Daphne Boston
Hello, everyone. And welcome to this week's lecture on the direct and indirect cost of injuries. We have our special guest from last week, Justin Molocznik from JTM Construction back with us this week. And he's going to be talking to us today about effective methods that he's used to reduce the direct and indirect costs of injuries at his current and previous companies. So thank you, Justin, for taking time out of your busy schedule to come back and visit with us this week.
Justin Molocznik
Absolutely. My pleasure. And really such a valuable subject to be discussing.
Daphne Boston
Awesome. Okay. So first, Justin, would you please talk to us about how you personally view the differences between direct cost of injuries and indirect cost of injuries? And if you would, please, also, give us some examples of both types of those costs that are common in the construction industry.
Justin Molocznik
Most definitely. A great question because I think we need to kind of evaluate the language that we're using around these things. It can be confusing. So when I think of direct costs, I think of you can see them. They can show up on an expense report, hospital bills, medical supplies, things that are clearly identifiable and related back to the injury, even workers comp claims. Those are things that when we evaluate an injury that happens, those are the line items that get brought up in front of leadership groups to say, well, these are the direct costs and the loss that we take when we have someone injured.
And then there's the indirect costs. On the financial side of things, talk about worker time loss and replacement of workers. There's a lot of money that goes into training individuals and bringing them up to speed. And if you -- especially if you have a valued team member who's in the construction industry, been a part of a team for a long period of time, it's almost impossible to replace those individuals. So there's definitely an indirect cost there.
Project time loss when it comes to a field worker. And then all the stuff that goes for health and safety, accident investigations, time spent just getting down to a root cause on things. There's just a lot of different financial indirect costs. But then there's another level, another indirect cost, which would be nonfinancial. And I think that goes back to the cost of the trust that's lost with workers, or the uncertainty that happens when an incident happens.
And you get the opportunity to work in this industry, you actually have to go and experience it. Hopefully, in your students' careers, they don't have to. But, you know, it's something that you take away when you see an incident happen on a jobsite. And then you spend some time with the workers. There's a lot of communication that has to happen. And there is definitely a cost -- an indirect cost of an injury on the jobsite with just kind of how it is connected to all the trade partners and workers and project managers on the jobsite and how it impacts them personally.
And that's something that needs to be appreciated that exists. And certainly, the big thing is the communication piece. You can't go back in time and prevent an incident from happening. But certainly, how you respond to that incident is of great importance.
Daphne Boston
Yeah, absolutely. Yeah, those are awesome points, very -- especially the indirect cost of the trust that's lost. Yeah, very key there. Okay. So next, Justin, we do have a unit in our textbook on worker's compensation. Could you talk to us a little bit about self-insured employers versus state insured employers with regard to workers compensation?
Justin Molocznik
Most definitely. And I think that there are two very different approaches to how workers comp is handled. I've worked in industries and for companies that, you know, use both. Currently, the employer that I'm at now uses -- is a state insured employer. And a lot of great advantages to just having that relationship with the state. When you have an injury, the employee goes into the clinic. They're filling out paperwork.
That's the state insured paperwork. And it's going -- and they're helping you manage those cases. A lot of times, when you have self-insured, there can be some things that are lost in the process. So it's really nice to, I guess, for lack of a better term, have that accountability when you have an employer or employee who maybe has some workers comp costs coming through, that the state is aware of those. They're going to show up most likely on your OSHA logs.
And they help you manage that process. The state does a really good job, especially here in the State of Washington, around their program.
Daphne Boston
Awesome. Awesome. Okay. Yeah, that's great insight. And so at your company, is workers compensation -- is that done by a designated workers compensation specialist? Or does Safety handle that? Or is that like a responsibility for HR or Operations?
Justin Molocznik
You know, with a company our size, about 150 employees, it's actually a collaboration. So I personally take some accountability for the workers comp as well as human resources. So it's a collaboration. And there's elements of workers comp that I won't really get into. And there's elements of the workers comp that HR really won't get into. But it works really well. I think, as organizations start to tip over to a little bit larger, it makes a lot of sense to have one person take ownership of that program.
