Managing expenses is vital to staying profitable in today's ultra-competitive business climate, and workers' compensation costs have been rising steeply over the past two decades, placing an ever-increasing strain on bottom lines.1
With the average cost of a worker’s comp claim having risen more than 500% between 1991 and 2012, employers are moving to control those costs by making pre employment testing programs a standard part of the hiring process. Here we'll look into the role of two of the most effective strategies for lowering work place injuries – and with them, worker’s compensation expenses: pre-hire drug and physical ability testing.
About Post Offer Employment Testing
While it seems obvious that employees under the influence of alcohol and drugs – including legally prescribed ones – are more likely to be hurt on the job, the reality is probably worse than you think: According to the U.S. Department of Labor, substance-abusing employees are 5 times more likely to file a workers' compensation claim than the average employee. With the average claim now exceeding $28,000, the payback on testing has never been greater. Many studies on the effects of drug and alcohol testing for reducing injuries show significant results. In fact, a study conducted at Southern Pacific Railroad showed a 71% decrease in accidents after implementing a pre-hire drug testing program.2
As effective as it is, drug testing alone is not enough. Physical Abilities Testing (PAT), a less well known but equally effective injury reduction strategy, can also offer a significant boost to workplace safety. Used alone or in tandem with drug screening, especially for positions that require a certain level of strength, agility, coordination, and/or endurance, PAT evaluates an applicant's functional ability to meet the physical requirements of the position for which he or she has applied. The goal is to screen out potential employees who would struggle to manage those physical demands, placing them and their coworkers at higher risk for workplace injuries.
Since physical abilities testing must be job-specific in order to comply with federal employment regulations, the process of implementing these post offer testing programs begins with a thorough job demands analysis (JDA). The JDA helps identify the specific physical demands of essential tasks and functions expected of potential employees. Once those key elements are identified, each potential employee can be tested according to that established criteria, allowing an accurate, objective assessment of their physical ability to function safely and effectively in the workplace.
Post offer physical abilities testing offers employers objective and effective methods for screening out potential new hires that pose a greater than average risk of injury as employees.
The Impact of Pre Employment Testing on Workers' Comp Costs
Post offer employment testing has also been shown to have substantial benefits in reducing workers' comp costs. For instance, in one notable study on the effectiveness of physical abilities testing in reducing workplace injuries, researchers used a formal PAT program to assess the ability of new hires to meet the physical demands of their new jobs before placing them in those positions. These tests were administered to new employees at 175 locations and in three separate industries. After monitoring the employees for a period of two years, researchers found that new hires that had passed physical abilities testing had a 47 percent lower worker compensation injury rate than those who failed that testing.
And that, in a nutshell, is why pre-employment testing, especially drug and physical abilities testing, should be every employer’s go-to strategy for lowering workers' compensation costs. If these tests aren't part of your hiring process, they should be; by adding them you will minimize the impact of workers' compensation injuries on your bottom line and significantly reduce workplace injuries – and related costs – before they happen.
(2) Taggart, Robert W. "Results of the Drug Testing Program at Southern Pacific Railroad." Drugs in the Workplace: Research and Evaluation Data. Eds. Steven W. Gust, Ph.D. and J. Michael Walsh, Ph.D. Rockville, MD. NIDA. 1989)
