Risk Insider: Andy Hosman

Data Matters; Regardless of Regulatory Shifts

By: | July 6, 2017 • 3 min read
Andy Hosman is the vice president of Operational Risk Solutions at Sphera. He has more than 17 years of experience in designing, developing, and implementing risk management solutions to help customers assess, mitigate, manage and monitor their risk more effectively. Prior to joining Sphera, Andy was a senior vice president of product management at Marsh ClearSight.
Topics: Risk Insider | Safety

On May 31, a Topeka, Kansas, worker was killed when a forklift pinned him against another piece of equipment, according to the radio station KVOE-AM.

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Tragedies like this one are far too common, and no loss of life from a workplace incident is ever acceptable. The U.S. Occupational Health and Safety Administration (OSHA) reports that 4,500 people die every year in the United States from work-related accidents, and studies have shown the cost of occupational injuries and illnesses to employers could be as much as $250 billion per year.

With the recent disapproval of OSHA’s clarification on its recordkeeping rule, known as the Volks Rule, there is a lot of focus on the amount of time that data should be retained.

Ultimately, the discussion should not be centered on whether companies should be legally required to maintain incident records for the current six-month period or the five-year period under Volks. Instead, the conversation should be focused on using data as an analytical tool that helps both employers and workers.

The key to improving workplace safety is understanding the causes of the incidents and near-misses that take place in a company and putting measures and systems in place to mitigate them. That’s where good quality incident data comes into play.

A larger, more statistically robust data set enables companies to understand the true cause-and-effect relationships between workplace incidents and the measures put in place to reduce their frequency and severity.

Six months of recordkeeping will provide only enough data for the employer to perform initial root-cause analysis across incidents. This information is valuable because it allows the organization to learn from those events and take corrective actions.

However, this limited scope of data might not allow for understanding the long-term effects of changes to workplace safety or broader trends across the organization. It also does not allow for effective benchmarking against an industry peer set to acquire more valuable predictive and prescriptive analytics, which are vital to maintaining safe workplaces.

So how much data is enough?

Incident data is a critical lagging indicator of the effectiveness of a company’s safety program. Without sufficient historical data, companies are more likely to see accidents repeat themselves. A larger, more statistically robust data set enables companies to understand the true cause-and-effect relationships between workplace incidents and the measures put in place to reduce their frequency and severity.

This allows companies to shift their focus toward leading indicators that are captured from proactive risk measures, such as assessments and inspections, to predict where incidents are more likely to occur and so companies can allocate their resources accordingly.

Aside from the analytical value of the data, the transparency of key incident metrics and key performance indicators to employees is important to drive a culture of safety. Employers that present workers with regularly updated graphs or dashboards of key safety metrics demonstrate that they care a lot about their workers’ well-being, and the more information companies collect will help mitigate risks.

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This level of transparency and access to information increases employee morale, reduces incidents and — ultimately — lowers insurance premiums.

The disapproval of the Volks Rule reflects a bare minimum level of compliance across U.S. industries, but that shouldn’t stop companies from retaining quality incident data for multiple years to realize the true value of their safety data.

A commitment to operational excellence through continued learning and improvement in safety has led to increased earnings and performance for major corporations, and the power of data is the key to this improvement.

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