And certainly, if you're a self-insured employer, there should be someone managing that program because you don't have that groundwork laid by the state-run program.
Daphne Boston
Okay. And this is kind of a one off, but it made me think of my experiences at Boeing. There were people that -- they were called disability management specialists. And they worked with the Safety Department and the workers comp specialist on case management to bring people back to work. And so do you all get involved with case management at all? And how do you handle people that have been out for a long time, like sometimes years, and trying to get them back to work either like in a light duty situation or just in a new job altogether?
Justin Molocznik
I think that that's one of -- case management is a huge point in reducing any type of costs that come from an injury. Having that relationship with the individual -- I mean, it's like you said at Boeing that they actually have a job that was created to work with those individuals. If you look at the statistics, the longer someone is off of work and not returning, the less likely they are to actually return to the job. And that's at a detriment to not only the individual, but the individual's family.
And it could impact the rest of their life. So -- and really what's important in the State of Washington too is they put a lot of emphasis on this. There are a lot of grants that are written to help support their Return to Work program. Washington and OSHA as well are fully on board and understand that those statistics, they loom over everything. And when you have an injured worker, the immediate response needs to be how can I get this worker back?
How can I create some kind of light duty or modified duty for that individual to come to work and not have them certainly sit at home, looking to get back to work? And then we start rolling in things like the opioid crisis, where if they get on the pain management, that can impact their life as well. So case management, meaning just having somebody who has a close relationship and can talk to that individual, talk them through return to work, and then create an environment where that person feels welcome and has a job in some capacity of what they were doing to return to.
Daphne Boston
Awesome. Yeah. Good insight. And one more one off I'm thinking as we're chatting. So OSHA has the Days Away, Restricted and Transfer metrics, so to speak, the DART. And so, like, when I worked at Boeing, they didn't use DART. It was like a customized version of DART. So do you all use DART as it is from OSHA? Or do you have your own performance metrics on those different types of injuries that are causing people to have time loss that are costing the company money?
Justin Molocznik
You know, and again, with a smaller organization, sometimes, we go back and rely on the language that's been created by the regulators to just help make sure everybody understands what you're talking about. So we utilize the DART and just kind of talk through that. And, you know, really important, when it goes back to the case management piece, is that when you have someone who's, you know, functioning in that area, we got to make sure we're keeping track of the days that they're in that spot because those are things -- again, things that transfer to your OSHA logs, and you have to get to be aware of. So it's important to definitely be managing that piece of it.
However you look at it.
Daphne Boston
Yeah. Right. Okay. Perfect. And so before we close, are there any, like, webinars or podcasts or other resources that you would recommend to the students that would provide them with more information on effective methods in the reduction of the cost of injuries?
Justin Molocznik
I think that one of the most important things is when you start working for an organization, it's really good practice to link up with the finance department, understand the costs that have been incurred already within that employer. So you know what sandbox you're playing in, really. But, you know, another great resource, especially in construction, is your local chapter of the AGC, American General Contractors, has some really great information and tools to help you through that. They are directly linked with the state-run program.
So if you're not privately insured, you're state-run, they have resources there to help you out. And then the other piece, good old CDC. We hear a lot from them lately. But they have a calculator on their website. Also great identifiers as far as how to mitigate costs. So that's a good one, too. So I would recommend, you know, definitely, if you're in construction, the AGC is a must. And then as far as curiosity goes, it's how can I calculate out the numbers that come from a loss and how can we manage that a little differently.
CDC is a good spot to go as well.
Daphne Boston
Awesome, perfect. Well, that is all the questions that we have for you today for this week. And so it was great to have you back once again, Justin. We appreciate you sharing your knowledge with us today.
Justin Molocznik
Thank you so much.
Daphne Boston
And thanks, everyone, for tuning in to this week's lecture. That does conclude it for this week.