Reducing Workers' Comp Risk in Restaurants

If you hurry the hiring process to get a heartbeat in the kitchen, you may end up buying yourself a worker's compensation claim. Here are six tips for mitigating this risk in restaurants.

1. Evaluate the ongoing impact of the pandemic

Hiring managers continue to face a talent shortage in the hospitality field. During the height of the pandemic, numerous workers left the industry altogether or relocated permanently to geographic areas with fewer public health restrictions.

To stay afloat and meet pent-up customer demand, many employers began hiring any reasonable applicant, including people without prior hospitality experience. Short staffing also led to quick onboarding, sometimes without in-depth safety training. Frequency and severity of workers’ compensation claims began to climb from avoidable risks such as improper lifting technique, knife injuries, and equipment accidents.

If you’ve seen an uptick in claims, analyze the details to determine where additional training and mentoring could reduce the risk of similar incidents in the future.

2. Look holistically at employees’ needs

To maximize margin, some restaurants keep wages as low as possible and hours under the threshold for employee benefits. As a result, many hospitality workers cobble together two or more part-time jobs to cover basic living expenses. They may be working odd hours, seven days a week, short on sleep, and barely scraping by. Tired employees make more mistakes and have more accidents. And when employees are living hand-to-mouth and scared, they sometimes become litigious, which can add to your claim exposure.

To mitigate risk, get creative in helping employees meet basic needs. Though it’s counter-intuitive, investing in the wellbeing of your workforce can boost margin by reducing attrition, absenteeism, workers’ comp claims, and associated expenses.

In high cost-of-living areas, some employers provide subsidized housing as an employee benefit to ensure their people have a place near work to sleep and recharge. Compare the cost and tax benefits against a potential workers’ comp claim, and you may find the math creates a win-win for you and your employees.

3. Choose restaurant workers who fit your culture

Finding right-fit team members starts with articulating your unique value proposition, customer service philosophy, and the workplace culture you want to create. What draws customers to you? Generally, patrons are looking for more than a tasty burger or clean carpet. They may want to create memories, celebrate a special event, have a romantic evening, enjoy music, laugh, relax, build community, or other goals. You want employees who understand your vision and are enthusiastic about bringing it to life.

The old story of the bricklayer applies here. When describing their jobs, do your team members say they are laying bricks or building a cathedral? Cathedral builders are problem solvers, innovators, and people who persevere through challenges to build something great. If they do get hurt on the job, these employees are less likely to prolong a workers’ compensation claim. They want to get back to cathedral building as soon as they can, because they’re excited to be part of your mission.

4. Incent employees to refer their friends for jobs

When people are enthusiastic about their workplace, they’re eager to tell friends and family about open positions. Since employees know their friends’ strengths and weaknesses, they’re in a unique position to identify strong candidates.

Ask your employees, “Who do you know that would be a good fit on our team and enjoy working here?” A formal employee referral program gives team members a chance to create their own community. They earn bonuses for each referral hired. Some employers create a tiered system where employees receive additional dollars once their referrals reach three months, six months, and one year of employment.

Having friends in the workplace increases the likelihood of sticking with a job. Strong employee retention boosts your margin because recruiting and training costs drop. Also, more job experience typically equates to fewer accidents. If a workplace injury occurs, your team’s strong camaraderie can inspire a faster return to work.

5. Create a supportive return-to-work program

When you have the right people on your staff, they often want to get back to work as soon as possible after an injury, because they miss the community and sense of purpose.

An innovative return-to-work program can mitigate workers’ compensation costs, while also protecting against the depression that some people experience when injured. Even if an injured employee is unable to do their regular job, they may be able to contribute meaningfully in a different way. For example, you can provide a chef with a laptop to write down recipes or develop a training manual for new hires. Consider engaging an injured employee as a mentor for a newer team member.

Each return-to-work scenario involves a three-way partnership between the employer, employee, and doctor. You need a clearly defined process for how you’ll work together to brainstorm options and determine creative accommodations.

6. Enlist employees to share their skills and best practices with the team

In one restaurant, an experienced chef honed his knife before every use and was fastidious about knife safety. His supervisor tapped him to train the whole staff.

Each of your team members brings unique skills to the job that could be helpful for other employees. Engaging them to teach and mentor conveys that you value what they bring to the table. You elevate the knowledge of your whole team, and employees feel their contributions matter, which can boost engagement and retention.

When peers reinforce safety, through educating and watching out for each other, you reduce your risk of workplace accidents.

Restaurant risk management involves more than insurance

In hospitality, your hiring decisions and corporate culture can affect your workers’ compensation costs down the road.

Mitigating this risk requires active management — an ongoing process of analysis and innovation. If you view risk management as a transaction, passive purchase, or product you buy once a year, you can end up hurting your bottom line.

Sometimes, managing risks requires behavior change on the part of restaurateurs. This can involve rethinking how you recruit, train, manage, and motivate your team. As these changes produce a better customer experience and safer workplace, you protect your margin and set the foundation for robust profitability.