What’s the difference between a 1.23 workers’ compensation insurance experience modification rate (referred to as a “mod” or EMR) and .83?
A good man to answer this question is Lee Zaretzky, president of Ronsco, Inc., which is located in New York City,N.Y. The company’s last reported injury was on Aug. 20, 2005. At this writing, the company has gone more than 225,000 hours without an injury to any Ronsco employee, and, for good reason, was the winner of the 2006 Excellence in Construction Safety Award from the Association of the Wall and Ceiling Industry.
But first, a little bit of background about the company.
Ronsco is a third generation family business, started in 1960 by Zaretzky’s grandfather and father. Zaretzky has two brothers. Scott ran the company from 1970 to 1989. Ron joined the business in 1985 and is the executive vice president.
“I started coming to the office when I was five years old,” Zaretzky recalls. “I did everything from managing the stock room to driving a truck to working in the field.”
During the summers, as a college student, he learned estimating from his father and brothers. After graduating from Syracuse University with a degree in accounting in 1989, he started full time with the company as chief financial officer and took over as CEO in 1990.
“We started as a carpentry business doing high-rises in Manhattan, prior to the introduction of drywall” Zaretzky says. “But when I took over, I geared down to focus on more specialized projects and interiors.” He explains this was due to a downturn in the market and a corresponding need to develop a specialty niche. The firm now has about 100 employees. Notable projects include the Tommy Hilfiger Worldwide Headquarters and the NYU Cancer Center.
Zaretzky sums up his business philosophy with his company slogan, “Building your reputation.” He explains that Ronsco’s proactive project management approach can be summed up in seven steps: 1) total scope proposal, 2) a quick-close contract, 3) preconstruction plan, 4) quick-start approach, 5) an accurate tracking of paperwork, 6) punch list eliminators and 7) a partner payment plan.
An underlying principle, which permeates the entire business, however, is safety.
High Mod Leads to Change
Zaretzky says that the company has always been safety conscious. But the high mod rate, which occurred in the late 1980s, galvanized him to bring an intense focus to this area. The shooting up of the mod rate was caused by three basic factors, he explains. First, as he acknowledges, there were some legitimate claims. But also, he says, “About that time there was a much more casual attitude about the paperwork, and OSHA was just beginning to enforce the written safety and HAZCOM plans. In our actions and practices we did everything we could to keep our employees out of harm’s way, but we didn’t have strict paper compliance.”
What really made the company’s mod skyrocket, Zaretzky says, “was an employee who went home and had a heart attack over the weekend. We took it to court and argued that there was not a causal relationship, but we lost. That resulted in a $200,000 claim, and that’s what set the mod over the top.”
The industry standard mod rate is 1.0, and a mod of 1.2 invites the scrutiny of Mandatory Oversight and Compliance Plan. Zaretzky says, “Once we hit 1.2, the NY State Insurance Fund steps in and enrolls you in their Compulsory Compliance Plan. In effect they’re saying, ‘You’re a dangerous company, so we’re stepping in and requiring you to join our mandatory plan. We’re going to review your current plan, modify it to comply and aid in its implementation to get you below the critical 1.2 threshold.’”
Zaretzky says that “at the time we regarded the whole thing as an unfortunate incident—and very costly, but it really put everything into motion. It caused us to formalize all our practices and put them into strict compliance, both on paper and in the workplace.”
Zaretzky says that the incident, for him, was a wake-up call, something that he should make his personal responsibility. “I realized I could have delegated the task, but I made safety a top priority and commitment and personally did everything to put the new program into place,” Zaretzky says. “For me, everything you really want done, such as safety, has to start with a commitment from the top. I revamped our Safety & HazCom plans, appointed our director of construction, Anthony Berardo, as our safety coordinator, and we rolled it out at our foreman’s meeting.
“We hold bi-annual company-wide training and certification programs to constantly increase hazard awareness and learn techniques for eliminating them. Every foreman has our written safety and HazCom program with MSDSs for all items on site and available to the employees at all times. Weekly toolbox talks are conducted; they cover a topic related to a particular exposure on a project or an incident or near-miss that occurred recently. Accidents and near accidents undergo a thorough investigation for the purpose of avoiding future incidents.”
