The Dollars and Sense of RTW Programs

According to one study on worker absenteeism, the costs of a worker who is out of work for 2 weeks costs their employer 133% of his/her wages.  So, if an employee earns $500 per week, it will cost the employer $665 per week, or an extra $330 over a two week period. 

Various studies have been conducted on the cost-benefit and ROI of RTW programs.  In an article from the American Society of Safety Engineers, RTW programs can return $8 to $10 dollars for every $1 invested in a RTW program. 

In the same article, the authors cite another study which found that the direct costs associated with a WC claim (wage benefit payments, medical payments, and legal expenses) make up only 28% of the costs associated with WC claims.  The other 72% is comprised of indirect costs such as lost productivity, training, replacement worker costs, and other costs not covered by insurance.

A RTW program doesn’t have to cost you big bucks.  Many things can be done by making small changes.  When creating or identifying modified duty job opportunities, employers should look at the job tasks that other employees already perform.  This will help to ensure that the modified duty work is productive and serves a legitimate purpose, thereby helping reduce any costs associated with RTW.

Employers may report that they are paying more in wages or overtime to assist with the workflows as a result of accommodating an injured worker with restrictions, but consider the costs of paying them to sit at home, contributing zero productivity?  Compare this to the indemnity savings of offering modified duty work.

Don’t forget to count the claims that never became lost time claims because the employer was able to offer modified duty work to the injured worker within the statutory waiting period!

Before employers write off the notion of a RTW program, or even simply offering modified duty, we just ask that you consider all of the costs associated with that decision:  indemnity dollars, premium calculations, legal expenses, vocational rehabilitation costs, lost productivity, impact on employee morale, replacement worker costs, training/retraining, increased medical claim costs, increased health insurance costs, as well as other indirect costs associated with WC claims  Envision yourself trying justify your decision not to offer modified duty to an injured worker after calculating the aforementioned costs.  Coming up with a few tasks per day for a recuperating employee doesn’t seem so daunting, does it?