Workers' Compensation: Keeping Your Employees and Your Bottom Line Healthy

By Fran Sarmiento Executive Vice President, Venture Insurance Programs | October 13, 2013

From the moment your guests register at the front desk to the housekeeping team knocking at a guest's door, your employees are the face of your hotel. That's why so much training goes into how employees interact with customers when they check them in, clean their rooms and cook or serve their food.

But it's difficult for your employees to maintain high service levels when they slip, fall or suffer strains and other injuries-all of which are a fact of life in hotels. That's one important reason to focus on employee safety and wellness. Another is the rising cost of workers' compensation insurance, medical care and claims.

In this article, I'll address how hotels can combine loss control, safety and wellness programs with effective claims management to keep a smile on the face of their employees, while also driving down workers' compensation claims and costs.

Rising Costs

Workers' compensation rates rose an average of about 10 percent through 2013, and were higher in some places like California. Insurance costs are cyclical, but a hotel's individual loss history, including both the frequency and severity of employee injuries, also has a direct impact on the availability and cost of its workers' compensation insurance for years to come.

Medical costs also continue to rise and affect workers' compensation claims. According to a 2013 report from the National Council on Compensation Insurance (NCCI), the average medical cost per lost-time claim increased by 3 percent in 2012, after a 3.6 percent increase in 2011.

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The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.