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Industry Insights

Moore: Workers' Comp Budgeting After the Pandemic

  • National

One of the most difficult tasks for employers in the post-pandemic era requires a large amount of data analysis. Workers' comp budgeting adds more complexities to the mix.

James Moore

James Moore

Every week, the news cycle produces reports that a certain national chain of stores or restaurants completely closed or substantially reduced its number of stores.

Workers' comp budgets were difficult enough for companies without the pandemic and post-pandemic effects. Employers’ budgets should contain considerations for three simple situations: growth, staying the same or reduction.

Budgeting in general would require these three budget types. Of course, you are not reading this to cover general business budgets.

The three sources for your upcoming or current workers' comp policy year come from documents you should always keep easily accessible.

They are:

  • Current workers' comp policy declarations page. 
  • Last year’s accurate premium audit.
  • Payroll projections for the policy year — the most difficult numbers to calculate due to inflation and the post-pandemic effect. If your policy year does not match your company’s fiscal year, you will need to make that adjustment.

Yes, I do realize that many other documents could possibly be used in the comparisons.  Keeping it simple avoids making a complicated workers' comp budget comparison.

Matching the numbers

Comparing the numbers on the above data sources will point you in the right direction.  As each employer is very unique — even within the same industry, the best results come from using Excel or another type of spreadsheet app such as Google Sheets or Apache Office — the latter two are freebies.

One can use the old-school method of manually looking over the numbers of the three data sources without using spreadsheets. Do the numbers from the three data sources make sense if your company is growing, staying the same or in a reduction phase?

If you feel something is amiss, an email to your agent may readily answer your questions. A business owner or corporate executive's intuition remains a powerful force for making business decisions.

This blog post is provided by James Moore, AIC, MBA, ChFC, ARM, and is republished with permission from J&L Risk Management Consultants. Visit the full website at

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