2017 NWCDC

People First

For Nordstrom, putting employees first isn’t a tactic, it’s a mission statement.
By: | December 7, 2017 • 2 min read

There is one key golden rule in the Nordstrom employee handbook: “Use good judgment in all situations.”

It sounds a little old-school, but that makes sense coming from a 116-year-old retailer.

From a workers’ comp standpoint, the other key rule is to treat the company’s 72,000-plus employees with the same level of care as customers, said Janine Kral, the company’s vice president of risk management. Kral delivered the keynote address at the 26th annual National Workers’ Compensation and Disability Conference & Expo on Dec. 6 at Mandalay Bay in Las Vegas.

Janine Kral, vice president, risk management, Nordstrom

“It’s as simple as keeping the employee at the front-and-center of everything we do,” said Kral, who leads a 75-person risk management team that includes 29 people dedicated to the company’s self-insured, self-administered workers’ compensation program.

That employee focus has always been a core value for the Nordstrom family and for the risk management team, said Kral. The company’s decision to self-insure three decades ago was actually driven by the dissatisfaction of injured workers.

Clearly Nordstrom was a proponent of employee advocacy long before that term joined the lexicon of industry terminology.

Claims examiners are trained to use a customer service approach to claims and to be active listeners. Nordstrom doesn’t encumber them with excessive rules, instead empowering them to rely on their good judgment

“The more rules you have, the further away you are from the customer,” said Kral.

Active listening also helps claims examiners identify high-exposure claims and determine which cases might benefit from nurse case management. Kral said the company’s claims examiners do an excellent job of looking not only at the initial facts of a claim, but also think ahead to what could impact outcomes down the road.

Nordstrom selects service partners carefully to ensure that everyone shares the same values and level of care for employees.

“If one person is negative, it can all go south,” said Kral.

Being employee-focused doesn’t mean that the company never denies claims, said Kral. But when they do, they have solid footing to explain why. And in some cases, the company has taken steps to help employees outside the scope of workers’ comp even when a claim wasn’t compensable.

“The more rules you have, the further away you are from the customer.” — Janine Kral, vice president, risk management, Nordstrom

In one case, said Kral, a 22-year-old employee was paralyzed from the neck down. The claim was ultimately determined to be non-work-related. But the company took the step of getting a special van to give him more mobility.

“As an industry, we need to get back to [focusing on] the worker in workers’ compensation,” said Kral.

Nordstrom’s longtime focus on a employee-centered program provides ample proof that the approach makes good business sense.

By the numbers:

  • Total cost of risk as a percentage of sales has decreased by 11 percent over the past five years.
  • Actuarial claim projections have also decreased by 15 percent over the past five years.
  • 107 percent closure ration in 2016.
  • Less than 500 indemnity claims in 2016 (out of 75,000 employees)
  • 48 percent decrease in narcotic prescriptions over the past two years. &
Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Black Swans

Black Swans: Yes, It Can Happen Here

In this year's Black Swan coverage, we focus on two events: An Atlantic mega-tsunami which would wipe out the East Coast and a killer global pandemic.
By: | July 30, 2018 • 2 min read

One of the most difficult phrases to digest without becoming frustrated or judgmental is the oft-repeated, “I never thought that could happen here.”


Most painfully, we hear it time and time again in the aftermath of the mass school shootings that terrorize this country. Shocked parents and neighbors, viewing the carnage, voice that they can’t believe this happened in their neighborhood.

Not to be mean, but why couldn’t it happen in your neighborhood?

So it is with Black Swans, a phrase describing unforeseen events, made famous by the former trader and acerbic critic of academia Nassim Nicholas Taleb.

We at Risk & Insurance® define these events in insurance terms by saying that they are highly infrequent, yet could cause massive damages. This year, for our annual Black Swan issue, we present two very different scenarios, both of which would leave mass devastation in their wake.

A Mega-Tsunami Is Coming; Can the East Coast Even Prepare?, written by staff writer Autumn Heisler, profiles an Atlantic mega-tsunami, which would wipe out lives and commerce along the East Coast.

On the topic of whether the volcanic island of La Palma, the most northwestern of the Canary Islands, could erupt, split and trigger an Atlantic mega-tsunami, scientists are divided.

Researchers Steven Ward, a geophysicist at UC Santa Cruz, and Simon Day of University College London, say such a thing could happen. Other scientists say Day and Ward are dead wrong; it’s an impossibility.

One of the counter-arguments is backed up by the statement that there has never been an Atlantic mega-tsunami. It’s never happened before and thus, could never happen here. See exhibit “A” above, re: mass school shootings.

Viral Fear: How a Global Pandemic Kills an Economy, written by associate editor Katie Dwyer, depicts a killer global pandemic the likes of which hasn’t been seen in a century.

Tens of millions of people died during the Spanish Flu outbreak of 1918.

Why it could happen again includes the fact that it’s happened before. The science on influenzas, which are constantly mutating, also supports just how dangerous a threat they pose to millions of people beyond the reach of antibiotics.

Should a mutating avian flu, for example, spread widely, we could see a 10 percent drop in GDP, mostly from non-physical business interruption.

As always here, the purpose is to do exactly what insurance modelers and underwriters do; no matter how massive the event, we create scenarios, quantify possible losses and discuss risk mitigation strategies. &

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]