The Pareto principle, widely known as the 80/20 rule, states that on many occasions, 80 per cent of effects come from 20 per cent of causes.
The literature suggests that workers compensation is not an exception to this rule and that this rule may apply to workers compensation in a more exaggerated form. For example, with some self-insured policies, it has been identified that 80 per cent of workers compensation claim costs arise from just 5 per cent of claims.
As such, a relatively small number of high cost claims can result in a disproportionate premium payable cost to the employer. Despite this obvious cost relationship such injuries have adverse impacts upon the injured worker, loss of organisational productivity and adverse effects upon morale and workplace culture.
For around 15 years now, I have managed workers compensation and injury management within the cleaning industry. I have experienced a number of different workers compensation schemes throughout Australia whereby the most effective way to reduce workers compensation premium is by return to work of injured employees.
I had always wondered how the Pareto rule would apply to the cleaning industry and set upon a study of available incident statistics to establish if any Pareto relationship exists.