Workers Compensation Case Study

$3.0M > Reducing Workers Comp Project

Opportunity or Problem Statement: Xerox Service’s injury rate targets have not been achieved for the last 5 years, thereby negatively impacting the organization’s budgeted workers compensation costs.  This increase in injuries has an effect on the productivity of our employees and the employee satisfaction of both the injured employee and the other employee working to make up the difference of lost staff. In 2005, Xerox Service’s Recordable Injury rate was 19% worse than target and 13% worse than then target for Day Away from Work Cases.  In addition, year over year safety performance, as a whole, is not trending favorably.

Workers’ compensation costs are charged directly to the Xerox Service Operation’s budget and on average exceed $11 M per year. Most (77%) of the XSO’s did not achieve the year 2005 Recordable Injury target and the Day Away from Work Case rate target.

An effective injury prevention program will reduce injuries, and a “return to work” program will minimize overall workers compensation costs and lost productivity due to employee absences resulting from injuries.

Business Impact: Primary Benefit: Xerox Services workers compensations costs charged to the operating budget of the injured employee exceed $10M annually.  In 2005, the number of days lost due to an employee work related injury was 55 days lost / 100 employees and 29 days lost / 100 employees, for Technical Services and Managed Services respectively.

Improved injury prevention and return to work processes will decrease both direct (workers compensation) and indirect (employee productivity) costs.

Xerox Corporation absorbs the cost of the first $1mm of each workers injury.  Worker’s injuries over $1mm are covered within the insurance coverage procured for the corporation.

Goal Statement: The goal of this project is to reduce workplace injuries within Xerox Service Operations by a minimum of 10% compared to year-end 2005 performance.  Additionally, the goal of this project is to reduce Worker’s compensation costs by following disability management procedures that minimize the length of time employees are absent from work due to work related injuries. Workplace hazards to be identified and reduced to acceptable levels.  Employee practices and behaviors are consistent with Xerox expectations. Injury reduction actions result in reduced direct costs (i.e. workers compensation) and indirect costs (i.e. employee productivity).

In scope:
Injury prevention and return work for MS & TS.

• OSHA recordable injury experience
• Workers’ compensation experience
• XSO’s expectations of performance and process improvements for handling cases.
• Process for reporting of injuries and support for employee return to work.
• Case Management Process with Sedgwick

Out of scope: Insurance costs

• Administrative costs
• 3rd party administration servicing costs (TPA)

Process starts:
Employee interview Process

Process end:
Workmen’s Comp case closed from both injury and financial settlement.

“Reduce Workers Compensation Cost Project” Process Map

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Edward Florancic
(602) 617-9282