Six Sigma Methodology & Workers Compensation

Improving effectiveness and efficiency of Workers’ Compensation

It is not our intent to fully explain the methodology and many adaptations of Six Sigma that have been developed over the years. However, what is important to understand is that Six Sigma is not a function of business, nor is it a business process in and of itself. Rather, Six Sigma is an approach to finding new levels of achievement and contrary to what normally occurs in worker’s compensation, the decision process is based upon metrics.

Six Sigma and Workers’ Compensation

Six Sigma business process applies a set of measurements to reduce variation in under-performing processes. The applications in Workers’ Compensation are in fact staggering simply because the process of managing all of the cost drivers in this arena is beyond the scope of conventional business practices. Six Sigma is a proven methodology that can achieve meaningful and long-lasting WC improvements.

What can Six Sigma do for your business?

Our executive leadership was managing workers’ compensation and risk management at Allied Signal (now Honeywell) in 1991 when Larry Bossidy was at the helm and Six Sigma mandates became the reigning corporate culture.

In a three-year period, we reduced Allied Signal’s cost of workers’ compensation by over 33% - a striking contrast to the steady increases most businesses experience with this cost. We also managed to create an environment at each of our facilities where employees wanted to come to work, thus reducing our disability costs, time away from work, lost productivity, and WC-related medical costs.

At Allied Signal, we created the very first Six Sigma Workers’ Compensation Program, which today remains the gold standard in this field. In the decade that followed, we continued to improve upon this Program and found new solutions to change cost drivers and enhance the performance of the stakeholders.

In the past seven years, we have implemented Our Program at a variety of medium-sized businesses spanning industries and geographic locations. Read more about Our Program to better understand how your business can benefit.