This morning, The Age released an article airing some dirty laundry. The piece, focused on losses and criticism of the WorkCover scheme, is centered on one number; $1.6B. That’s how big WorkCover’s deficit was this year, in Victoria alone. That’s a deficit on top of the premiums paid by employers. Workcover charges an average of 1.272% on all payroll in the state. My back of the envelope has this coming in (very) roughly $15B in premiums collected in the state, each year.
Remarkably, this deficit is an improvement on the previous year’s $3.9B. Which is to say something is very, very broken.
What frustrates, even enrages me, is the actual human lives this number represents. In my wheelhouse, which is physical injury (58% of all claims, depending on the report) we know the issue has been getting worse for years. People are taking longer to get back to work and many will have a secondary psychological injury off the back of the physical issue. People in consistent pain are 9x more likely to suffer depression and there have been multiple recorded suicides due to workplace injuries.
This article touches on mental health claims, and psycho-social risk, as these are the current trending problems made visible by new legislation. But let’s not forget we haven’t solved our old school problems either, the ones we’ve been talking about for decades. Physical health, mental health, financial health, social health: it’s all just health, and it all overlaps.
Bigger than claims
Looking at the claim numbers is the tip of the iceberg. When we look at the data we know there is an endemic pain and psychological health problem sitting behind the claim numbers. A great example of research in this space, by Helen Lingard and Michelle Turner, interviewed construction workers on the impact pain is having on their psychological health. None of these workers are out on workers comp claims, so on the books they’re ‘healthy’. But these interviews provide clear pre-claim insight, on their pain (both physical and emotional) and its relation to their work.
While we’re making some progress, I can say with boots on the ground experience, it’s often the industries with the highest claim rates that face the most hurdles when it comes to addressing these issues. Ironically, frontline and physical workers are often given less investment in wellbeing, because they’re harder to support;
“They’re too busy, they won’t engage, that’s just how we’ve always done it, we can’t change that.”
Often we see inertia within the business because of political dynamics. Many of the decision makers within organisations are in a tough spot: the more they learn, the more risk they find. No one wants to be blamed for kicking the hornet’s nest, and uncovering just how many issues there are. And I don’t blame them, I’d feel similarly. But this dynamic is what’s perpetuating the head-in-the-sand mentality, often hiding behind the veil of fiscal responsibility.
I don’t want to side step the negligence, disablement, deaths & prosecutions that exist on the more serious end of the spectrum, but it’s not my wheelhouse so I’ll leave that for other commentators. I would however like to call out examples of downright irresponsible management in employee wellbeing. A good friend has spent the last 2 months wrapped in anxiety for his future. He and his colleagues, government employed health workers, have just been told that their night shifts will soon lengthen from 12 hours, to 14 hours. This, in an industry carrying some of the highest claim loads in Australia, is like throwing a grenade on a grassfire.
Bigger than the regulator
My sense is we can’t place all the blame on WorkCover or the scheme itself. I’m not even sure they deserve half of it. What we’re looking at here is a collective denial of the reality of workplace health, on the same level as our denial of climate change.
Sure, there’s a $1B+ deficit, let’s hike the premiums. And let’s throw around the political hot topics like budget and mental health initiatives. Let’s throw more corporate events and let’s form more corporate councils. Let’s keep ‘investing’ in EAP (Employee Assistance Programs) with 2% engagement rates, pretending we’ve solved the problem for employees. In reality we’ve simply passed liability onto the service provider to protect the company, while not doing anything resembling an inclusive prevention strategy.
Let’s keep doing the same things we’ve been doing, and hope against hope for a different outcome.
Or we could try something new. We could have an honest, open conversation about the lip service given to employee wellbeing. We could talk about the disparity between prevention budgets, and insurance premium budgets. And maybe we can look around us, for different strategies and different stakeholders that can make a real difference.
The huge opportunity in front of us
As someone that spent 10 years+ in private practice before making the transition into workplace injury prevention, I can say hand on heart that we have some very low hanging fruit in front of us. Real options, with real potential for impact.
Because this problem didn’t start with a mismanaged scheme. It comes back to our entrenched beliefs around health, liability and our resistance to change. It comes down to our default as humans to be so fixated on short term risk management, that we harm ourselves in the longer run. We’d rather save $100 today, than $10,000 in a year.
Organisational change requires capital investment. Without it, we won’t see claim numbers drop, and the scheme will continue to buckle under the pressure.
The mentality shift we need is to acknowledge that our money is already being spent. We don’t need new budgets. We don’t need to reinvent the wheel. We just need to shift our focus from paying down liabilities, to investing in preventing them. To use a medical analogy, we need to be treating causes, not symptoms.
We cannot stop all claims. Injuries will happen. But we have rich data sets from inside and outside the industry articulating that the majority of claims are avoidable. It’s not a ‘what if’ question, but a ‘when’’.
In a capitalist society, money talks. And in this case, the money is screaming for change. This means welcoming the CFO’s and other arms of the business into the conversation, rather than lumping it all on the health and safety community. Because the cost of claims, and the legal constraints on corporations, mean that the problem technically falls under the remit of finance. It’s not a little side responsibility for the health and safety team to deal with (which has been the dominant corporate attitude to date). It comes down to dollars and cents, often millions of them, and therefore constitutes a responsibility to shareholders.
So let’s take a ‘stronger together’ approach. Let’s be brave enough to call the problem for what it is - an employee wellbeing crisis impacting the bottom line. Let’s engage the stakeholders in the business to understand employee wellbeing as the only true prevention strategy outside of job design. Better yet, let’s communicate employee wellbeing as a lever for increased productivity and increased revenue.
It’s gotta be better than injuring our people. And it sure feels better than lumping the responsibility on H&S teams, banging their drum in a business with no ears.
- Matt
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