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Proven Strategies for Reducing Workers' Comp Expenses for Staffing Agencies

Staffing agencies are faced with numerous ongoing costs, and the addition of workers’ compensation expenses can further exacerbate their challenges. Finding effective measures to reduce workers’ compensation costs is imperative for staffing agencies. These costs can determine whether an agency makes a profit or incurs losses on a deal. Luckily, there are proven strategies available to manage and control workers’ compensation costs effectively.


The following are the top 5 strategies to assist staffing agencies in enhancing their hiring practices, improving their offering, and minimizing costs.


  1. Screening Process

Early in the hiring process, clients should have candidates undergo a lengthy screening process evaluating work histories and safety records to gauge the risk of workplace injuries.


  1. Drug Testing and Background Checks

Background checks for potential hires can reveal any red flags from previous fraudulent workers’ compensation claims or accidents. It's good practice to verify candidates’ references and credentials for legitimacy.


  1. Job Descriptions, Requirements, and Expectations

Clear and detailed job descriptions and job task analysis can help reduce the potential for accidents, better match candidates to the work, and clarify responsibilities and expectations.


  1. Pre-Employment and Job Placement Testing

Physical Capability Assessments play a critical role in mitigating the exposure to workers' compensation costs. When a position necessitates specific physical demands, staffing agencies should incorporate assessments to prequalify or certify the worker for these proficiencies to minimize the potential for workplace injuries.


And the #1 tactic for optimizing the hiring and staffing process…

  1. Data and Analytics

Organizations can mitigate potential workers' compensation issues through the strategic utilization of data to analyze trends, the efficient allocation of resources, the prequalification or certification of candidates for specific roles, and the implementation of enhanced hiring practices. These measures will ultimately result in improved service offerings to their clientele.


Should you wish to learn more about these key strategies or the range of services provided by DataFit to staffing agencies, please do not hesitate to contact us to schedule a complimentary strategy session.

About the author

Philip Stotter, MS, CEP

Philip Stotter, MS, CEP has over 25+ years of experience in the medical, health, wellness, and professional sports industries. Clinician turned business developer, Philip is a sought-after industry speaker and professional consultant. His ground-breaking work in injury prevention, paired with the science of human movement, has put him at the forefront of product development with a multidisciplinary approach that integrates physiology, biomechanics, cutting-edge technologies, and data-driven research.