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Temp Staffing – Risk Management Fundamentals

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The operational focus of a staffing firm is to match individuals seeking employment with jobs at customer sites. The extent to which a staffing firm is successful and profitable depends on how well they understand and manage the inherent risks associated with the industry. Typically, a staffing firm’s greatest expense after payroll is Workers’ Compensation insurance and its related costs. A risk management program specifically designed for the unique challenges of staffing companies is an important element in preventing and controlling losses, as well as maximizing profitability.

Staffing firms have inherent difficulties in controlling the cost of Workers’ Compensation:

  • Temporary employees work at job sites where the staffing firm is not in direct control and has very little direct supervision
  • There is a high turnover rate of both employees and assignments
  • Applicants are often transient in nature
  • Staffing firms typically deal with lower wage rates

It takes a team effort from staffing firm employees to manage these challenges, along with a willingness to execute risk management best practices on a daily basis.  

Implementing a comprehensive risk management program may seem burdensome and all-consuming, but investing a marginal amount of time will have a positive outcome on daily operations. Reduction of accidents, injuries, claims, and employee lost time creates a positive culture change and increases profits. A “work smarter, not harder” philosophy applies to a firm’s risk management efforts—each individual at a staffing company plays a vital role in controlling Workers’ Compensation costs. From receptionists and recruiters to salespeople and branch managers, every employee has ownership in the risk management infrastructure. Each person’s duties are building blocks in the overall system and success of the risk management concepts.

So what does a staffing firm’s risk management program look like? It can be divided into two parts: loss prevention and loss control. Loss prevention is everything the staffing firm does to keep an accident or injury from occurring. Loss prevention tactics include pre-screening, the application process, employee interviews, employee orientation/training and client selection. Loss control is what must be done by the staffing firm once an on-the-job accident or injury occurs. Loss control strategies include doctor/clinic relationships, accident/injury protocol, accident investigation, modified duty, and TPA/carrier communication. A staffing firm has the most control during the loss prevention process, where they can determine who will be hired, how they will trained, and what clients they will do business with. The obvious goal is to prevent injuries from occurring in the first place, so emphasis should always be placed on loss prevention. 

RPS is proud to have a team of experts who do just that - Workers' Compensation for the Temporary Staffing Industry. They understand the unique challenges and have dedicated their insurance careers, over 40 years combined, to ensure your clients are properly covered.

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