See a Massive Reduction in Costs With Physical Abilities Testing

[fa icon="calendar'] Nov 25, 2015 8:00:00 AM / by Deborah Lechner

High workers' compensation costs are a significant issue for employers today – and a growing one, as those costs continue to rise. According to The National Council on Compensation Insurance (NCCI), premiums rose by 7.3 percent for the average business in 2013. Additional statistics:
  • Average indemnity costs for lost-time claims rose yet again, going up by 2 percent in 2013.
  • Medical costs of the average lost time claim were $28,800 in 2013, an increase of 3 percent over 2012 figures.

There are also the indirect costs of injuries to contend with, which, according to OSHA, can be up to 4.5 times as much as those direct workers' compensation costs.

Reducing workers' comp injuries is your best defense against these rising costs, and a good Physical Abilities Testing (PAT) program can decrease your injury rate substantially. However, many employers – especially those who have already made significant investments in workplace safety – wonder whether or not another safety investment makes financial sense.

Will a PAT program make a big enough dent in those injury rates to justify its costs? According to research, it certainly can. In fact, studies have shown that a well-designed and properly implemented Physical Abilities Testing program can produce massive cost reductions.

A study done among healthcare employees provides a good example of the impact of PAT. This study was done to assess whether pre employment Physical Abilities Testing could offer better results in reducing injury rates for nursing staff than traditional safety measures, such as utilizing patient handling equipment. Nursing staff have physically demanding jobs, and injury rates are consistently high. Pre hire tests were administered to 270 patient care staff, then injury rates and costs of the tested group compared to those of 514 similar employees hired before the PAT program was begun. Results showed that the tested group had 91 percent fewer injuries than the untested group, and injury costs for the tested group were 93 percent lower. Researchers calculate the total return on investment for this PAT program at $4,501,059.

In another study, Physical Abilities Testing was used to assess 2,400 uninjured, healthy candidates for employment at a large food production plant. Results showed that candidates who passed a PAT before hire had substantially lower injury rates than those who did not, with a 3 percent rate among tested employees, as opposed to 33 percent in the untested group. Researchers concluded that Physical Abilities Testing was a cost-effective means of reducing workplace injuries.

In a two part study, the physical demands of warehouse jobs in three separate industries were thoroughly documented via job demands analysis. That information was used to develop Physical Abilities Tests to assess the ability of job applicants to meet those demands. In each industry applicants were tested, then placed on the job. Management was not informed of the test results. After a two-year observation period, injury rates and retention between employees who passed their PAT and those who did not were compared. Results showed a 47 percent drop in injury rates among those who passed the PAT as compared to employees who did not, and 21 percent higher retention. Additionally, as PAT was implemented in other locations, injury rates for tested employees were compared to those of workers hired before the PAT program began. That comparison showed a 41 percent reduction in workers' comp injuries in tested employees.

Since no two businesses are alike, the impact of Physical Abilities Testing on injury rates and costs will vary from one business to another. However, what these studies show is that you can certainly expect a well-designed PAT program to deliver impressive results for your company's bottom line.

How much can you save on Workers' Comp costs

Topics: Workers' Compensation Costs

Deborah Lechner

Written by Deborah Lechner

Deborah Lechner, ErgoScience President, combines an extensive research background with 25-plus years of clinical experience. Under her leadership, ErgoScience continues to use the science of work to improve workplace safety, productivity and profitability.