PEOs: Consulting on Safety

Scott A. Johnson is a safety engineer at Epix, a professional employer organization in Atlanta formerly known as Payroll Transfers.

Professional employer organizations offer strong safety departments to help clients deal with OSHA regulations, government compliance, and loss control, which can result in better employee morale and productivity, as well as greater profits for the client.

Professional employer organizations (PEOs) gained momentum in the 1980s because of the mountain of employer workplace and employee benefit regulations created by the local, state, and federal governments. Leasing offered the employers the ability to "farm out" this burden and concentrate on their business interests rather than the governments' business with their business.

Leasing employees also provides employers with the needed expertise in complying with these regulations and in controlling costs through risk management and proactive safety engineering of the workplace.

The courts and several government agencies have helped define the relationship and responsibilities of each party entering into an employee leasing agreement. Within the scope of these definitions lies the catalyst for the double-edged sword of safety and its meaning to both the PEO and the client.

Most PEOs have clients with 10 to 100 employees. These clients often fit well into a profile of companies that need the types of PEG services and expertise that the clients don't have and could not afford.

A professional employer organization offers a strong safety department to help the client deal with regulations of the Occupational Safety and Health Administration, government compliance, and loss control.

If the safety program is strong and the client committed, these services can result in better employee morale and productivity, as well as greater profits for the client.

Benefits for Clients

* Safety Engineering Services: Most clients could not afford to hire a consultant or in-house safety expert. Any reputable leasing company will send safety engineers to its clients on a regular basis to perform job safety analyses and safety audits, National Fire Protection Association (NFPA), and Occupational Safety and Health Administration (OSHA) regulations assistance and interpretations, accident investigations with fault-free analysis, and all required and recommended training.

* Decreased Accidents: Through the implementation of a solid safety program, training engineering, and follow-up visits, the safety engineer is able to reduce the number and severity of accidents. Although the day-to-day existence in the workplace is not an exact science, the client should implement a zero tolerance mode for dangerous behavior and the work environment.

Often the safety engineer must make a psychological judgment on what motivates the client to dictate his avenue of approach in gaining the client's full support. The PEO safety engineer will ensure that a comprehensive safety and health program that encompasses the following will be implemented.

* Management Support: Participation by top-level management is the most important part of any loss prevention program. Without management's support, it is doubtful that anything will ever be accomplished in regard to safety.

A formal loss prevention program should start off with a written statement that makes it clear that management is committed to the loss prevention program, safe working conditions, safe operating practices, and property preservation.

It is important that all of the supervisors and employees know that the loss prevention program will be monitored by management and that management will take the necessary actions to carry out the above goals.

* Loss Prevention Organization: The safety engineer must provide adequate training for organized leadership of a loss prevention program.

For a loss prevention program to function efficiently, it must have a manager who oversees the entire program. There will be many other people below the manager involved in the program, such as facility supervisors and employees.

But the manager will ultimately be responsible for making sure that the necessary recommendations are implemented and that the entire safety program is administered uniformly.

The safety committee is one of the most important parts to any loss prevention organization.

The safety committee-should be responsible for inspecting the plant, investigating accidents, making recommendations to prevent future accidents, and to aid in teaching safety to the personnel of the company.

* Supervisor Participation: Provide active participation by the supervisors in the loss prevention program. The supervisors are especially important in this program because they spend almost all of their time within the facility and know the operation first hand.

In many cases, management is often removed from the actual work done by the employees and does not have the knowledge that a supervisor does. Supervisors should be in charge of investigating accidents, educating employees, reporting any unsafe conditions and assisting the safety manager.

By immersion into this safety culture, supervisors will place the same emphasis on safety as they do on production.

* Employee Education: Implement employee education for new and long-term employees in regard to proper safe practices, applicable safety standards and any other subjects that will aid workers to function at their job more safely. Historical studies have shown that in the first few weeks after an employee is hired, that employee is much more likely to be involved in an accident than someone who has been employed for several years.

Many new employees are unfamiliar with the processes used in the plant, may be young and immature, or may not have been properly trained in the job into which they are placed.

Educating employees as soon as they start work is an important step in the loss prevention program.

* Hazard Control: The PEO safety engineer should evaluate any process or machine that can cause injury to employees to ensure that all safety precautions that can be taken are taken. For example, all machines should have the proper guards in place, the proper signs posted, and the proper machine controls installed.

The control of accident hazards in facilities is especially important because regardless of the extent of the full immersion training that includes the full support of his supervisor and management, an employee may still be injured by a machine not properly guarded or maintained.

