Employees: Assets? Liabilities? BOTH!

Employees:  Assets?  Liabilities?  BOTH!


“It Happened So Slowly That We Just Didn’t Realize It”


Davis Kelly is a second-generation masonry contractor who learned the craft from his father.  Over the years, he and his teams have worked as subcontractors to some of the largest general contractors in town and have completed countless projects across a wide variety of industries.  To say that Davis was living the American dream was pretty accurate.  He was fortunate enough to make a good living doing what he loves.

In the past, he had reliable crews and many of the tradesmen had been with him for at least a few years.  Lately, though, it seems that there have been a lot of new faces around the jobsites either due to injuries or workers simply moving on.  Still, Davis looked forward to going to work every day – that is until his workers comp renewal notice arrived!

‘Unaffordable’ and ‘Vital’ Are Like Oil and Water — They Just Don’t Mix!

It’s never fun to receive bills in the mail but when Davis saw that his workers comp insurance was going up by 40% for the coming year, he was alarmed to say the least! Davis knew that members of his crews had minor incidents here and there – things like back strains and cuts – but since his jobs never fell behind, he brushed them off as normal incidents of the trade.

Davis contacted his workers comp provider to get details.  Because his employees logged seven workers comp claims over the past year, their scoring went from 1.0 up to 1.5 (which, cost-wise, was a BIG deal!).  It turns out that the insurer was invested in Davis’s business only enough to process the claims and pay the bills that came in without helping to manage or mitigate claims – and they definitely didn’t provide any type of education to prevent claims from happening in the first place.  Since each claims handler juggles several hundred claims at any given time, it wasn’t surprising that they couldn’t do more but Davis sure wished he had realized that sooner.  In a nutshell, his work comp carrier was an insurance provider but not an insurance partner.

Losing Money & Losing Sleep!

Davis painfully wrote a check for the 40% higher insurance premiums because he had to keep his company operating.  What became his new #1 priority was to find a true partner who could help to un-do some of the damage that had already been done.  To add insult to injury, Davis learned that because of the elevated rating from his workers comp carrier, his company was no longer eligible to put their name in the hat with many of the large G/Cs that they had worked with in the past.  Now, not only was he paying extremely high insurance premiums but the money that used to come in the door was now trickling away because they couldn’t win jobs.  Davis was losing money and he was losing sleep – lots of both!

Solutions Found Through Allies

Thomas, a friend, recommended a company called BBSI to Davis.  “My wife’s company works with BBSI and they are like Johnny-on-the-Spot in helping her with insurance things,” said Thomas.  “Then, when my company needed a partner to help us with some of the HR issues we were having, BBSI also had expertise in that area so we went with them and it has completely changed the way we manage our people and our business.  You should give them a call, Davis.  Maybe they can help you with this insurance mess.”

Davis scheduled time with BBSI.  He explained his company’s current situation and how they had gradually dug themselves into a hole because no one was actually monitoring claims, reaching out to them with periodic reports, or instituting any preventative measures on the front end.  BBSI explained that they would assign a Risk Manager who would work directly with Davis’s Risk Manager and their front line employees to strengthen the company’s risk management protocols.  BBSI also explained that their HR Manager would work with Davis’s team to strengthen their HR programs and compliance which would synergize different parts of the company so that everyone was singing from the same song sheet and working together toward the same – profitable – goals.

Comes The Dawn

Davis signed up with BBSI and their new-and-improved plan immediately began to take shape.  Davis’s company saw more efficient payroll procedures, stronger HR protocols, and increased risk management which meant that workers comp claims were dropping!  Suddenly, Davis found that he was able to invest a lot more time working with his team and building the company than spending so much time and energy holed up in his office worrying how the company was going to rebound.

Several months passed and Davis was beginning to see real light at the end of the tunnel.  Because of the programs that Davis instituted with BBSI, his company actually saved $40,000 over the course of the first year in top-line costs alone.

Goal-Setting, Teamwork & Keeping Everyone’s Eyes On The Ball

The company as a whole set a goal of reducing workers comp claims for the coming year.  Days ticked by without any incidents…then weeks…and eventually months went by without any new claims being filed.  Not only were Operations and H.R. taking notice — the insurance company was also taking notice!  By the second year’s renewal time, the company’s insurance premium had dropped by 25%.  When their rating finally dropped below the magical 1.0, Davis’s company was again able to go after contracts that they were previously excluded from.

With company revenues on the rise and increased profits, Davis was able to reflect on the changes they had made.  One of the biggest wins for the company was that Davis and his employees were now paying more attention to safety.  The training that hiring managers received about how to hire and terminate employees – and how to hire better in the first place – has increased retention and cut the company’s onboarding costs significantly.  The icing on the cake is that the newly-instituted HR protocols helped to create a team environment and strengthen the company culture vs. the divisive us-vs-them mentality that had started to rear its ugly head.

By spending more time with clients and vendors, Davis was able to strengthen those relationships.  Three years into their retooling efforts, Davis’s company has increased revenues by 43%.  As he turns the lights off in his office on a Friday afternoon and heads toward the weekend, Davis realizes that the American dream is once again alive and well and living within his masonry company.



This article was contributed to the National Franchise Institute by Knight Hinman with BBSI  (303) 929-9946.