Analytics have infiltrated every aspect of our lives, for better or for worse. In many cases, it’s just plain confusing. What numbers should you focus on? What’s truly relevant and what is, for lack of a better term, just “fluff”? 

Figuring out what to focus on when assessing the performance of your UI program can be difficult, so it’s important to understand the statistics and analytics that are truly relevant when managing this cost. Why? The two key factors to consider when examining your UI program are: claims and hearings. These two factors are the primary tools an employer has to control their rating experience or direct charges. This post will focus on Claims and how to analyze performance using this measure. In another post I’ll cover hearings. Falling in love with advanced analytics is easy to do but sometimes “Keep It Simple Stupid” is the way to fly, especially when you’re not an unemployment nerd (see: me). One simple but powerful statistic is Disputed Claims Percentage or “DCP”. You can calculate the percentage by simply dividing the Total Claim number, in to the Total Disputed/Protested Claim number. This single metric provides a reliable barometer of your program performance and its ability to limit unwarranted cost. Using a baseball term, it’s your “At-Bat” Opportunity. A higher percentage (> 60%) means your organization is on track, with a goal of >70 for a well-managed program and >80 considered excellent. It’s important to include all separations except Lack of Work (layoffs) or true Poor Job Performance/Poor Job Match (another blog post altogether). Hopefully you’re hitting more than you wiff! This metric helps make sure you’re stepping up to the plate first and not just watching costs escalate unchecked.

Non-unemployment Geek Guidelines:

HIGHER DCP = GOOD! LOWER DCP = BAD!

A lower DCP rate requires a closer look. Certain events such as reductions in force (RIF) or extended furloughs can temporarily skew your stats, as can an unusually low total claim volume in a particular period. But tracking the DCP over time should provide you with important insight on program performance. Unless one of these scenarios is present, a lower or falling DCP indicates you are missing savings opportunities. Take a claim that should be a discharge and surrender it as poor job performance? It’s an easy and automatic claim payment. Worse, take a claim that was not returned timely or without adequate response. You can miss your chance to fight it altogether! Using another sports analogy, that’s an unforced turnover. Like dribbling the ball off your foot! Except that turnover could cost up to $20k. Part-time employees refusing work or swapping shifts are often treated as Lack of Work claims, or simply not responded to at all if an employer’s program is not properly managed. These can all get thrown into the turnover mix too, and although less obvious, they still show up on the stat sheet and can nickel and dime your rate higher. Know what stats count and keep an eye on them! Perhaps your organization or your TPA’s service has a less aggressive stance on protesting claims. Or maybe it became the norm over time and the resulting cost just got your attention. Whatever the case, don’t ignore what may be happening and use the DCP metric as a first step to reliably measure a cost that can quickly escalate without real controls. It can be the catalyst to change, or maybe just the spark that invites a “deeper dive”. With 2014 rates trickling in from the state agencies, there’s no better time than now to see what your numbers are telling you!

The next post in this series will cover the secondary data measure regarding hearings and the common misconception of win percentage.