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The 5 Steps to Successful Risk Management in Hotels

hotel risk management

Risk management is a significant part of being a responsible hotel management company. Because we deal with people, there will always be risk. In order to be effective in Risk Management we put an operational system in place with internal controls to manage the known and unknown risks. Our focus is on mitigating the risk by putting safety procedures in place, providing a safe environment to work in and continual training. In the event there is an on-the-job injury, the corporate office works with the team member, the insurance company and the medical facility from the time of the incident to the closing of the report. Attention to the smallest details greatly impacts not only the cost of the one particular incident, but the worker’s compensation insurance rates paid by that property for years to come.


Reporting Injuries
Often team members are hesitant to report an injury when it occurs. Either they don’t think it is significant, they are worried about losing hours or they may be afraid of imagined negative consequences from reporting it. Teams must feel comfortable enough with management to come to them with everything from a cut that will only need a band aid to a significant fall. Some injuries are not immediately reported because the decision is made to wait and “see if it gets better”. This could be a costly decision for the employee and the hotel. Back, shoulder and neck injuries from improper lifting or a fall used to be met with the “wait and see” attitude, but proactive human resources departments know that attitude is a ticking time bomb. The longer these types of injuries are ignored and medical treatment is delayed, can have long term consequences like:


  • longer the recovery time
  • more time off from work
  • property may be short of staff
  • a more expensive overall claim can result 
Establishing and identifying incidents immediately can significantly reduce all of these concerns.


When an injured team member immediately goes to urgent care or the local emergency room, the hotel is taking the first proactive step in making sure the staff member is adequately cared for and managing the cost of the incident. Such timely reporting benefits both the hotel and the employee in the long run.
Often a human resources department will ensure the injured team member will go to their initial appointment, report the incident to their insurance company and then just wait out the recovery process. Some HR departments allow the insurance company to handle the entire situation from start to finish. This is not an effective way to manage a claim. We work in conjunction with the employee and their doctors, physical therapists and other medical professionals to ensure that follow up appointments are scheduled and attended. This is essential to complete recovery and reducing the long term costs of an injury. By having human resources in communication with all providers, we effectively coordinate the process to assist the team member with getting better and back to work quicker and close the claim earlier. Coordinating this ensures that all available actions are being taken by either the team member or the medical facility and there is minimal delay in the procedure. By doing this we have found it significantly reduces the time an associate is out of work and the final claim results in lower financial impact.


Managing risk also includes working with medical professionals to verify when the treatment is complete and the employee is cleared to return to work. While paperwork from state agencies and medical offices can sometimes be delayed, PHD is in communication via phone or email with these facilities which often speeds up the return to work process. Most staff members are anxious to get back to work and don’t want to be out any more than necessary, but there may be times when a team member may not be in agreement as to the conclusion of his/her treatment. Frequent communication with them and their doctors will let them know that their employer is concerned for their well being and is looking forward to their return to work. It also keeps the lines of communication open for those staff members that may try to come back to work too early, and impede their healing progress.


Identifying Cause and Prevention
In order to avoid future incidents, lessons must be learned from each accident on property. The injury is investigated, witness statements are taken and a fact analysis is completed to make sure any contributing factor to the accident is handled immediately. This could be retraining, fixing unsafe equipment, a team member that possibly followed an unsafe practice or even horseplay on the job. Each incident is analyzed and corrective action is taken to ensure that the root cause of the accident is taken care of. Just because a landscaper fell off a ladder outside, doesn’t mean the lessons learned from that can’t be transferred over to safe practices for housekeeping, engineering or even front desk staff. By discussing the incidents during the monthly safety meeting with each hotel, PHD is able to review the facts with the properties and often the team has great insight into how to perform the same task with more of an eye for safety. The safety meetings encourage all of our hotels to share ideas on safer practices – forging more of a team bond.

Human Resources effectively manages injuries, no matter how minor and by doing this we are able to decrease property incidents and mitigate worker’s compensation claims. The overall effect is that we are able to better manage overall costs of each injury and ensure the health and safety of our staff. If you’d like to learn more about how PHD Hospitality can help your hotel’s risk management situation, please email or call Becky Nation, Director of Human Resources at (602) 714-2443.