The Benefits of a Modified Duty Off-Site Return-to-Work Program

According to the US Bureau of Labor Statistics, there were 2.8 million nonfatal workplace injuries reported in 2018. With employers in a number of industries unable to provide light- or modified-duty accommodations, injured workers are forced to spend days, weeks, or even months at home recuperating. This extended time away from the job can have extremely detrimental effects on both the employee, through financial and emotional distress, and the employer, through increased claim costs and workers’ compensation premiums.

By implementing an effective return-to-work (RTW) program, employers can take proactive steps to aid their injured workers in returning to the job more quickly, while simultaneously reducing the impact that injuries have on their bottom line.

What is an MDOS return-to-work program?

The goal of a RTW program is to make accommodations for injured employees to return to work before they’re fully recovered, usually in light- or modified-duty roles, at full- or part-time hours, and at full or partial wages. In some industries, return-to-work programs are often overlooked because employers are unable to provide on-site, alternative working arrangements for these employees.

Modified Duty Off-Site (MDOS) programs are unique in that they allow companies to partner with outside organizations, usually nonprofits, to place injured workers in roles that can accommodate their medical restrictions until they’re cleared to return to full-duty at their normal place of employment.

How does an MDOS program benefit employers?

RTW programs, such as Sheakley’s Modified Duty Off-Site solution, provide a much-needed mechanism for employers to support their injured employees on the road to recovery, while also reducing their claim costs and controlling premium increases. Let’s take a more in-depth look at some of the benefits a RTW program can offer to businesses.

Reduce Direct Costs

Workplace injuries have a major impact on an employer’s bottom line. The National Safety Council estimates an average cost of $39,000 per medically-consulted injury, which includes wage and productivity losses, medical expenses, and administrative overhead. In accident-prone industries like construction and service, workers’ comp claims can quickly balloon out of control. An effective RTW program can significantly decrease these costs, especially the indemnity and medical portions, and provide stability for future premiums.
In workers’ compensation, indemnity is the payment made to an employee to compensate them for lost wages resulting from a workplace injury or illness, and can account for 30-50% of the total claim cost. A RTW program can reduce the impact of these lost-time claims by returning injured employees to work as soon as they’re medically cleared, in a light- or modified-duty capacity. In some cases, if there is timely communication between all interested parties, claims can remain medical-only and indemnity is avoided altogether.
The medical costs of a claim can also be drastically reduced through use of a RTW program. A study by Crawford & Co. showed that injured employees who returned to work in a limited capacity recovered three times faster than those who were not offered or declined RTW options. When recovery is expedited, the medical costs associated with the claim are decreased.
Employers utilizing RTW programs can also exercise greater control over the impact that claims have on their experience modification rate (EMR) and thus their future premiums. The EMR is applied to a company’s base workers’ compensation premium rate and is calculated by looking at both past claims data as well as future potential for risk. By reducing overall claims costs, RTW programs can lower the EMR and lessen the resulting premium increases.
Reduce Indirect Costs

While the direct costs of workplace injuries are substantial and easier to quantify, the indirect costs can be significant and can reverberate throughout the company.

When an employee is injured on the job, either coworkers or temporary workers must step in to fill the gaps in productivity created by the loss of the injured worker. If current employees are asked to fill in, oftentimes they must work extra hours to ensure their own responsibilities are fulfilled, along with those of the injured worker. This additional time means the employer is forced to pay overtime, which can be costly in cases of prolonged absence. If current staff are unable to shoulder the burden, the employer must devote time, effort, and capital to finding and training a temporary employee.

In worst case scenarios where the injured worker is out for an extended period or doesn’t return, the employer must allocate considerable resources to finding a replacement. According to a study conducted by the Center for American Progress, it can cost an average of thirty percent of the injured worker’s salary to replace them. The same study also indicates that it can take approximately thirteen months before a new employee is as productive as the lost employee.

