A Risk Management Information System (RMIS) can help aggregate risk data to evaluate business exposures, and it can be particularly beneficial for organizations with a large number of locations, employees, and claims. While many of these integrated systems are built to act as a central repository for lagging indicators, like Days Away, Restricted, or Transferred (DART) Rates and losses, they can also serve as a fundamental source for risk prevention methods and practices.
“Tracking leading indicators can be a form of armor for risk management safety professionals because they substantiate the real efforts being made to prevent losses,” said Vik Ramaswamy, Senior Risk Control Manager at Safety National. “RMIS dashboards will be very lagging indicator-focused, but the marketplace is full of applications that allow your organizations to go paperless in documenting safety procedures.”
Here, we examine leading indicators that can benefit your safety program efforts and why they matter.
Leading Indicators vs. Lagging Indicators
Lagging indicators are typically more recognizable than leading indicators, given their measurability. Lagging indicators are metrics used to measure past performance and typically include:
- Number or location of total OSHA recordable incidents
- Total Recordable Incident Rate (TRIR)
- Days Away, Restricted, or Transferred (DART) Rate
- Lost Time Incident Rate (LTIR)
- Root cause analysis
- Corrective and preventive actions
Leading indicators are metrics used as a predictive measure of future performance that can provide early warning signs of problems, allowing for potential correction actions. Some examples include:
- Near miss reports
- Job safety analysis
- Training reports, including the number of hours trained
- Identified hazards
- Number of safety violations
How to Know If a Leading Indicator Should Be Tracked
Good leading indicators are based on SMART principles, meaning they are specific, measurable, accountable, reasonable, and timely. For example, if you are hosting monthly safety meetings and tracking the number of employees attending, you want to create a reasonable goal for attendance. A 97% goal is much more achievable than a 100% goal, knowing that some workers will miss days of work during the scheduled time.
OSHA also notes some important steps for using leading indicators, including:
- Choose an appropriate leading indicator.
- Set a goal for that indicator.
- Communicate the goal, the importance of the indicator, and why you chose to track it with employees.
- Start using the leading indicator by collecting data, periodically measuring progress, and communicating progress with workers.
- Periodically reassess your goal and indicator. After some amount of time tracking your indicator, reassess if it may need more time to meet your desired goal.
- Most importantly, respond to what you learn, sharing the results with critical stakeholders in your organization.
Organizations should go paperless with tracking leading indicators as much as allowed. This makes your safety program goals more attainable with an arsenal of technology tools to evaluate your data. It can make tracking all facilities much easier for companies with multiple locations.
Why Tracking Your Prevention Efforts Matter
As a risk manager, creating organizational incentives can boost your efforts for program engagement. Developing a safety committee that meets regularly to review findings can assist in rallying the troops. Incentives could include items as simple as additional recognition to gift cards or merchandise.
Tracking leading indicators can prevent workplace injuries, reduce associated costs, improve productivity and performance, optimize health and safety standards, and increase participation in a safety program. They provide an honest view of whether your safety and health are effective at preventing accidents. Leading indicators are hugely beneficial for adverse loss risks. Providing your broker partner with processes your organization has put into place to tend to specific risks can prove favorable throughout underwriting your account, especially in high-risk accounts.
For more expertise, guidance or resources on this topic, please contact [email protected].