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     In dealing with the subject of on-the job injuries and workers compensation costs, some retailers and other employers may be focusing on the obvious direct costs of an injury claim, while overlooking the potentially much larger indirect costs, experts warn.
      The widespread belief that workers comp insurance covers the full cost of an injury claim can be an expensive misconception, the experts add.
      "Employers often try to downplay the costs of accidents by saying that they are covered
by insurance," says Mary Murray, president of Work Smart, a San Francisco-based company specializing in workers compensation cost analysis. "Their attitude is often: My claims don't cost me anything. Isn't that why I have workers comp?"      Unfortunately, this attitude keeps from sight the exorbitant costs that injuries take from, an employer's profits. "Most larger self-insured retail companies intrinsically understand the real, profit-draining costs of workplace injuries," says Bruce Van Kleeck, NRF vice president-member services. "Smaller companies often do not understand the extent to which injury claims can affect their bottom line, most of which can be avoided."
      As Van Kleeck indicates, major retailers such as Eddie Bauer and Wards have taken a pro-active approach to workplace injuries, with vigorous programs aimed at fostering safety consciousness throughout their nationwide chains.
INDIRECT COSTS Workplace accidents have obvious, "direct" financial ramifications, including medical, hospital and rehabilitation expenses, higher insurance premiums and, in some cases, a total loss of insurability. But the many less obvious, indirect costs, which are usually uninsured, can seriously affect an employer's bottom line. They include:
    · Time lost from work by the       injured employee;
    · Damage to company morale;     · Cost of breaking in new       employees;
    · Loss of production; and
    · Possible damage to       equipment.
     According to insurance loss control experts, the indirect costs of workplace injuries can range from two to 17 times the cost of the face value of the claim.
      One of the first things Murray addresses when working with experienced and rated clients is the impact of claims especially frequent small claims - on the insurance rating of the company. For example, a $29,000 carpal runnel claim can actually cost an employer $37,400 in premiums over three years, and adding in indirect costs can push the total to $71,450. A back injury due to heavy lifting, which costs $65,000, can generate $58,645 in additional premiums and jump to $131,380 when indirect costs are factored in.
      "What is lacking is a full consideration of the complete costs of work-related injuries on employers' insurance premiums," says Murray. "Each claim drives up employer costs through increases in workers comp premiums, which are hard to track because they are buried in the complicated maze of the insurance rating system. Combine this with the indirect costs of a claim and were talking big money.
     " To stamp out excessive injury claims, it is important to take a pro-active attitude toward workplace injuries that involves employers, employees and insurance carriers. Eliminating unnecessary claims costs can be surprisingly easy if employers have the cooperation of all people involved.
      "It all starts with safety and training," says Dave Hiatt, divisional vice president corporate affairs for Redmond, Wash.based Eddie Bauer, which has approximately 15,000 employees.
"Because the retail sector has high turnover, we focus on providing strong and consistent safety messages to new hires. The minute they walk in the door,

new employees know our expectations with regard to safety."
      Eddie Bauer has new employees view a safety video,
the contents of which are incorporated into written materials. This is augmented throughout the year with different safety awareness programs.
      "Before developing a safety program we look at the most critical parts of the workplace through job safety analysis assessments, where we break down tasks performed in the various functional positions in our stores," says Matt. "We focus on high-risk tasks - lifting or carrying cartons from the backroom out to the selling floor, the proper use of ladders in stock areas, and using box cutters and knives safely to avoid injury."
INJURY PREVENTION      Chicago-based Wards, meanwhile, decided to implement a company-wide injury prevention program seven years ago, at a time when it faced spiraling workplace injury costs. "We saw that our total safety losses were exceeding our shrink losses," says Dave Myers, vice president-asset protection. "This prompted us to create a safety program to remedy the situation. We have since driven our workers comp costs down dramatically, and we have become very aggressive about promoting workplace injury prevention."  Safety is now part of Wards' culture, which rejects the attitude that injuries are unavoidable. "We put out the message that accidents can be prevented, and they are not an acceptable part of doing business," says Chris Garrabrant, national safety manager for the chain. "No work is so important that anyone should consider doing it in an unsafe manner. We put that message out to associates from their very first day forward, and we support them continually to live up to it."      Garrabrant bases Ward's safety program on three elements: standards, training and accountability. "Standards are our prescribed methods in which people conduct their behavior, including behaviorial-based safety programs," says Garrabrant. 'We also encourage safety committee that get the message down to a grassroots level to our associates.      "Training is applied every month, and we put safety messages out in cornpany-wide correspondence. It could be fire safety or lifting techniques, but we make sure safety stays at the forefront to everyone.
