Reduce workers compensation premiums

DHL Worldwide Express
Wednesday, 13 December, 2006

When international express and logistics company DHL discovered its Australian workers compensation rating was below the industry standard, it was decided more could and should be done to improve workplace safety. If its rating continued at the same level, its premiums would cost almost twice the company's original estimate.

"The first step was to work collaboratively with GIO, our insurer, to draft a Service Level Agreement with agreed Key Performance Indicators (KPIs)," general manager at DHL Express Australia, Harlis Malkic said.

To help DHL achieve its goal of reducing the average cost of claims by 30% in the first year, GIO supplied the company with a dedicated claims team, a national account manager and financial support for a risk management project. DHL also had to hire a full time occupational health and safety advisor.

Simon Bradstock was brought on board to fill the position of national OHS advisor for DHL Express. His role was to advise senior management on high-risk activities that could lead to injuries and educate facility managers on conducting their own audits. This education program emphasised that workers compensation is not a fixed cost but something that can be controlled.

The key to DHL's approach was making safety a focus from the top down. "It was crucial to involve management from the start and encourage them to take ownership. So we made safety a KPI for all managers and linked it to performance reviews and bonus payments," said Malkic

"OHS is everyone's responsibility and assigning accountability to managers has helped drive the success of our OHS system. Monthly audits are a responsibility of managers that forms part of their KPIs and measures their commitment to safety," Bradstock said.

With facility management being the core focus of the business, facility managers played an important role in reducing premium costs as well as ensuring a uniform safety approach across all operations, from both commercial and compliance perspectives.

"On the ground, the facilities managers used a hands-on approach and became the key drivers behind making safety a priority in day to day operations", Malkic said.

Changing the culture of the workplace was equally a priority, along with integrating OHS into the business operations. DHL's system, the Transportation Standardisation Program (TSP) has helped the organisation create safe worksites.

"As well as aligning the OHS system to TSP, it was important to develop a culture of early reporting on 'incidents' or near misses," said Simon.

And since the system was implemented, the number of 'incidents' has actually increased at DHL Express, which according to Bradstock, is a positive result.

"Increased early reporting of incidents has helped us reduce the number of injuries, as it allows us to identify patterns of behaviour. We've had great results with early reporting in New South Wales, Western Australia and the ACT."

This increase in incident notifications also saw a decrease in claims.

DHL's communication strategy focuses on face-to-face communication with all workers compensation stakeholders.

"For partnerships to be successful, all stakeholders must be aware of each other's expectations, as well as agreeing on timeframes and outcomes," said Bradstock.

"We have a monthly briefing to our functional management team, a national OHS consultation program and also a strong relationship with GIO and our rehabilitation provider," Malkic said.

The combination of these strategies to lower claims costs and improve safety resulted in a refund of more than $1.1 million of DHL's premium. Its risk rating for workers compensation costs has also fallen to 42% below the industry average.

According to Malkic, this success comes from making safety a priority for the company at every level, dedicating resources and promoting a proactive and collaborative culture.

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