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Experience Modification Rate: Best Practices for Achieving a Lower Score and Safer Operations

Most professionals in the construction industry appreciate the importance of risk management. Prioritizing safety in construction operations is not only paramount to securing new business and recruiting talent, it’s also an essential component of profitability.

While the safety-related anecdotes shared on construction sites and in new employee orientations are important, there is only one measure of safety that underscores a company’s commitment to its employees and its clients – the Experience Modification Rate (EMR).

EMR scores impact every part of a contractor’s operations and, because they are an indicator of past performance, they have become the greatest predictor of future behavior – both on and off the worksite.

For that reason, consumers of construction services demand increasingly lower EMR scores. Manageable insurance premiums depend on them. Even talent is attracted by a company’s EMR because positive scores provide a competitive advantage.

Lowering and maintaining a quality EMR score is easier said than done. But with a dedicated team willing to challenge assumptions and look at risk management and safety operations holistically, it can be done.

What follows is a collection of challenges and best practices that will help contractors lower their EMR scores, maintain those positive ratings and save their companies money.

Challenge: Turning executives into safety champions

The importance of the executives’ role in lowering a company’s EMR score cannot be understated.

Often, executives make excuses for high EMRs, citing external factors beyond their control or downplaying the significance of the scores in general. They may espouse the value of safety in principle without ever reinforcing that value through action.

Conversely, many executives do buy into the importance of risk management but find it difficult to demonstrate their commitment in meaningful ways.

Here’s how executives can become champions for safety and set the stage for lower EMR scores:

Best practices for turning executives into safety champions

1. Select the right leaders. The people chosen to lead risk management efforts should be firm but fair, individuals with a passion for safety. These folks should have a proven track record of success serving as an inspiration to their teams and not be afraid to get their hands dirty. They will be risk management advocates in all ways.

2. Talk about risk management holistically. Every facet of a project needs to be addressed for a true global risk management culture to exist. Executives can influence this by extending discussions of risk management beyond the construction site. Risk is inherent in everything that happens in construction operations, from the way a firm markets itself to the subcontractors it partners with and the warranty it delivers at the end of a project. Assessing the risk associated with every task, purchase order, estimate or piece of equipment used will reinforce the idea that risk management is a company-wide function.

3. Make periodic site visits. As a practice, executive leadership should strive to make routine risk management visits to their project sites with a singular objective: reinforce the importance of safety on the worksite. Executives should avoid becoming enforcers; rather, they should demonstrate their commitment to managing risk and prioritizing safety by discussing safety challenges, asking for input and ideas, celebrating successes and challenging the team to do better each and every day.

Challenge: Getting employee buy-in

Once the executives have become champions for risk management, the next step is getting team members to buy in.

Because construction is such a highly specialized industry with a clear division of labor, it’s easy for employees to focus exclusively on their own tasks: accounting, engineering, estimating, crane operations and risk management, to name a few.

The challenge is to instill among all employees a sense of ownership over risk management activities, regardless of the department or the job function. Essentially, all team members must become risk managers.

The groundwork for this can be laid during the onboarding process, but must extend indefinitely through training and mentorship, which are critically important for an organization that wants to lower its EMR score.

Best practices for getting employee buy-in

1. Train employees to do more than identify risks. It’s not enough to tell employees they are all risk managers; you have to show them how to be risk managers. This means going beyond teaching employees how to perform safety audits and properly report safety concerns. It involves training employees to understand how risk emerges and where safety hazards are most likely to occur; to look at the potential outcomes associated with every decision they make; to talk about the “what ifs” and the “what could-have-beens.” And it requires ongoing encouragement and reinforcement of positive behaviors by leadership. Only through a comprehensive approach to training will team members fully understand, accept and thrive in their roles as risk managers.

2. Institute a mentorship program. The benefits of mentorship for the construction industry are twofold. First, by virtue of their designation as mentors, high-performing employees may feel a sense of accomplishment and increased self-confidence, leading to greater ownership over their work. For the mentees, they have a trusted source to go to with questions or for clarification, which may reduce instances of error or the need for management intervention (saving time, money and helping to create a safer organization).

3. Seek input from the front lines. Risk management executives can’t be everywhere at once, so empowering their teams is key to mitigating risk. One way to achieve this is to make sure project teams know their input is valued. Start by requesting that project managers pull in lower ranking employees for weekly safety audits, asking them to identify opportunities for improvement. Consider setting aside time every day for open discussion, where crew members can share their ideas and suggestions with on-site leadership. Managers should continually solicit feedback from their front-line team members, whose day-to-day experiences make their input invaluable.

Challenge: Creating a safety-first culture

When executives become risk management champions and employees are on board, only then can safety become a part of the culture.

Shifting an organization’s culture is not without its challenges, and it doesn’t happen overnight. In fact, it’s not something that leadership can even “do.”

A safety-first culture is the result of a formidable dedication of all team members to ensure their every action and behavior demonstrates the company’s dedication to safety. In the end, it’s the single greatest predictor of a low EMR score as it emphasizes a company’s long-term commitment to the values, practices and behaviors that minimize risk.

Best practices for creating a safety-first construction culture

1. Safety first, production second. A key indicator of a low EMR score is a company’s willingness to practice what it preaches; management must consistently prioritize safety over project timelines. Demand that project teams stop working if they suspect a safety issue; require employees to seek help until corrective action is taken, regardless of lost time or productivity; and celebrate a project stalled because of a safety threat, whether or not the threat was real. These behaviors will build confidence in employees and set the stage for them to speak up in the future.

2. Perfection is impossible (but it’s still the goal). When all eyes are on the safety and risk management function, it can be tempting for employees to want to deliver better news than what actually exists. Eliminate this by requiring that no risk management reports come back 100 percent clean – there is always room for improvement. Avoid disciplining teams for identifying risks; instead, request that they return audits with clear action plans that address and correct issues.

3. Celebrate the wins. Celebrating a team’s successes – big and small – is essential to maintaining low EMR scores. Risk management executives can make a lasting impact on their teams by doing their part to make safety fun. Carry gift cards to construction sites and hand them out to employees who make safety a priority. Praise the good work of team members by sharing their accomplishments at all-team meetings and in company newsletters. Even a simple “thank you” with a handshake can motivate and inspire employees to do better tomorrow than they did today.

The risk management function in the construction industry is always evolving. As general contractors take on bigger and more extensive projects, they must constantly look for ways to protect their people, their projects and their clients.

EMRs continue to be a solid indicator of the health and vitality of a construction company. And as clients demand better scores, the industry has to be able to deliver better scores.
These best practices are a guide to ensure safety and risk management become (and remain) a priority. Following them will help general contractors lower their EMR scores, avoid complacency and instill in their clients the confidence in their firms’ ability to deliver the best product in the safest manner. Every time.

About The Author

Jerry Flemming is the vice president of risk management for James McHugh Construction Co. in Chicago, a Builders Association member. Flemming has more than 25 years’ experience in safety and risk management. Since joining McHugh in 2011, Flemming has guided the company to achieve its lowest Experience Modification Rate – a 0.46 – while overseeing some of McHugh’s most complex and expansive projects to date. He continually challenges safety assumptions and is always looking for ways to improve and advance the risk management function.