A great deal of information can, and is, obtained about businesses, by businesses, in order to plan strategies for competing or cooperating. Credit reports and finances are obvious places to start, but few employers are aware that vital pieces of business information are available through workers’ comp data mining.
A workers’ comp insurance term called the “x-mod” (experience modifier) is publically available for every business in New York with a premium greater than $5,000. The data can be obtained by subscribing to services which lawfully collect the data.
The x-mod is the ratio of comp costs, per hundred dollars of payroll, of a business measured against other businesses with the same industry classification. If the x-mod is less than 1 the business is doing better than competing businesses in reducing comp costs; if greater than 1 it is performing below average. Ranges of the number can go from .15 for exceptionally safe workplaces with outstanding management to higher than 7. The number is an accurate measure of the life expectancy of a business.
At a certain point a business becomes unable to compete against like businesses with lower x-mods. This is due to the fact that when comp costs are out of control management of the company has been out of control for several years. The x-mod measures more than payments to a carrier; it measures safety, morale and management skills.
Low employee morale is especially deadly for an x-mod. Trivial injuries lead to significant lost time when workers are angry. (workersxzcompxzkit)
Employers should be aware that data-mining is an essential activity for competitive businesses and there is available data about work comp.
Author: Attorney Theodore Ronca is a practicing lawyer from Aquebogue, NY. He is a frequent writer and speaker, and has represented employers in the areas of workers’ compensation, Social Security disability, employee disability plans, and subrogation for over 30 years. Attorney Ronca can be reached at 631-722-2100.
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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers’ comp issues.
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