!Cuidado! Construction Industry and the Latino Workforce

In the next 10 years, the construction business will need to fill more than 180,000 jobs. As the rush to fill these positions advances, workers’ compensation professionals will be challenged along with the construction firms to assure that workplace safety and training are not lost amid the diversity of languages and cultures of immigrants, particularly foreign-born Hispanics, whom construction firms have come to rely upon for labor. Hispanic immigrants filled nearly 40 percent of new construction jobs in 2003.

Construction will probably never be the safest industry. In 2004, there were 1,234 fatal occupational injuries in construction and 401,000 nonfatal injuries and illnesses, according to data from the Bureau of Labor Statistic’s Injuries, Illnesses, and Fatalities program. The nonfatal injuries and illnesses incidence rate was 6.4 per 100 full-time workers in construction and 4.8 per 100 full-time workers in all private industry.

A rising rate of fatalities and injuries among Hispanic workers in the construction industry, along with the expectations of more Hispanic hires, have workers’ compensation and safety professionals concerned.

Fatal work injuries involving Hispanic workers increased nearly 28 percent from 1996 to 2004, at a time when fatalities for workers in general were declining, reports the BLS Census of Fatal Occupational Injuries. Nearly two-thirds of fatalities among Hispanics during this time involved foreign-born workers. Additionally, the BLS reports that about one in four injuries to Hispanics occur in construction.

Greg Suman, chief operations officer of PAC West Captive Insurance Company, which writes workers’ compensation in the construction arena, is among the concerned. In a business where the hazards are high and there is a rush to keep up with the housing boom, he says “a lot of things are falling by the wayside … a lot of important training and safety have fallen through the cracks.

“They [contractors] put people in there that don’t have a lot of experience,” Suman said. “From a safety standpoint, they don’t have time to properly train them, and so a lot of these employees get injured on the job,” Suman added. Basically what’s happening is that some contractors are taking “a warm body, getting whoever in there” to make deadlines.

What worries Suman is that many of these new workers do not have the knowledge or experience to do the jobs — and do them safely.

“It is a significant problem and everyone is trying to address it,” agrees Jim Dennison, director of construction practice, at Armfield, Harrison & Thomas Inc. in Leesburg, Va., which is a member of RiskProNet International. Dennison is referring to the influx of new workers, including immigrant workers, into construction.

The industry’s reliance upon Hispanics is unlikely to lessen. “For Hispanics, it [construction] remains an important source of employment, or the other side of the coin is that Hispanics are a very important source of labor for this industry,” says Rakesh Kochhar, associate director for research, at the Pew Hispanic Center in Washington, D.C.

In 2004, 17 percent of foreign-born Hispanics worked in construction in comparison with only 7.2 percent of native-born Hispanic working in construction, according to the Pew Hispanic Center’s “Latino Labor Report, 2004.”

Kochhar added that trends in 2005 and 2006 indicate that Hispanics, especially foreign-born Hispanics, continue to flow into the construction field, .

Dealing with foreign-speaking workers poses challenges of language and culture for employers and their insurers.

“One is just an issue of simple communication. The lack of a company’s ability to understand their foreign born workforce, foreign speaking workforce, affects the quality of their products and services,” said Tom Honn, senior vice president, Risk Management Services, at Mesirow Insurance Services based in Illinois.

“It obviously affects the safety element too when companies can’t communicate effectively and train effectively for safety,” he said.

Mary Ann Krautheim, senior vice president, national construction practice, for Willis, based in Minneapolis, Minn., agrees that the “big issue” is safety. She stresses that education and language gaps must be addressed when dealing with Hispanic and Asian workforces.

“Good organizations that recognize this will have multilingual supervision,” Krautheim said. “Organizations have done a really good job in the last couple years. They will have a lot of visuals in terms of safety, pictures instead of words, and certainly [information] in Spanish. … There’s really got to be a lot of focus on training and supervision from a safety standpoint. Not just for individuals but also those working around them.”

Krautheim added that many construction companies will go out of their way to provide a safe environment for Spanish speaking workers. “It’s a valuable labor pool,” she said.

Charles Comiskey, senior vice president at Brady Chapman Holland in Houston, also a member of RiskProNet International, stressed that construction companies that want to improve safety for Hispanic workers must address more than the language differences; they must understand that there are cultural differences at hand as well.

“Being bilingual doesn’t mean that you understand enough to communicate well,” Comiskey said. “It’s best if you have someone that is bicultural as well. There is a significant difference. I could be bilingual but that still doesn’t mean that I understand the Hispanic culture. And without understanding it there will inevitably be miscommunications.

“The intelligent contractors have foremen or supervisors who are being well trained in safety who can then communicate that to the workers beneath them,” Comiskey said. “You have to have management who is bilingual and bi-cultural if you have a large immigrant force.”

Handling claims is also an issue

While the insurance industry’s National Council on Compoensation Insurance reports that workers’ compensation claims frequency declined again in 2005, Suman says he hasn’t noticed the same trend in contractors’ workers’ comp.

“I’ve seen that frequency is down in other industries but haven’t seen it in construction,” Suman said.

But Willis’ Krautheim says she sees a lot of the same trends in the overall workers’ compensation market in contractors’ workers’ comp. Training, education and reforms, are important, particularly in the construction industry.