* First Aid and Medical Program: The safety department should provide adequate first aid training, if warranted, and a comprehensive medical program in the event that an accident does occur.

There should be individuals within the plant who have been trained in first aid and can assist the injured employee. A medical program should also be introduced to assist in the development of ergonomic standards for employees, return-to-work programs, rehabilitation, etc.

* Self-Inspection: Safety engineers should foster and encourage the self-inspection program to assist in detecting unsatisfactory working conditions. The safety committee with the guidance and training of the safety engineer should conduct these inspections.

Machine guards can work themselves loose, chemicals can spill out of containers and employees may not follow the correct safety procedures, etc., regular inspections will assist in detecting these facility conditions.

* Accident Investigation: Safety engineers will investigate all warranted accidents immediately and thoroughly. A record of who was involved and why the accident happened should be recorded immediately by the responsible supervisor. The report should be reviewed to determine what action should be taken to make sure that the accident does not happen again.

* Increased Morale/Productivity: A "Partners in Safety" culture can be created in which the employees feel they are apart of something bigger and better organized. This creates a synergy where the actual interaction between the client and the professional employer organization creates an effect greater than the effect of the client acting alone. The resulting mode is sometimes known as the Hawthorne effect; that is that the employees interpret this attention to them as a reflection of their "specialness" and thus morale and productivity improve.

* OSHA Compliance: Since its creation, the Occupational Safety and Health Administration has been accused (from time to time) of being overly aggressive and unreasonable in its citation and fining process. These stories, whether urban legend or factual, permeate the workplace and create fear with the owners of businesses. To OSHA's credit, they are attempting to change their image and their methodology to a user-friendlier mode.

Nonetheless, companies fear the fines that noncompliance may bring them and having a safety engineer available has been much sought after resource for PEO clients. Generally, the courts and OSHA have concluded that because professional employer organizations do not have control over the hiring, firing, disciplinary actions, or work habits of the employees, the primary employer (client) is liable for citations and penalties. This simple undeniable fact makes it easier to convince clients to fall in line with the safety engineer's recommendations.

* Better Experience Modifiers: Many of the clients that come to PEOs have received workers' compensation modifiers of greater than 1.0 as a result of frequent or severe workplace accidents. This translates into higher insurance premiums and substantial dollars that could otherwise be put into working capital. Often it is the lack of an adequate safety program that contributed to the number of accidents client accumulated.

* Training: Safety and loss control training can be expensive to say the least. Professional safety engineer consultants can cost an employer $300 an hour to $2,500 a day in training fees, which is a far sight more than the cost to the average client of a PEO.

Often these training programs are considered part of the PEO's loss control program and are provided free of charge. OSHA mandates training like this, in some cases, as an integral part of a comprehensive safety and health plan. Safety training is the catalyst of a program that will not only change the environment, but the culture of the client's facility.

Benefits for PEOs

* Decreased Workers' Compensation Costs: The implementation of a strong client-based safety program is instrumental in achieving a zero tolerance standard for accidents. The money spent on workers' compensation claims is money the professional employer organization would rather use as operating capital.

* Savings on Insurance Carrier Premiums: For PEOs, showing a minimal loss in workers' compensation dollars and the placement of a strong safety program is the important first step in negotiating rates and contracts with insurance underwriters. Profitability, as usual, is the name of the game here and showing these factors can bring hundreds of thousands of dollars in profit to the bargaining table.

* Direct Link with the Client: In addition to being safety professionals, the safety engineer also acts as an ambassador of the professional employer organization. The safety engineer is a familiar face to the client and may act as a go between for any problems the client may have had. This image is of a consultant and "partner in safety" that was brought in to protect the company and its employees. A strong safety engineer develops an implicit sense of trust with the client because of the nature of the relationship.

The safety engineer is viewed as the PEO's on-site representative if not the PEO itself. Not only does he represent the PEO, he is the PEO.

This kind of public relations is of great value to the professional employer organizations that see it as added justification for the traveling expense of sending the safety engineer to see the clients.

* Selling Point for Marketing Representatives: Unlike some situations in companies whose safety professionals are seen as a necessary evil, the PEO safety engineer may be seen as a great benefit. The marketing representative will identify the potential client's liability.

Most clients are lost in the myriad of regulations in governmental compliance, and OSHA regulations are no exception. No client wants to be the first "test case" in court on a liability or safety issue. The safety engineers are seen as "hired guns" that come in to give the small- to mediumsized employers the same abilities and advantages that a Fortune 500 company enjoys.

COPYRIGHT 1999 Axon Group
COPYRIGHT 2004 Gale Group