Updated: May 3
The Total Recordable Injury Rate and the Experience Modification Rate are both critical employer safety metrics.
Both the TRIR and the EMR are enshrined safety metrics within the Construction Industry (and others) as indicators of an employers safety performance. If you're wondering why this is important, the Experience Modification Rate, the Total Recordable Injury Rate or both of these factors can be used in the hiring process of the numerous contractors working on a construction project.
So, for example, if your Experience Modification Rate is over the average rate (a 1.00 is average), you will likely get passed over for a lot of work. Similar with the TRIR whose scores are compared to an industry average. If your rate is 6.2 but your industry average is a 4.1, that could spell a lot of trouble.
Similarities Between The Experience Modification Rate and the Total Recordable Injury Rate.
The similarities are few compared to the differences. So, let's start with similarities. First, they both, as stated, attempt to describe what type of safety culture you have by measuring your injury performance.
Second, the TRIR and the EMR are both lagging indicators. They take past performance to arrive at a current rate. Of course, future performance could be better, worse or the same depending on a variety of factors.
As mentioned above, a third similarity is both are utilized to measure the quality or results of your safety program, and to measure one company's performance against another's. This practice of qualifying new business proposals or contract renewals partially based on a company's EMR or TRIR is hotly debated. There is no shortage of strong opinions on the subject. I even posted on the use of Experience Modification Rates for this purpose twice. So, if you're interested in learning more about this industry practice, you can link here and here.
Lastly, they are both very easy to improve (in theory). If you reduce your workplace injuries, you'll reduce both your Experience Modification Rate and your Total Recordable Injury Rate.
Differences Between The Experience Modification Rate and the Total Recordable Injury Rate.
The differences between the EMR and the TRIR are what I find most interesting because these are two very different routes trying to arrive at the same destination. Just for starters consider the varying level of complexity to arrive at both of these metrics. The TRIR is wonderfully simple:
# Incidents X 200
Total Man Hours Worked
The U. S. Bureau Of Labor Statistics has an online TRIR calculator to use to make it that much easier for you.
On the other hand you have the Experience Modification Rate which is an actuarially determined rate with too many factors to discuss here (even if I could!).
Here is the first page from an Experience Modification Worksheet. You can see many of the factors used to calculate an EMR (but not all!). And, the complexity is compounded by the fact that this company operates in multiple states; many of whom have special rules that must be factored into EMRs.
Sensitivity To Change
A second difference between the two metrics is how sensitive they are to change. The TRIR is measured annually. So, every year you get a "reset." If last year's score was bad, you can bear down, improve your safety practices & procedures, reduce injuries and improve (reduce) your Total Recordable Injury Rate.
The Experience Modification Rate, in contrast, doesn't change swiftly. The EMR is an average of your workers' compensation insurance claims (injuries) experience over 3 years compared to others in your industry. And, it is an average that begins 4 years ago (or 4 insurance policy periods ago). So, last year's "experience" isn't included. Rather, the 3 years beforehand.
This can be either good or bad for your EMR. If you have an Experience Modification Rate that you wish to improve, one good year isn't going to help you right away. It'll take 2 years, or policy periods, for that good "experience" to enter into your 3-year average. And, even then, it will only account for 1/3 of your average. Making improvements to your Experience Modification Rate requires a long-term commitment to improvement of your safety culture.
On the other hand, if you have a good EMR, one bad year won't sabotage your Experience Modification Rate. And, even companies with great safety cultures will have a bad year once every 5 or so years. Accident's happen. If one worse-than-average-year rolls into your 3-year average, your EMR won't suffer too much. We have a description of Experience Modification Rate Calculations on our website if your interested.
The Total Recordable Injury Rate can have financial consequences for your firm if you fail to win business as a result of a poor TRIR. But, there is no direct financial impact as a result.
The Experience Modification Rate, however, has a direct impact on your bottom line; good or bad. Insurance companies use the Experience Modification Rate to modify workers' compensation premiums (the amount they charge you for work comp insurance). The EMR is multiplied by your "standard premium" and you are assessed an additional premium (debit) or awarded reduced premium (credit). If you wish to learn more review What Is An Experience Modification Rate.
The OSHA TRIR relies on self reporting. Businesses are responsible for completing logs and reporting their injuries. Many say that reporting is a problem in the system with larger companies (having more sophisticated safety cultures) being more compliant than smaller firms.
On the other hand, the Experience Modification Rate data is supplied by the insurance industry. Every time a businesses files a work comp claim with their insurance carrier a record is created of the workplace injury. Insurance companies send this data, among other things, to the "Rating Bureau" responsible for producing EMRs. We have not seen compliance discussed as a significant issue with respect to Experience Modification Rates.
Frequency and Severity
Another big difference between the TRIR and the Experience Modification Rate is how they treat frequency and severity. The TRIR doesn't distinguish between or weight incidents of varying severity. An injury involving a few stitches on the hand is one TRIR incident just as a severe permanent disability. The TRIR is a measurement of frequency.
The Experience Modification Rate is a measurement of both frequency and severity. How each is weighted in the Experience Rating Algorithm is discussed in this post. But, you can be sure that the larger the dollar value of a workers' comp claim, the greater it's negative impact on your Experience Modification Rate. Likewise, frequency is also a weighted measurement. If you have 20 claims averaging $2000 per claim, it won't negatively impact your EMR 10 times more than 2 $2000 claims would have. 20 will negatively impact your EMR more than 10 times the effect of 20 claims. This is due to the belief that the odds of a severe claim (injury) increase as the frequency of claims increases.
Drawing Comparisons (Similarities and Differences)
Drawing comparisons between your company's metrics and others is beneficial to help measure your safety program's success, set goals, etc. And, you can do this with both the TRIR and the EMR.
For example, the Bureau of Labor Statistics publishes the TRIR national average and industry-specific averages. So, after calculating your TRIR you may come up with a 2.75 and find that you're doing better than average across all industries (2.90 National Average). However, you're a construction company and you drill down to find that the national average in construction is a 2.5.
So, now it looks like you have some work to do. Especially, since, by definition, more than half of the construction firms have a better Total Recordable Incident Rate than your firm. Will that hurt your chances competing for new work?
The Experience Modification Rate is loaded with more information than the TRIR. For example, we know that a 1.00 is average. Above a 1.00 worse than average. An EMR below a 1.00 is better than average (I have posts about good EMRs and bad EMRs if you want to learn more). If you're EMR is a .88, then you know you're doing a nice job with your safety management. On the other hand if your Experience Modification Rate is a 1.12, then you know you have some work to do.
And, your Experience Modification Rate is a comparison of your incident record compared to your industry; not all businesses. This is great because you know how you stack up compared to similar companies. Even more informative is that your EMR is a comparison of your safety history against those in your industry and those who operate in the same states as you. So, if you operate in Georgia, Florida, and Mississippi, your Experience Modification Rate won't factor in how you compare to similar firms in, say, Oregon, Colorado and Arizona.
The TRIR and the Experience Modification Rate are both used to measure safety performance, but they are very different metrics in terms of how they are calculated and the data used to determine their measurements. The EMR is a good, long-term overview of safety performance. And the TRIR, we think, gives a nice recent snapshot (the current and prior year) of an organization's safety record. We have seen Risk Managers collect multiple years worth both rates for review before making hiring decisions about 3rd-party contractors. Please contact us if you have any questions about how your Experience Modification Rate is calculated. The data provided for this metric is substantial and mistakes do occur far more frequent than you can imagine.