Safety Starts with the Bid
A big area that Zaretzky zeroed in on, which is easily overlooked, is incorporating safety into the preconstruction planning. At Ronsco, safety starts with the bid. “We discuss logistics with the clients so we can engineer safety, even before we step onto the job site,” Zaretzky says. “This is quite a bit different than going after the bid and then going in to see what you’re dealing with. We look at it as bringing another value-added service.”
At the job kickoff meeting, as the project schedule is reviewed, so too are the safety considerations. Although the general principles of safety carry from one job to another, “different sites have specific safety requirements. This meeting allows the foreman to be prepared and have any personal protection equipment and other safety materials on the site in a timely manner,” Zaretzky says.
“We’ve found that, despite the natural assumption that safety would cost money, planning prejob engineering and overall safety planning cuts costs in the long run. It allows all involved to coordinate the project better,” Zaretzky says.
Was there any resistance from his employees?
“Like with any change, there was a slight resistance,” Zaretzky says. “Some had an ‘It can’t happen to me’ attitude, but we have a zero tolerance for unsafe practices. We have an unwritten rule: If you are not part of the solution, you are part of the problem.”
Zaretzky is quick to add, however, that the emphasis on safety does not result in a harsh or dictatorial work environment. “There are often difficult situations and you have to exercise discretion,” he says. He adds that, though he hasn’t fired anybody strictly for safety violations, he has fired people who do not reflect the company’s core values, one manifestation of which is a casual attitude toward safety. “If I have to say, ‘Why do I care more about your safety than you do?,’ I know I’m dealing with the wrong kind of worker for this company,” he says.
On the other hand, Zaretzky knows that some workers aren’t nearly as passionate about the program as he is, but they go along with it to humor him. “I can live with that,” he says.
“Safety is a state of mind,” Zaretzky maintains. “What makes a person safe is an awareness, awareness of hazards and awareness of remedies to eliminate them.”
In fact, Zaretzky has extended his program to employees when they’re away from the job “We lost two key foremen and several other employees to accidents that occurred away from work,” Zaretzky says. “When you have someone perfectly trained to fulfill a particular role and you’ve lost him due to an accident that happened when he was at home or engaged in recreation, that really hurts the business.
Practice What You Preach
About a year ago, Zaretzky, working with the United Brotherhood of Carpenters, developed and rolled out Ronsco’s “Off the Job Safety Program.” The last company-wide training and certification was a four-hour UBC First Aid Course, which focuses primarily on off-the-job–related incidents (burns, choking, etc.). Now many of the toolbox talks deal with nonjob-related situations. “For instance, in the fall, we talk about children going back to school, stopping for buses, watching for children crossing road,” Zaretzky says. “We just did one on gasoline for small power tools. We don’t use these on the job. It’s completely unrelated, but it builds awareness of the need for safety at all times.” Although the program has been in place for only about a year, the change, Zaretzky reports, has been “dramatic.”
Zaretzky is a board member of AWCI and is also on AWCI’s Safety and Insurance Committee, a position he chairs for the Association of Wall-Ceiling & Carpentry Industries of New York. He also is a member of the National Safety Council and is on the board of governors of the Building Trades Employers’ Association. “We also believe strongly in protecting the environment,” Zaretzky says. Ronsco is a member of the U.S. Green Building Council and is in the process of becoming a LEED-CI accredited professional.
Zaretzky and his wife have two young sons. Zaretzky enjoys his work but believes in keeping it in balance. “I enjoy working wisely, and have systems in place so I can spend time with my family and personal interests,” he says. He plays golf, skis and likes to travel and learn. These last two are often related to safety, showing that Zaretzky practices what he preaches to his employees. “I recently attended the Chicago Land Safety Conference,” he says. “I’m constantly looking for better ways and programs relating to safety. I enjoy receiving and sharing that knowledge.”
We asked Zaretzky whether there is also a financial payoff to safety not only in the obvious costs resulting from an accident, but also in insurance premiums. Zaretzky’s response? “If we were still at a 1.23 mod instead of our .83, our insurance costs would be twice as much as they are now.”