By providing the tools and support necessary to ensure injured workers return to their positions as soon as possible, RTW programs can drastically reduce the burden on current employees and can eliminate the need to hire and train a temporary or permanent replacement.
Boost Loyalty & Trust

Employers often suffer the brunt of the negativity that comes with workplace accidents or injuries. They’re seen as the “bad guy” looking to reduce claim costs, even if it means short-changing their injured employee.

By implementing an effective RTW program and staying engaged with employees during the recovery process, a company shows their injured workers, and their whole staff, that they are a vital part of the organization and they’re committed to their wellbeing. When employees know that there is a comprehensive policy in place that ensures they’re cared for should an accident occur, they often feel a stronger sense of commitment and loyalty to their company.

How does an MDOS program benefit injured workers?

There is a common misconception that employees who are injured are malingering, or exaggerating their conditions so they don’t have to work. However, studies have shown that the majority of injured workers would rather return to gainful employment as soon as possible. Let’s take a look at some of the benefits RTW programs provide to employees injured on the job.

Maintain Earning Capacity

Typically, workers’ compensation indemnity payments only cover two-thirds of normal wages. A recent study by CareerBuilder indicates that approximately 78% of workers in the US are living paycheck to paycheck, so workplace injuries can have catastrophic financial effects on employees.

By returning an injured worker to employment as soon as possible in a light- or modified-duty role, RTW programs provide employees with the ability to earn their full wages, either directly from their employer or from a combination of their employer and workers’ compensation. Early intervention and proactive communication can ensure that the financial impact of a workplace injury on the employee is minimized.
Speed Up the Recovery Process

There is broad consensus among medical professionals that returning injured employees to work has a positive effect on the recovery process. A 2010 study conducted by the Rand Corporation showed that employees participating in a RTW program returned to full duties an average of 3-4 weeks faster than those who did not.

RTW staff can collaborate with treating physicians to identify placements that meet the employee’s medical restrictions and focus on their abilities rather than their disabilities. Work essentially becomes a part of their treatment and rehabilitation and allows the employee to take an active role in ensuring a positive outcome.
Improve Morale

It is a common misconception that being away from work reduces the stress on an injured employee and allows them to heal. Prolonged absences can actually have the opposite effect. While out of work, employees lose the social relationships they had with their coworkers, the self-worth that comes from being a contributing member of society, and a major component of their personal identity – what they do for a living. These factors can lead to what’s commonly referred to as the “disability mindset”, where the injured worker begins to feel like they’ll never be able to recover and return to their pre-injury life.

RTW programs provide employees with the opportunity to recover the social connections and self-worth that come from meaningful employment. Many also take pride in the fact that they’re contributing to the betterment of the community through their non-profit assignment. In fact, most injured workers maintain contact with the non-profit organization even after their temporary placement has ended and they’ve returned to their regular jobs.

MDOS Return-to-Work: The Path to Savings

With an estimated total cost of over $161 billion per year, nonfatal workplace injuries continue to factor heavily into workers’ compensation expenditures. It’s imperative that businesses seek ways to curtail the impact these costs have on their bottom line.

With the many proven benefits for both employers and injured workers, RTW programs are one of the most effective ways of getting employees back on the job and reducing overall workers’ compensation costs. In fact, a study published in the Journal of Occupational & Environmental Medicine found that return-to-work programs reduced total workers’ compensation expenses by an average of fifty-four percent.

Sheakley’s Modified Duty Off-Site program provides these critical cost-saving opportunities to businesses across the country. By leveraging its national network of non-profit partners and virtual program options, Sheakley can place injured workers in temporary light- or modified-duty positions that conform to any medical restrictions, adhere to all COVID-related guidelines, and are convenient for their location,. With a short average placement time and a high rate of success, Sheakley’s MDOS program sets the bar for a commitment to excellence and results.

Learn more about Sheakley’s Modified Duty Off-Site return-to-work program and contact us for your free consultation today.