      "FinaIly, accountability is
built into the systems in a way that makes managers self-interested advocates for injury prevention at their locations," Garrabrant continues. We make people responsible through a management safety accountability audit form which there are disciplinary consequences for repeated failure to comply with
our safety measures. Our managers also know that injuries directly affect their profits at the end of the quarter; which is a good incentive to be part of the program.
      " Both companies maintain that employers have to be consistent with regard to safety to nuke injury prevention part of the company culture.
      "It doesn't have to be that difficult" says Hiatt. "Once you put your injury prevention and management systems in place, they can pretty much run themselves. We have three people for all 15,000 associates keeping on top of our systems and processes. You don't have to spend a whole lot of money doing this if you have the right systems and processes combined with a very service-oriented insurance carrier.
      "Our stores average one claim a year," says Hiatt. "This is good news in that we have a very low incidence of injury. The bad news is that our managers do not have a lot of experience dealing with injuries once they happen."
      Hiatt has since streamlined
procedures to provide managerial guidance in the event of injuries. "We've put a section of our employee manuals that provides
a toll-free number for managers to

call when an injury occurs.
     Managers get walked through the process of gathering information and documenting the particulars
of the injury, which becomes part of our claims file."
      Hiatt stresses that while taking care of employees' medical requirements is the most important thing, getting the injured employee back into the system in some capacity is also vital. "Our objective is to see that the majority of our claims are 'medical only' claims as opposed to lost time claims. We make sure associates get the medical care they need, but we stay in contact with injured employees and their doctors to make sure they can return to full or lot duty as soon
as possible."
      Furthermore, Hiatt instructs managers to maintain contact
with injured ernployees. "We stay in touch with claimants for the first few days after a claim. If claims are more long-term, we call them on a weekly basis. Our goal is to keep injured employees feeling connected to the company. The sooner we get them back to work, even if it is light duty, the more likely they won't get used to sitting at home watching 'Oprah,' which ultimately turns into an expensive claim."
CLAIM HISTORY When developing a claims cost reduction strategy, one of the most important aspects is getting a handle on a workplace and its history of claims. It is important
to to track and allocate all claims to both determine the real cost of a company's injuries and to identify the source of problems, either with the help of an insurance agent or in-house with the help of a software program.
      "We've developed our own internal access database that tracks claims," says Hiatt. "We also receive reports from our insurance carriers and third-party administrators on a monthly basis that summarize all of our open claims and the costs they are incurring. We combine internal tracking systems as well as reporting from carriers to stay on top of our claims costs."
      Wards follows a similar approach. 'We rely heavily on our third-party administrators as claims occur," says Garrabrant. "At that time we capture information about how the claim occurred and what types of information can be gathered to identify potential trends. The biggest part of claims allocation is that it forces management to be accountable - they pay for the costs of claims out of their own budgets and injuries will-negatively impact their numbers.
      Analysts warn that the complexity of workers' compensation rating systems is usually not explained fully to employers by the insurance industry. "Employers should ask insurance agents with help in tracking losses and identifying trends about where and why injuries are happening," says Murray.
      Murray's company, Work Smart (www. smart-comp.com), has recently developed a software program that assists executives in gathering and analyzing the nature of their workers compensation claims. For example, Work Smart helps employers generate an "Anatomy of Bottom Line Cost" chart, which displays the origin and cost of all workplace injury claims, future premium costs and the indirect costs of injuries.     "Excessive injury costs take money away from businesses that could have been used as working capital, for future investments or for shareholder dividends," says Murray. "Although it may require work to uncover the hidden costs of workplace injuries, it is effort well spent." Excessive injury costs take money away from businesses that could have been used as working capital, for future investments or for shareholder dividends. Although it may require work to uncover the hidden costs of workplace injuries, it is effort well spent.