" Turner suggested. "Let's make a quantum leap."
JELD-WEN, based in Klamath Falls, is a global manufacturer of wood, vinyl and aluminum windows and patio doors. The company makes wood and molded interior doors, wood, steel and Fiberglass exterior doors, plus garage doors. Worldwide, JELD-WEN has more than 200 operations and employs more than 19,000 people, nearly 8,000 of them in the U.S. That's a big jump from the sole millwork plant that opened in 1960 with 13 employees. Now here's the quantum leap: Since 2002, JELD-WEN has reduced its annual workers' comp injuries in the U.S. from 1,967 to 385.
Recognizing that vast improvement, JELD-WEN was selected the 2011 winner of the Theodore Roosevelt Workers' Compensation and Disability Management Award in the for-profit sector. The Teddy Award is sponsored by Sedgwick Claims Management Services Inc.
The dramatic leap proposed by Turner continues to inspire the company's positive focus and determined pursuit of injury prevention and risk control. The results have helped the company shrink workers' comp costs in a turbulent economy, and have put the firm in a better position to ride out the remainder of the economic storm.
Working from the premise that the best workers' comp claim, of course, is the one that never happens, JELD-WEN has knitted together a network of preventive programs that act, for all intents and purposes, the way a computer firewall might -- blocking threats at multiple points of entry.
One key way the company sets up a roadblock to risk is at the front steps of every facility. JELD-WEN puts more emphasis on pre-hire risk reduction than many of its manufacturing peers. The company uses an exhaustive combination of substance abuse screening, reference checks, reading and math testing, basic job skills testing and multiple management interviews.
It also contracts with Insight Worldwide to provide pre-hire integrity testing, which is intended to screen out job candidates likely to exhibit undesirable behavior, such as theft, workers' compensation fraud, violence or deception in the workplace.
Some people are skeptical about integrity testing, and Beegle admits that his group was, too, at first. After all, who's going to answer honestly about their undesirable behaviors, or about a propensity for deceit or violence? But one psychologist helped put it in perspective for Beegle and the rest of the team.
"They have a different baseline for a norm," Beegle said. "The people who will answer these questions [in the affirmative] have a different reality than the rest of the population. They think, 'Well, yeah, gee I may use drugs a little, but I'm not nearly as bad as that guy,' or, 'I may get into a scuffle with my brother or my co-workers but I don't get into fights as much as this other person I know.' "
The integrity testing alone results in hiring cautions for 22 percent of the firm's job applicants. And the company has seen how accurate the hiring cautions are. "When we go against the recommendation," said Woody Sine, JELD-WEN's director of risk management technology services, "when there's a caution issued and we hire anyway ? those people don't stay hired."
This rigorous pre-hire process eliminates about half of all job applicants from consideration. This level of scrutiny may seem excessive to some. And Beegle acknowledges that in a tight economy, the team has had to question whether the results justify the cost of such diligence. So far, the answer is still yes. New hires once accounted for at least 40 percent of JELD-WEN's workers' comp injury claims in a year. Today, that number is 12.3 percent.
ENGINEERING OUT RISK
JELD-WEN applies the same diligence to all new work additions. Every project, process or piece of equipment is carefully analyzed and put through its paces before it's deemed safe. That enables the team to engineer out issues in advance rather than chase after them later.
The current system came about when risk management was looking for a better way to get ahead of emerging risks -- not a simple task for an organization whose operations are largely decentralized. But the risk team came across an initiative called environmental process assessment questionnaire (EMPAQ), which had been launched by the company's environmental department.
"They were doing almost exactly what we wanted to do," said Karen Olsen, JELD-WEN's director of field services. "They were getting early looks at what facilities and research and development, and marketing and sales were talking about for new products and processes."
So rather than reinvent the wheel, risk management partnered with the environmental team, incorporating EPAQ into its own processes and creating an interface that would allow it to blend smoothly into JWReportit, the company's existing risk-control management framework.
When a JELD-WEN facility knows it will be taking on a new process or project, Olsen said, it submits information electronically into the EPAQ system. Once the data is entered, it's assigned to an audit module, and an email is generated and sent to the appropriate field service manager for review. Every step in the process is automatically tracked so nothing can fall through the cracks.
"About a year and a half ago, we had a new door line that was going into one of our Midwest facilities," Olsen said. "Instead of having to wait until the equipment was in the facility, we knew about it six to eight months ahead of time."
As part of the changes that took place in 2003, the risk management team decided to simplify the standard of measuring improvement by focusing on one key number for each facility: the workers' comp incident rate.
Making the number public changed the way employees and managers saw the worker's comp incident rate and the way they saw themselves in relation to it, Beegle said. "You start aligning people by who's the best and who's the worst and nobody wants to be on the bottom of that list. Everybody's pushing to get to the top."
JELD-WEN is now poised to begin formal benchmarking across its operations globally, with its JELD-WEN Gold Report. For starters, 14 key areas have been identified that will be benchmarked across all operations with a gold, silver, bronze or red status.
Every facility from Pennsylvania to Latvia will be able to see how its performance stacks up against peers. "It's truly leveraging the global footprint and looking at best practices," Beegle said. "We make the best possible use of that information to improve."
And while JELD-WEN, like most companies affected by the housing market, has taken some hard knocks, corporate executives have pledged their full support to the upcoming global initiatives. They remain steadfast in their commitment to keeping every employee safe at work. That's an important point to consider for other companies who may be tempted to scale back safety investments in a tight economy.
"I think there are companies still out there that regard cost of claims and the cost of premiums just as overhead like the cost of electricity," said Marsha Sorum, JELD-WEN's global claims manager. "And they don't really understand the true impact that you can have on that cost if you get in there and roll up your sleeves and get involved. And if you can bring the costs down ? by looking at it more as a cost and not as overhead, that's going to impact your bottom line."
November 1, 2011
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