Ep. 625 Hiring as a Risk Strategy: Controlling Insurance Costs in Construction

Rancho Mesa's Alyssa Burley sits down with Account Executive Kyle Dunlap to talk about hiring employees as a risk strategy.

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Director/Host: ⁠⁠Alyssa Burley⁠⁠

Guest: Kyle Dunlap

Producer/Editor: Megan Lockhart

Music: "Home" by JHS Pedals, “Breaking News Intro” by nem0production

© Copyright 2026. Rancho Mesa Insurance Services, Inc. All rights reserved.

Transcript

Alyssa Burley: You’re listening to Rancho Mesa’s StudioOne™ podcast, where each week we break down complex insurance and safety topics to help your business thrive.

I’m your host, Alyssa Burley, and I’m joined by Kyle Dunlap, Account Executive with Rancho Mesa. Today, we’re going to talk about hiring employees as a risk strategy.

Kyle, welcome to the show.

Kyle Dunlap: Thanks for having me really look forward to discussing this topic.

AB: We’re glad you’re here. In a recent article, you wrote about how construction companies can use a proactive hiring approach to help control their insurance costs. Why do you believe this approach is critical for contractors that are scaling quickly after winning large projects, and what are the biggest risks of taking a reactive approach?

KD:  Great question! I’ll start with the biggest risk, a reactive approach is bringing on employees who aren't properly vetted or don't have the necessary skills and safety mindset for the job. In the construction and electrical industry, that can quickly lead to, more injuries, near misses, lower productivity, increased rework, project delays, and even higher workers' compensation claims        

The insurance impact can be long-lasting. A few preventable claims from inexperienced employees can increase a company's Experience modification rating or (EMR) for short, which may result in higher workers' compensation premiums for years to come. At the end of the day, hiring is more than filling jobs. it's one of the most important risk management decisions made. A contractor who scale successfully are the ones that grow their workforce with the same discipline they use to manage safety and operations. A proactive hiring approach is critical for contractors that are growing quickly because the pressure to fill positions can easily outweigh the pressure to hire the right people.

When a contractor lands a large project, there's often an immediate swell, putting more workers in the field. Companies that have already built recruiting pipelines and relationships within trade schools, and referral networks can scale much more effectively. They're choosing from qualified candidates instead of hiring out of desperation

AB: Yeah absolutely, how do structured hiring, safety-focused screening, and disciplined onboarding help contractors reduce workplace injuries, protect their experience modification rate or like you mentioned EMR, and control long-term insurance costs?

KD: All 3 of those strategies really go hand in hand working together to reduce risk before an employee ever steps onto a jobsite. Structured hiring helps contractors identify candidates who have the right skill set and experience before they perform the work. When employees are properly qualified, they're less likely to make mistakes that can lead to injuries, property damage, or costly rework. Having the mindset, would you give a new hire the keys to the castle on the first day? The goal isn’t micromanaging. Its making sure someone doesn’t ruin everything you’ve built over the course of many years.

Safety-focused screening takes it a step further by evaluating a candidate's attitude toward safety, accountability, and following procedures. The best contractors don't just hire for technical ability, they hire people who understand that safety is part of the job. Disciplined onboarding is where those expectations are reinforced.  New employees should receive clear training on everything from company policies, reporting procedures, and specific jobsite hazards. This is especially important because many workplace injuries occur during an employee's first few months on the job. The impact on a contractor's EMR can be significant. Fewer injuries generally mean fewer workers' compensation claims,  and fewer claims often lead to a more favorable EMR over time. A strong EMR not only helps control workers' compensation costs but can also improve a contractor's ability to qualify for larger projects and win bids.

Ultimately, the contractors that consistently outperform their peers understand that hiring is more than a staffing function, it's a risk management strategy. By bringing in qualified employees, screening for safety, and providing structured onboarding, they create a safer workforce, protect their EMR, and position themselves for more stable insurance costs in the years ahead.

AB: Right, and you emphasize that hiring should be treated as a strategic business function. What are some key metrics and workforce strategies that best-in-class contractors use to improve safety, retention, profitability, and overall project performance?

KD: The best contractors don't look at hiring as an HR function, they look at it as a business strategy. Instead of just tracking how many people they hire, they focus on metrics that tell them whether they're building a safer and more productive workforce. Traits like employee retention, first-year turnover, injury rates for new hires, workers' comp claim frequency, EMR/X-Mod trends, and time-to-fill open positions More often than not these traits are all connected. For example, a company that has high turnover rates is constantly bringing in new employees. New employees are typically at greater risk for injuries, which can lead to more workers' compensation claims and eventually a higher EMR. That impacts insurance costs and profitability.

The best contractors also invest heavily in workforce development. They build recruiting pipelines through trade schools, apprenticeship programs, and employee referrals rather than waiting until they desperately need help. They also create clear career paths so employees can see opportunities to grow within the organization. From a safety standpoint, they don't just measure accidents. Another best in class trait would be tracking leading indicators like training participation, near misses, and supervisor involvement. The goal is to identify problems before they become claims. At the end of the day, the most successful contractors understand that a stable, experienced workforce is usually a safer and more productive workforce.  The goal is fewer claims, stronger project performance, lower insurance costs, and ultimately better profits.

AB: Yeah, absolutely and we just recently did a podcast episode with Sam Clayton where he talked about near misses being an opportunity to make sure that we're trying to prevent those claims from actually happening. So Kyle, if listeners have questions about their hiring practices and how they can be used as a risk strategy, what’s the best way to get in touch with you?

KD: You can contact me on LinkedIn or my office phone, (619) 798-2822 or by email kdunlap@ranchomesa.com.

AB: Well Kyle, thanks for joining me in StudioOne™.

KD: Alyssa, thank you for everything you do here. Really appreciate the invite.

AB: Thanks, Thank you for tuning in to our latest episode produced by StudioOne™. If you enjoyed what you heard, please share this episode and subscribe. For more insights like this, visit us at RanchoMesa.com and subscribe to our weekly newsletter.