This week, we’re joining contractors across the country in acknowledging Safety Week from May 2 – 6, 2022. Safety is a topic within the industry that has grown in recent years to be a top priority for all reputable contractors, with an emphasis on ensuring that the workplace for construction crew members be physically and emotionally safe. These efforts will undoubtedly make for a stronger workplace with long term, healthy employees that can work in their respective trades for many years.
Most contractors have some form of a safety program in place to provide training, enforcement and record keeping. Measuring the success of those programs to evaluate how safely a company operates isn’t as simple as it might seem, but there are efforts to standardize certain measurements to compare companies to each other as well as gauge performance and improvement over time.
Safety Units of Measurement
Today, we will spend some time reviewing what units of measurement exist and how they are used to gauge the safety record of a given company. These measurements include:
- Experience Modification Rate – EMR
- Days Away, Restricted, or Transferred – DART
- Total Recordable Incident Rate – TRIR
In addition to these more formal measurements, individual companies will track several other benchmarks and measurables to watch for trends in their safety program, including:
- Total number of employees
- Total employee work areas
- Total number of deaths
- Total number of lost workday cases
- Total recordable injury/illness cases
- OSHA citations
Lagging vs. Leading Indicators
The above listed measurement tools are all lagging indicators; as in, they’re based on past incidents as opposed to predicting future performance through leading indicators. Leading indicators might include measurables such as:
- Worker attendance rates at safety meetings.
- Response time by management to potential safety incidents.
- Frequency of safety audits performed on jobsites.
Evaluating the leading indicators for a safety program is an important tool in creating a positive, safe culture for construction work. However, these measurables aren’t as standardized as the lagging indicators that we will be reviewing today. We will focus primarily on the EMR, DART and TRIR measurements, how they’re calculated and what that means for contractors and clients.
Experience Modification Rate
The EMR, also referred to as a ‘mod’ rate, for a given company is a three-year lagging indicator based on workers’ compensation claims paid on behalf of the contractor. Created by the National Council on Compensation Insurance (NCCI), the EMR rating helps insurance companies determine the cost of the premium to insure the company.
To calculate the EMR rate, payroll and loss data is evaluated over time. Calculating the EMR is a bit complicated. It considers multiple factors to review both the frequency and severity of lost time due to injuries occurring on the job. Companies with numerous claims or very expensive claims will both factor into a raised rate, but more weight is given to high frequencies of injuries than the expense of only one.
For a detailed explanation of the factors and formula for calculating the EMR, visit this article published by the NCCI.
One critical piece to remember about the EMR is that it is a lagging indicator. If a contractor is subject to a large claim in one year, it will negatively affect their EMR rating for three years following. Said contractor may have demonstrated significant improvements to their safety program, or had few to no claims, and still be ‘penalized’ for past claims.
The average EMR rating for construction is 1.0, with companies that perform better than average scoring below, and those who score worse above 1.0.
Days Away, Restricted or Transferred
The DART rating, or ‘Days Away, Restricted or Transferred’ is a measurement developed by the Occupational Safety and Health Administration (OSHA) that measures three factors:
The number of days employees are absent because of a work-related injury or illness.
The number of days an employee must perform a modified work assignment due to work related illness or injury.
The number of days an employee is transferred to another job because they cannot complete their normal duties due to a work-related injury or illness.
The DART rate is based, in theory, on relatively severe incidents since it is based on lost or modified workdays. As of 2018, the average DART rate for the construction industry was 1.8.
It’s in a company’s best interest to reduce all of these types of incidents, as they all reflect on productivity and therefore, profitability. Additionally, regulatory bodies such as local building departments or the local health and safety administration may increase the number of random inspections that occur on sites run by contractors with higher DART ratings. A higher DART rating, in essence, equates to a riskier company in terms of worker safety.
The DART rating is based on the following formula:
An example of a DART calculation if a company works 250,000 annual hours, with 4 restricted duty days and 2 transfer days:
DART RATE = (4 + 2) x 200,000 / 400,000 = 3
Total Recordable Incident Rate
The TRIR, or Total Recordable Incident Rate, is based on all OSHA-recordable incidents in a company, including those that do not require lost or modified workdays. The TRIR rate will typically be higher than the DART rate, since that rate is only based on more severe incidents that do result in missed workdays or modified duty. The formula for TRIR is as follows:
If we follow our above example, let’s say the same company has 4 incidents in addition to the restructure or transfer days, for a total of 10 incidents:
TRIR = 10 X 200,000 / 400,000 = 5
A good rule of thumb for TRIR is to have a number less than 3.0, as the average is 3.1.
How to Lower EMR, DART and TRIR Rates
While all three of the rates we’ve discussed today are lagging indicators based on past incidents, they do affect insurance rates and sometimes the ability to work for certain clients. They may also be used as a means of comparing contractors to each other in a proposal or bid scenario. Those with higher safety scores may be easy targets to remove from competition.
The key to lowering all of these rates is to reduce the number of injuries that occur onsite. Action items include implementing a full-scale safety plan, enforcing OSHA rules and regulations, hiring safety managers and/or coordinators to provide in-house audits and education, and changing the culture of site crew members to embrace safe work practices.
Lowering these safety ratings to below average at a minimum brings many benefits, including, but not limited to:
- Workers are genuinely safer and healthier when on the jobsite.
- Insurance rates are reduced.
- Eligibility to work for large corporate clients or otherwise safety-conscious clients increases.
- The frequency of inspections by OSHA or other governing bodies are reduced.
The effort and cost to create a safe work culture can pay back tenfold for both a company and their workforce.
As we walk through safety week 2022, we want to think about the large and small consequences of jobsite safety. If you want more resources on safety in the industry, we encourage you to check out some of our past articles on the topic below.