Cutting Injuries, Cutting Costs

THE INJURIES WERE FRIGHTENING in both their severity and their frequency. Framing crews were the most common source of accidents. One framer fell from a scaffold, breaking his wrist and tearing the rotator cuff in his shoulder. Another tore ligaments in his knee when he leaned against a safety rail that gave way. Still another fell off a wall, breaking his elbow and tearing his tricep muscle. An excavation crew member broke his leg when he was caught in a trench cave-in.

For Village Homes of Colorado, the reports coming in from its jobsites were sobering. At year's end in 2002, its workers' compensation loss ratio was 79.5 percent.

“It stunned us,” says Robert Fast, senior safety manager for the Englewood, Colo.–based builder.

The only way Village Homes even knew about the extent and the severity of the injuries on its jobsites was the fact that it had self-insured with a rolling owner-controlled insurance program, or ROCIP. While many ROCIPs provide liability insurance for all the trade contractors on the site, Village Homes' policy also covers workers' compensation. Since it got all the bills for the claims, it got all the data on the injuries.

“Most builders wouldn't know what kind of losses their trade contractors have in the field,” Fast notes.

The onslaught of accidents would stop there, but it wouldn't be easy. Everyone working in the field—from superintendents down to laborers—would receive 10 hours of OSHA training. Every worker on a site needed to carry a ROCIP registration card at all times. There would be monthly scheduled and unscheduled audits; 15 percent of a superintendent's bonus would be based on audit scores. Trade contractors would be fined for violations—and rewarded for following safety requirements. At least one person from each trade contractor on a job would be required to attend—and sign in at—monthly safety talks. Even home buyers would go through safety training before they visited the jobsite. None of this was optional.

KEEPING TRACK: Village Homes senior safety manager Robert Fast knows “to the penny” how much an injury costs the company. The builder uses a designated medical clinic for all jobsite injuries, which helps pinpoint which trades and activities are prone to accidents.

“I thought it was safety run amok,” says James Dome, then a construction superintendent and now the company's field safety manager.

But it paid off. By the end of 2003, the loss ratio had dropped to 59.5 percent. For the 2004 policy year, the ratio plummeted to 25 percent, and the injuries that did occur were generally less serious. With the self-insured builders paying out less money for claims, a portion of the premium could be returned to the trade contractors and the premium could be lowered. Plus, with cleaner sites and fewer workers injured on the job, houses were built more quickly and with fewer mistakes.

The thing that impressed Dome the most when the program started was that the commitment came from the very top of the company. Then–president and CEO Donn Eley said that he was determined that every associate of the company would go home to his or her family every day healthy and uninjured.

“It wasn't just the safety personnel explaining it,” Dome says. “It was Donn Eley explaining what our exposures were and what our commitments were. We were signed into a three-year deal [with an insurance agency that administers the program], and we would make it work.”

Safety experts are unanimous in saying that the success of any safety program depends on that kind of management involvement. Employees tend to ignore bosses who put up safety posters but don't provide the training or the equipment to create a safe work environment.

“I think it comes down to them setting expectations and setting the culture,” says Don Laws, construction services supervisor for Village Homes. “You can't ignore it. Everyone has to be a part of it.”

Pardee Homes has spent most of the last decade working on building a culture that places a high value on safety. To get buy-in from its employees, it opted to focus on the personal impact of injuries.

“I have never had anyone argue with me successfully when I talk about going home to their family safely,” says Pardee's senior safety director, David Holt. “By working on the top rung of a ladder and not going home safely to your family and taking home that paycheck—even the toughest guy responds to that.”

It's worked. In 2003, Pardee Homes was honored by the states of California and Nevada for its safety records. In both instances, it was the first time a home builder had been recognized.

Village Homes has gotten buy-in from trade contractors by recognizing individuals, crews, and companies that follow good safety practices. During inspections, Laws, Fast, and Dome look for safety-conscious crews Funding for the rewards comes from fines that Village Homes' safety inspectors collect from trade contractors for safety violations.

