In the ever-evolving Australian workforce, the old adage “people are our most important asset” has never been more relevant. Protecting and nurturing the well-being of your employees isn’t just a moral imperative but a legal obligation. While all Australian employers must prioritise workers’ compensation to ensure the safety, health, and security of their workforce, large and medium employees also need to uncover effective ways to manage their worker’s compensation premiums.
Premium rates for workers’ compensation are on the rise across the country, driven by new types of claims as well as increasing claim frequency and severity. Also in some areas, such as NSW, the State Government has directed an average premium rate increase of 8%, to be applied each year over the FY24, FY25 and FY26 years. Higher-risk industries such as blue-collar workforces are seeing up to 16.7% in annual premium rate increases.
Employers can safeguard their workforce and business, by using effective strategies to manage the physical and financial risks associated with workplace injuries, which will also help to foster a positive workplace culture, improve employee retention, and bolster reputation in a competitive labour market.
Mental Health: changing the landscape of workers compensation
An alarming trend in Australia is the increase in mental health-related workers’ compensation claims. In New South Wales, as of August 2023, the average cost of a mental health claim was $51,808, with an average claim duration of 320 days. Large corporate businesses account for 62% of all mental health claims in NSW.
These recent statistics, from iCare, highlight the urgent need to address mental health issues in the workplace.
This is one of the key trends, if not the leading trend, impacting the effective management of workers’ compensation programs.
Three effective ways to manage workers’ compensation premiums
Effectively managing workers’ compensation is paramount, especially for medium and large businesses. To control costs and support employee wellbeing, the team from Hewitt Hicks (Omnisure’s worker’s compensation authorised representative partner) recommends that employers consider the following strategies.
1. Reviewing Policy Structure to Minimise Premiums and Risk Exposure: There are plenty of options to explore when assessing and designing your optimal policy structure. Ensuring industry classification rates are correct and accurately reflect your business activities is just one example. Talk to a broker or specialist consultant to understand what additional options might be available to your business.
2. Strategic Claims & Injury Management: Efficient claims management is crucial in controlling workers’ compensation costs. Early intervention on claims and ensuring injured employees receive prompt medical care and are guided through the claims process effectively is paramount to improving return-to-work timeframes. Establishing return-to-work programs that facilitate an employee’s swift reintegration, including modified duties, shall greatly reduce the cost to the business from an operational perspective, as well as the premium impact due to the cost of the claim.
A proactive and integrated claims management approach is a must for all organisations. From incident reporting to lodging a claim, analysis of liability, early intervention strategies, access to specialist provider networks, ongoing active claims and injury management, to proactive promotion. All will lead to improved return-to-work outcomes and cost containment.
Remember to build avenues and support structures that help people who have experienced a psychosocial incident or claim, for example, bullying. The return to work pathway for someone who has experienced a mental health injury can be very different from someone who has sustained a physical injury.
3. Loss Prevention and Recovery Model: For large employers in New South Wales considering the Loss Prevention and Recovery Model can be a highly effective way to manage your workers’ compensation program.
The starting point here is to conduct a feasibility study to assess eligibility and financial viability, weighing up the potential benefits and risks. From there you can consider the facilitation of insurer/claims management provider tenders and assess your Work Health and Safety Management System as well as Workers’ Compensation policies and procedures.
This is a more detailed approach to effectively managing your worker’s compensation and may require external specialist support to help you implement this model.
There are many effective strategies that businesses can adopt to proactively manage workers’ compensation, and help to balance employee wellbeing and controlling costs. We know it’s hard to keep on top of this ever-evolving landscape and stay informed which is why Omnisure partners with Hewitt Hicks. They are our Workers Compensation Insurance authorised representative.
Hewitt Hicks are the experts in workplace and people risk, and with all, that’s happening in the market. They conduct a complimentary forensic review of current policy structures and complete extensive premium modelling to design and implement the optimal policy structure and program for clients. So if it’s time for you to consider your Worker’s Compensation insurance and risk management approaches then please talk to us. Give us a call at 1800 958 384 or email us at hello@omnisure.com.au.
