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Company: Pepper Construction Group. General contracting and construction management firms that serves the non-residential and private sector.

Location: Nationwide, with offices in Illinois, Indiana, Ohio, and Texas

Industry: Construction

Employees: 970

Success Brief: Pepper Construction Group's focus on safety in its strategic planning initiative led to an increased emphasis on safety and a drop in workplace injuries and illnesses.


The Challenge:

In 2004, Dave Pepper, the third-generation owner of Pepper Construction, met with his insurance group to review the group's annual summary of safety performance. To his surprise, Pepper Construction's experience modification rate (EMR) placed them in the bottom third of the group. The EMR compares the frequency and severity of workers' compensation claims between companies of similar size operating in the same type of business and reflects the degree to which a particular company's experience is better or worse than the industry as a whole. At the time, Pepper Construction Group's EMR was 0.71, nearly 30% better than the national average for general contractors, but two-thirds of the insurance group members were even better. Safety performance was good, but not good enough.

The Solution:

Pepper Construction had begun to develop a long-range strategic planning initiative. The initial goals set by company leadership were related to business growth - profit, efficiency, information technology and production - but not one mentioned safety. Dave reminded his team that the company's most valuable asset has always been its people and he encouraged them to shift their focus. It was as if a light went on within his management group. They fully embraced the commitment to safety and saw that it would protect the company's greatest asset - their people. The strategic plan shifted and safety became the first priority. Their initial goals remained, but safety was now the foundation on which profit, growth and productivity would be built.

Senior management, along with a newly formed safety committee, developed the TEAM safety mission statement to communicate the company's commitment to an accident free workplace:

  • Training for all employees
  • Empowerment where everyone has the authority to say "no" to unsafe conditions
  • Action - the commitment to taking the steps necessary to protect employees and continuously strive to improve the safety program
  • Motivation - making sure the safety of the company's people is the top priority, above all else

The challenge was to communicate the safety mission through the entire company, from the hourly craftsmen through the executive level. Previous annual safety seminars included every craftsman in the company, often more than 600 people in the same lecture hall listening to lectures and generic training topics. To emphasize their commitment to safety, Dave Pepper and Ken Egidi, President of Pepper Construction Company, held much smaller meetings limited to no more than 40 people. They took the time to shake every employee's hand and made it very clear that everyone had the right, and responsibility, to work safely.

Dave and his team worked hard to ensure all employees knew the company was serious about safety. They put in place additional resources to support this goal. For example, the company hired a new corporate safety director, increased training opportunities and formed trades safety committees.

Pepper Construction now offers safety training in Spanish, including OSHA's Outreach Training Program 10-hour course and first aid training. The company also provides comprehensive safety orientations on every job site. In addition, the company provides safety seminars for the trades. These seminars include up to four hours of training specific to the skills needed by the craftspeople, such as powder-actuated tool use, powered lift training, fall protection and emergency response. Almost 90 percent of current craftspeople have completed the OSHA 30-hour construction safety course.

Pepper Construction has also worked through OSHA's cooperative programs to improve its safety performance. The company is a gold level participant in OSHA Region V's Strategic Partnership with the Builders Association. OSHA and the Builders Association signed their second Strategic Partnership on December 18, 2009. The goals of this Strategic Partnership include reducing injuries, illness and fatalities in construction by addressing key industry hazards, promoting recognition for construction safety excellence and sharing best practices. Gold level participants must meet a number of requirements, including implementation of a comprehensive safety and health management program and maintaining an injury/illness rate at least 10 percent lower than the Bureau of Labor Statistics (BLS) rate for their industry. Pepper Construction is also a participant in the OSHA Challenge Program and is applying for recognition under OSHA's Voluntary Protection Programs (VPP) mobile workforce program.

The Impact:

Since the strategic planning initiative and subsequent restructuring of the safety and health program, Pepper Construction Company has seen a dramatic decrease in OSHA recordable injury and illness rates.

  TCIR* BLS National Average (TCIR) DART** BLS National Average (DART)
2004 5.64 6.1 1.40 3.0
2006 4.64 5.4 1.36 2.7
2008 2.96 4.5 0.7 2.1
2009 2.01 not available 0.5 not available

*TCIR is the Total Case Incident Rate.
**DART is the Days Away, Restricted and/or Transferred Case Incidence Rate.

Based on available data through 2009, Pepper Construction Company is well below the national average for TCIR and DART incidence rate in the construction industry. In addition, Pepper Construction Group's EMR has continued to drop from 0.71 in 2004 to 0.64 in 2009. Currently, the company is in the mid-range of their insurance captive group. 1

When asked about the return on investment, Dave Pepper has said the biggest benefit he has seen is the improved company culture, "Our workers are looking after each other, watching out for hazards and eliminating them - and really caring for their fellow employees." Pepper Construction is committed to building on this success and continuing to improve its safety performance. Management commitment, employee engagement and providing every employee the tools they need to work safely will continue to be the keys to Pepper Construction's workplace safety and health program.

Pepper's improved safety culture has also spread to its subcontractors. When Pepper Construction bids out jobs, it reviews each subcontractor's safety and health records. This includes EMR and OSHA 300A data, job safety performance and the historical safety performance of individual foremen on Pepper projects. All subcontractors are prequalified, and no bids are awarded to subcontractors that do not meet the company's safety performance standards.

As a result of Pepper Construction's increased scrutiny of its subcontractors' safety records, it has removed contractors from its list of prequalified contractors because of poor safety performance. For example, several years ago an iron worker was observed standing on the rail of an aerial lift without proper fall protection. Because the steel erecting company officials did not consider this a serious safety problem, they were removed from the job site and did not work on another Pepper Construction site for four years. After this contractor initiated an intensive safety management program, their performance improved; they are currently applying for reinstatement to Pepper Construction's prequalified contractors list.

Sources:

Paul Flentge, Safety Director, Pepper Construction Company (July 2010)
Developed through the OSHA Alliance Program's Construction Roundtable.


1Insurance captive refers to a self-insured group of companies that pool their resources to limit risk, control costs, and provide superior claim management.