Trade contractors also are recognized for safety and jobsite cleanliness during toolbox talks (a short training session, usually covering a tool in their toolboxes), at quarterly vendor meetings, and at an annual awards banquet.

“They do appreciate the gift, but it's more the recognition,” Dome says.

Like Village Homes, Pardee has detailed expectations from and support for its trade contractors. Before receiving their bid packages, trade contractors get a set of safety standards that becomes part of the contract. Safety violations are documented and sent to the trade contractor's principals, who have 15 days to respond with an action plan. Failure to respond results in suspension and elimination from bidding on future projects.

On the jobsite, superintendents drive Pardee's safety program with pre-job safety meetings at the beginning of each phase, and weekly toolbox talks with the crew chiefs. One of the concepts they reinforce is the “courage to intervene,” Holt says. Anyone on a jobsite can—and should—report a safety issue without fear that a superintendent will be angry about a work slowdown.

The safety managers also look at a trade contractor's leading safety indicators, such as availability and frequency of training for its employees. Those indicators are color-coded red, yellow, and green “so people can identify where they're doing well and where they need to be improving,” says Charlie Nichols, safety manager for Pardee's Las Vegas division.

Under their contracts, trade contractors are required to have a safety meeting every 10 days; Pardee offers them sample programs and videos, including ones that explain the hidden costs of an injury and what it would take to recoup the lost profit.

Village Homes has gotten some attention as well from its regional OSHA office. The Region 8 office had created the HomeSafe training program to focus on the 10 most common reasons for construction accidents; included in the program was a Master Builder designation. Village Homes was the state's first builder to receive the designation.

Requirements for Master Builder status include an on-site health and safety program, internal audits, extensive training, assumption of responsibility for trade contractors on their site, a lower number of days away from work than the national average, and passing an unannounced verification inspection.

Benefits include an exemption from scheduled inspections for the next 12 months, says Greg Baxter, OSHA Region 8 administrator. But the real benefit is the relationship established with OSHA.

“We can work together on issues and talk,” Baxter says. “The relationship is good for both of us.”

Fast agrees. He calls on OSHA staff to help with its training, and Village Homes has helped OSHA put on safety programs for local builders.

“The relationship changed from being perceived as adversarial,” Fast says. “We're now partnering together. It's much better to have OSHA in your classroom than being in OSHA's office for a conference.”

Home Builder Institute superintendent certification stresses jobsite safety.

Paul Mashburn is passionate about jobsite safety, and he's worried that the average builder still doesn't take it seriously.

“People say, ‘I'm only building 10 houses a year; it doesn't apply to me,' ” says Mashburn, a former chairman of the NAHB's Home Builder Institute who helped establish the Residential Construction Superintendent certification program. “It applies to everyone. … It's a serious matter, I think it's nationwide, and I hope there's something we can put together that will bring attention to the need to have some kind of formal safety training on the jobsite.”

Mashburn says he's stunned by how few superintendents know even the basics of a safety program or understand its importance to business. The NAHB reports that the average builder with a safety program has 36 percent fewer accidents and can save between $4 and $6 for every dollar invested.

“When I start [teaching a safety training session], I ask if everyone has a hard copy of their safety program and if it's posted,” Mashburn says. “Their damn eyes start glassing over five minutes into a four-hour session. Then I ask, ‘Have you read it? Are you qualified to be the [OSHA] competent person?' And it goes downhill from there. There's a complete lack of concern for getting the superintendent involved [with safety]. … You can have company management say they're safety conscious, but if it's not on the jobsite, it's useless.”

A simple place to start, Mashburn says, is to include safety training in the pre-work conference. The first time a plumber, roofer, framer, or electrician comes to the site, set expectations for safety and clean up. Fines are a powerful tool to get a trade contractor's attention.

Mashburn gives his students a model safety program that includes a sample contract for trade contractors and a procedure for handling an OSHA inspection.

“You can't do it overnight, but you're making an effort for improvement,” he says. “You have to start someplace.”