In high-risk industries like construction and manufacturing – where margins are already slim – rising medical costs and claims severity are putting additional strain on workers’ compensation programs. But for Blake Nilsson (pictured), client advisor at The Buckner Company, the solution isn’t jumping into alternative insurance structures. It starts with culture.
“If an employer is paying significantly more for insurance than their peers in their industry, it can really move the needle and affect their ability to compete and win business,” he said.
Nilsson believes companies must first understand what’s driving their losses before exploring options like captives or large deductible plans. Too often, he sees a reactive cycle: a company experiences a spike in premiums, then makes a hasty switch to a new structure – without addressing the underlying issues.
“We wouldn't really recommend that to anybody until they have a good grasp on the things that are driving their experience and the things they can do to control their losses,” he said.
For Nilsson, real change begins internally – with leadership accountability, clear safety expectations, and consistent follow-through. “We try to help people create that culture, implement these programs and be consistent with them over a period of time,” he said.
A well-run return-to-work program is a cornerstone of that approach. “There has to be buy-in from ownership and upper management,” he said. Without that commitment, even the best safety messaging can fall flat.
He also stressed proactive planning over reactive triage. That means having modified duty roles in place, maintaining relationships with medical clinics, and keeping injured employees meaningfully engaged during their recovery. “It’s the best thing for their mental health and it's the best thing for the employer.”
Nilsson doesn’t shy away from a tough point: not everyone is a fit for labor-intensive roles. “We don’t want to hire employees who really don’t want to work,” he said. That’s why he advocates for clear communication about company expectations – starting on day one.
Dedicated roles such as safety directors can make or break a program. “They check in regularly with the injured employee, track the types of injuries, work with the carrier, and drive that culture,” Nilsson said.
The stakes are even higher now, as labor shortages have pushed companies to accelerate hiring and shortcut onboarding. “Any time a company is trying to drive growth over organizational best practices, we're going to run into more issues with claims,” he said.
The quality of hires is declining, he said, and so is risk awareness. “Risk tolerance is getting higher,” Nilsson said, particularly among younger or newly recruited workers who may lack proper training.
Despite these growing concerns, Nilsson noted that some relief has returned to workers’ compensation rates. “Workers compensation is something I’ve seen, at least here in my region, improvement on over the last little while,” he said. Carriers are competing for business again – but that won’t last.
“Insurance carriers are going to start to be more selective, and so they're definitely going to be looking more for these best practices organizations.”
That means employers with poor safety records and reactive programs will see fewer carrier options – and higher premiums. Nilsson cautioned against trying to solve those problems with structure alone.
“When employers have had some bad experience, the knee-jerk reaction is to seek out other types of insurance programs… and it's just not always in their best interest,” he said. Without first tackling loss drivers, jumping to a captive or retro plan can backfire.
Culture remains the through-line in every success story Nilsson sees. Companies that lead with safety, treat injured workers with care, and plan for risk – not just insure against it – are not only controlling costs but becoming magnets for talent.
“Good employees want to work for good organizations,” Nilsson said. In workers’ compensation, that’s more than a slogan – it’s a strategy.
