Paying attention to the basics.

At Hyatt Hotels, workers' compensation is a vital issue in part because of the size of the workforce and in part because of the nature of the work involved. The Chicago-based chain operates 123 hotels in the U.S., Canada and the Caribbean, employing 50,000 people--not only clerks and managers but also cooks, bell attendants, housekeepers and others in a number of physically active positions.

[ILLUSTRATION OMITTED]

Coping with workers' comp costs in that environment is largely a matter of paying attention to the basics, says Hyatt Hotels Corp. President Ed Rabin. That means everything from up-front accident-prevention programs to the close tracking of workers' comp cases when accidents do occur. "You have to take an aggressive, proactive approach to managing the costs," he says. "It's all about awareness and having an advocate to watch costs and work with injured employees to help them return to work."

Hyatt has built that advocacy into the organization with the creation of several regional "occupational health manager" positions. These managers--all of whom are trained nurses--monitor the workplace and workers' comp cases, and work closely with occupational health providers. "They have done a marvelous job of making sure employees do go to the right doctor and that the costs associated with claims are appropriate," says Rabin. "They interview employees when they're hurt and let them know from the very beginning that they are going to follow their case. That in itself alerts everybody involved to it being an important matter."

Overall, Hyatt's efforts are having an effect, with accident frequency down 11 percent and severity down 17 percent last year; the company expects both areas to drop another 15 to 20 percent this year. "Just looking at the number of people we get back to work, the number of lost work days and similar measurements--those areas have improved," says David Mikulina, Hyatt's assistant vice president of risk management. "The trends are going the right way."

"A lot of people think workers' comp is just a part of the cost of doing business, and that's exactly the wrong way to look at it," says Rabin. "It's a variable cost, it's highly controllable, and it is meaningful--because if left to its own devices, it can eat up a lot of profits."

ED RABIN * PRESIDENT, HYATT HOTELS CORP.