Five Metrics Every Employer Should Track to Master Workers’ Comp

You can’t improve what you don’t measure. That’s as true for workers’ comp as it is for fitness, finance, or sales. Yet many employers still fly blind—unsure where to focus, overwhelmed by options, and frustrated by rising claim costs and stagnant outcomes.

The key to turning this around is a focused, data-driven approach. With just five core metrics, you can quickly diagnose the health of your workers’ compensation program, prioritize where to act, and measure your progress over time.

These metrics aren’t just numbers. They’re levers—and pulling the right one can significantly reduce costs, speed up recovery, and drive better outcomes for your employees.

Let’s dive into the five metrics every employer must track to master their comp program.

1. Cost per Full-Time Equivalent (FTE)

Why it matters:
This is your macro metric—your overall workers’ comp cost normalized by workforce size. It allows you to compare performance over time, regardless of how much your company grows or contracts.

How to calculate it:
Take your total workers’ comp cost (including both medical and indemnity) and divide it by the number of full-time equivalent employees.

What it tells you:
This figure shows whether you’re becoming more or less efficient over time. If your workforce doubles but your cost per FTE stays the same—or goes down—you’re likely managing claims effectively. If the cost per FTE rises, it’s time to investigate deeper.

Think of it as:
The outermost Russian doll—other metrics nest inside it. If you improve the others, this one improves too.

2. Total Recordable Incident Rate (TRIR)

Why it matters:
TRIR, an OSHA metric, tracks how often injuries happen. It’s a leading indicator of workplace safety and risk exposure.

How to calculate it:
(Number of OSHA recordable injuries × 200,000) ÷ total hours worked by all employees.

What it tells you:
A high TRIR means your employees are getting hurt more frequently than industry peers. This often points to issues in your hiring practices, safety training, or workplace culture.

Key tip:
Benchmark your TRIR against industry averages to see how you stack up. If you’re significantly higher, prioritize injury prevention before focusing on post-injury systems.

3. Lag Time

Why it matters:
Lag time is the number of days between when an injury occurs and when it’s reported to your claims team. It’s one of the most predictive metrics of claim severity.

What it tells you:
Longer lag times lead to more expensive claims, higher litigation risk, and worse outcomes for the injured employee. It also indicates poor communication or training at the supervisor level.

Ideal benchmark:
Less than one day on average. If your average lag time is 5, 10, or 12 days, you’re leaking money—and credibility.

How to fix it:
Implement a digital reporting system, train supervisors, and create a culture where employees are encouraged to report injuries immediately.

4. Return-to-Work (RTW) Rate

Why it matters:
RTW rate tracks how many injured employees return to modified or transitional duty instead of staying out on full disability. It’s both a cost and culture metric.

What it tells you:
A low RTW rate often signals poor coordination with medical providers, a lack of modified duty roles, or weak post-injury communication.

What to watch:
Track the percentage of claims that include indemnity payments. If more than 10–15% of your claims involve lost time, your RTW program likely needs attention.

Quick win:
Build relationships with cooperative clinics and proactively outline light-duty options. Communicate these clearly to doctors and employees.

5. High-Impact Claims: Litigation and Large Losses

Why it matters:
While high-frequency, low-severity claims add up, it’s often the handful of high-impact claims that do the most financial damage.

What to track:

• Litigation rate (percentage of claims that go to legal representation)

• Large loss count (claims above a certain dollar threshold, e.g., $50K or $100K)

What it tells you:
These numbers point to where breakdowns are happening—often in trust, communication, or claim handling quality. High litigation rates, for instance, may indicate the injured worker felt ignored or confused, not necessarily that the injury was complex.

How to address it:
Improve your claim communication strategy, review attorney partnerships, and perform regular claim file audits to identify patterns.

Bringing It All Together: The Metrics Hierarchy

Think of these five metrics as interconnected. Improving one will often impact the others. For example:

• Faster lag time can reduce cost per FTE

• A stronger RTW program can reduce both litigation and TRIR

• Fewer recordable injuries directly lower claim frequency

By reviewing these metrics monthly or quarterly, you can spot trends early and act decisively. You don’t need a degree in actuarial science—just a commitment to looking at the right numbers and asking the right questions.

Why This Matters More Than Ever

In today’s fast-paced workplace environment, being reactive is costly. Programs that succeed are the ones that move from fire-fighting to data-driven decision-making. These five metrics are your compass.

No more guessing. No more finger-pointing. Just clear signals that show what’s working, what’s not, and where to go next.

If you’re tired of feeling like Bugs Bunny in a leaking boat—plugging holes while more appear—start here. Track these five numbers. Build your strategy around them. And watch your workers’ comp program transform from chaotic to controlled.

Michael Stack, CEO of Amaxx LLC, is an expert in workers’ compensation cost containment systems and provides education, training, and consulting to help employers reduce their workers’ compensation costs by 20% to 50%. He is co-author of the #1 selling comprehensive training guide “Your Ultimate Guide to Mastering Workers’ Comp Costs: Reduce Costs 20% to 50%.” Stack is the creator of Injury Management Results (IMR) software and founder of Amaxx Workers’ Comp Training Center. WC Mastery Training teaching injury management best practices such as return to work, communication, claims best practices, medical management, and working with vendors. IMR software simplifies the implementation of these best practices for employers and ties results to a Critical Metrics Dashboard.

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

Injury Management Results (IMR) Software: https://imrsoftware.com/

©2025 Amaxx LLC. All rights reserved under International Copyright Law.

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.