In the staffing world, Workers’ Compensation insurance can very quickly become a problem child. For most industries, “Comp” is something no one really has to think about.  For example, at a software company, our wages get reported each year all under 8810 and that’s the end of it. No harm, no fuss.

Staffing companies have a world of issues when it comes to Workers’ Comp insurance. After working with some of the largest staffing companies in the country, who are doing business in all 50 states, I can tell you that there are no definitive answers to how Comp coding should be done. The answers to specific questions will vary depending on which expert or specialist you ask. Comp is an area of business where everything is gray.

Staffing companies generally fall into three categories. The ones who take the conservative approach and code with the most expensive potentially correct code, those that live dangerously and use the least expensive Comp code that could apply, and those that don’t take rate into consideration and try to make the most correct choice. The first group is possibly cutting into their profits unnecessarily, the second is gambling on being able to talk their way out of an audit situation and the third doesn’t stand a chance in a price bidding war against the “living dangerously” competitor.

In addition to the struggles relating to coding a job correctly, staffing companies are faced with challenges regarding accurate setup of their jobs.  Recruiters operate in a fast paced environment; ensuring the Comp codes and rates are accurately set up on every job order in a given week is an unrealistic expectation for most.

In general, there are many solutions to the problems that come along with Worker’s Comp insurance. In regards to accurate job coding, one free resource that is available nationally is NCCI. Their website has a Risk Workstation (you must first call and set up an account) that will allow searches on customers and then returns the most commonly used Comp code for that customer. While this is not 100 percent accurate, it is a great tool in attempting to code customers correctly.

Some companies benefit from centralizing the Comp setup at a corporate location. While this drastically increases the accuracy of data input and thus produces accurate profit and loss estimates, it also slows a recruiter’s ability to fill a job and can thus decrease overall business. These policies are typically reviewed and changed as companies grow and move into new markets.

Each company has to come up with their own method of handling the correct coding of customers and orders. TempWorks Software is able to make this less painful by empowering staffing companies to control who has the responsibility within their organization to select the correct Workers’ Comp codes. There are many solutions available to the many issues involved in this area of business; ignoring the hurdles that come along with Workers’ Comp insurance will become expensive very quickly for a company of any size.

This post was written by Mari Kautzman, Chief Operating Officer at TempWorks Software

Tags: TempWorks Blog, TempWorks Software, Industry, Mari Kautzman, Workers comp codes, Workers' Comp, Workers' Compensation Insurance, NCCI