Workplace safety is an employer’s responsibility, regardless of the size and industry. Unfortunately, workplace mishaps happen more often than you imagine, even in the safest offices and factories. Imagine how the cost of compensation claims can drown your business if you fail to get insurance.
While insurance coverage can be the best way to safeguard your business, things can get complicated if you run a staffing agency. You may get overwhelmed with the calculations of your insurance premium when you don’t know the number of employees on board at one time. Additionally, their job classifications can be confusing.
With more than 12,500 employment and recruiting agencies in the US, a lot of business owners may be struggling with compensation and insurance questions. The concern is even more serious, considering 3.1 million Americans are working in the staffing industry. Temporary staffing agencies may go wrong with obtaining and maintaining compensation insurance.
But you need not stress about the situation, despite the inherent complexities of your business model. You can rely on these best practices to ensure the safety of your business and workers.
Establish a Process
Establishing a process to determine the responsibility for coverage is the best start. In most situations, the agency has to buy staffing workers’ compensation insurance as these workers are considered their employees, even if they work for another company.
In some cases, the company hiring employees may provide it, specifically when the temporary position is likely to become permanent. As a staffing provider, you need to ensure that the temporary employee has coverage by your client.
Nixer Comp notes that staffing agencies should adopt an advocacy-based claims model to ensure the best for injured workers, staffing agencies, and host employers. Everyone in the picture should follow relevant guidelines and procedures that are fair to all.
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Pay Attention to Classifications
The US law classifies the workforce into various categories, such as full-time employees, temporary workers, and independent contractors. Classification plays a significant role in managing payrolls, taxes, and worker compensation. Wrongly classified employees may lead to higher than necessary premiums. Likewise, you may end up with underpayment penalties.
Running a staffing company can multiply the employee classification headache, but a little effort can save you from trouble. You can seek expert advice if you aren’t sure about the classification process.
Onboard Safety-Conscious Employees
According to the US Bureau of Labor Statistics, 5,190 fatal work injuries were recorded in 2021, which indicated an 8.9 % increase from 4,764 in the previous year. Besides fatal injuries, millions of minor ones happen at American workplaces every year. Many of these are avoidable as they occur due to negligence. Safety consciousness can make a world of difference.
Hiring people with a safety-minded attitude can save your staffing company from the complexity of handling compensation claims in the first place. You can implement the following steps to ramp up your hiring process and bring the right people on board:
- Perform stringent background checks
- Require references from previous employees
- Take note of the reasons for quitting the previous job
- Ask questions to assess their mindset on safety
- Implement a safety training program at the outset
- Commit to providing continuous training
Perform Client Due Diligence
While employees are on one side of the safety equation, your clients are on the other side. Reputable staffing agencies perform due diligence for every prospective client to ensure their workers get a safe work environment with them. Here are the measures you can take to implement a due diligence process:
- Go through the workplace safety policy of the prospective client
- Formulate an in-house safety assessment policy
- Perform a pre-placement inspection
- Decline contracts if prospective clients do not match the standards
- Schedule follow-up inspections to assess compliance
Learn From Every Claim
Statistics suggest that employers face 2.8 workers’ compensation claims for every 100 full-time workers every year. The numbers are equally disconcerting for temporary workers. While you cannot avoid claims altogether, learn your lessons from them. Well-managed agencies look for insights and use them to ensure their employees’ welfare.
Digging deep into the events leading to the compensation claim may reveal correctable flaws in your recruitment, training, and client inspection protocols. You can rework your risk reduction guidelines to minimize mishaps and prevent claims in the future.
Summing Up
Obtaining workers’ compensation insurance can be tricky for temporary staffing agencies. From struggling with classification to managing periods of fluctuation, you can go wrong in several ways.
But you can overcome these challenges by ensuring the best safety standards in-house and at your clients’ workplaces. Implementing an effective workers’ comp insurance program is equally crucial.
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