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Risk in Context

Wear it Well: How Technology Can Cut Workers’ Compensation Costs

Posted by Thomas F. Ryan September 28, 2015

Consider two electricians, Jim and Nancy, working on construction projects in Cleveland. Both assume that the power to the circuits they’re working on has been shut down. However, Jim taps in and suffers severe burns. He’s hospitalized, out of work for months, and requires weeks of light duty on his return.

Across the city, in a similar situation, Nancy was about to start work when a sensor in her vest lit up and gave a high-pitched warning, telling her the power was on in her work area. She made sure it was shut off, and worked without incident.

Her vest is one application of wearable technologies, which are moving beyond the familiar devices used to track miles run, calories burned, or other parts of a fitness regimen. Now, many employers are finding that such technology can help increase employees’ health, reduce accidents, and cut workers’ compensation costs.

Wearable Sensors to Keep Employees Out of Harm’s Way

Wearable sensors can help employers track and record the movement of employees, providing two important workplace safety applications:

  1. Tracking employees’ locations and alerting them to danger. For example, if a worker wanders into the path of a forklift, sensors can warn both the wayward employee and the forklift driver.
  2. Capturing body movements and comparing against reference data. This can identify bad habits — such as improper lifting techniques — and help employers develop best practices to reduce injury rates, improve productivity, and promote safety.

Wellness

Data from wearable devices can complement what many companies already collect through voluntary health assessments, biometric screenings, and other means. The result is an ability to identify employee health risks and make important decisions about wellness programs. For example, if data indicate that your employees are struggling to find time to exercise, you might consider building an onsite gym.

Wearables also facilitate goal setting and tracking, helping employers to incentivize employees to stay healthy. Some employers offer health insurance savings, gift cards, or other rewards for attaining wellness goals and reporting progress through web applications connected to wearable devices. Others reward groups of employees — for example, awarding a prize to the office that takes the most steps in a given month.

As wearable technology advances, employers will have more opportunities to improve safety and reduce workers’ compensation costs. Consider talking to your risk advisors about how you can incorporate wearables into your wellness and safety programs.

For more about this topic, listen to the replay of our recent Workers’ Compensation Center of Excellence webcast, Creating Safer Workplaces and Reducing Costs through Predictive Analytics and Technology.

Thomas F. Ryan

Tom Ryan is a managing director and Market Research Leader in Marsh’s Workers’ Compensation Center of Excellence. He is responsible for developing market research, insight, and other content on emerging issues, trends, regulatory, and other changes that affect the workers’ compensation market.