“If you look at the last crisis in the late ’80s, the insurance industry, construction industry, supporters of construction industry had a focused effort on safety so that incident rates are dropping,” she said. “You drop frequency you tend to drop severity … also state reforms have helped.”

The rise in immigrant workers in construction also affects workers’ compensation claims costs when a carrier cannot locate the injured worker to follow-up on the claim.

“The injured worker gets sent home to recuperate … then they might go home to their native country, and the carriers can’t get a hold of them,” Dennison said. “That means the claim cost rises and goes up and then it may have to be reopened again. Reserves do have to be readjusted, etc.”

Fraud is another issue driving workers’ comp costs for contractors, added Suman. “There is training that goes on across the border for Hispanics on how to work the system in California to their advantage,” Suman said. “It’s really been a huge problem. It’s gotten better with changes with the work comp environment and California has improved but you are still seeing it quite a bit.”

Smaller firms more at risk

Language and cultural barriers may be more of a danger with smaller construction firms.

Armfield, Harrison & Thomas’s Dennison notes that smaller operations are more at risk as a result of gaps in their safety programs. “I believe it probably is more of a problem on the residential side,” he added. “Not the general contractors, but some of the trade contractors.”

“The majority of residential contractors, the vast majority are small,” Comiskey said. “And small means less well trained personnel, not as much safety equipment, not as good of insurance coverage, all the issues that go with being small. … All of which lead to claims.”

Suman agreed that most injuries and fatalities in construction seem to be generated from the residential side of the business. “It seems like commercial contractors from my perspective have their act together a little more than residential contractors,” Suman said. “And a lot of that has to do with the rapid growth of communities and the housing boom. That’s contributed significantly to the injuries.”

Sumand sees a sense of urgency among contractors to keep people working or they may lose the job. “A lot of the training falls by the wayside and becomes secondary to the job.”

“For a lot of contractors their safety programs are a make or break; whether or not they are profitable entities,” Honn said. “And this becomes more critical to the smaller operation.”

According to Brad Giles, corporate vice president at the Washington Group, an international construction firm based in Boise, Idaho, it’s a matter of resources. The small construction companies don’t have the same level of enforcement activity as larger companies. “There is not the training in the residential marketplace like in the others,” Giles said. “If you go to work for a contractor like us or our major competitors, we are going to have requirements for training, and have safety programs, safety professionals. Some of the smaller guys or the residential guys, won’t have that requirement.”

The Washington Group has more than 25,000 employees, working in 40 states, and 30 countries worldwide.

Leading contractors in the right direction

Since the mid-1980s when the workers’ compensation line was in a crisis, insurance carriers and producers have been building a service platform to address some of these issues, according to Willis’ Krautheim.

For example, Krautheim says, insurance carriers have produced safety awareness and training modules in Spanish and in English. “It’s difficult to keep up with different parts of the company where you have a very large Russian population for example,” she said. But “because Hispanics make up such a large portion of the population, there’s probably a lot more available to support contractors and brokers in Spanish.”

Krautheim added that some states require firms to have a Spanish speaking superintendent on site for certain job sizes. Overall, she said the language barrier has become less of a challenge, but it’s something that good, solid contractors still monitor.

Suman noted that there are things producers can ask a contractor client when defining their workforce.

“I always ask about turnover ratio,” he said. “Ideally it’s 5 percent to 10 percent and if it’s over that amount you start asking more questions about workforce.” Also, contractors must do background checks on their employees. “Double check on Social Security numbers and green cards to make sure they were legitimate.”

Honn said he thinks the larger safety industry is moving forward on the issue. “OSHA, for instance, is making a lot of their materials available in Spanish and in other languages to assist employers in communicating this information to foreign-born and foreign-speaking workers,” Honn said. “The insurance industry and carriers are creating materials available in multiple languages so that they can use those in the training process.”

According to Honn, Mesirow spends a lot of time helping accounts set up management structures to make sure they have appropriate safety training in place. “In a lot of cases, it’s a matter of helping them with the evaluation of a field supervision staff: do they have enough people, are they in the right places, are they doing the right things to ensure that people are safe and are getting the message?”

Honn said that because many contractors today rely heavily on foreign-born workers they have to put more management people in the field to make sure that things are going the way they should be. “But then, on the other side of the coin, they’re finding that when they get better field supervision and more pervasive management presence out in the field, things are being done correctly. They’re not having as much rework, they’re not having injuries, they’re able to identify poor work practices or poor communication ahead of an injury event.”

“The contractors that we find that have done the best job are the construction companies that hire people who are bilingual — superintendents, or field directors,” Dennison said. “This helps put the [immigrant worker] at ease.”

He also said that contractor associations are providing bilingual seminars. “They are teaching Hispanics English and also other minorities English and then they are teaching superintendents basic construction Spanish, so they can better communicate with their employees,” he said. He even knows of one large construction company that offers English courses to the workers’ families as well. They are “doing this so all of the family understands what’s going on with the worker and with their workers’ compensation claims.”

Comisky added that “were it not for the influx of immigrants we would not have anywhere near as much work being performed” in the construction market today. “To that degree it has benefited workers’ compensation.”

Topics Carriers Workers' Compensation Washington Contractors Market Training Development Construction