Sure, you pay attention to the financial stability of your company and your key vendors and suppliers. That's a part of risk management. How about the financial stability of your workforce? Career Builder recently surveyed some 5,000 HR managers and full time employees across a wide swath of American industry. What they found is disturbing.
Of the 3,000 full time employees surveyed, some 78% live paycheck to paycheck. That's up from 75% in the previous survey, just last year. Additionally, 71% (up from 68%) are in debt and over half of those, 56%, reported that they were "in over their heads." Why care? The great American middle class, the people who make up the core of most enterprises, is sinking economically as stagnant incomes fail to keep up with even the mild inflation of recent years.
In practical terms, this means more and more full time employees taking whatever side gigs they can find, like driving for Uber or Lyft on weekends or evenings. It means people who don't feel well dragging themselves into work. It means employees who are unhappy in their current positions clinging to their jobs like depressed limpets on a rock. A major Pew Research Center study (profiled in the Washington Post) shows the middle class shrinking in almost every metro area surveyed.
A struggling workforce is a serious risk factor. It's a workforce of people who may not respond well when injured on the job, who may be distracted or half asleep when driving or operating machinery or trying to solve tricky problems for clients. Absence and productivity management become more difficult.
What to do? Make common cause with your colleagues in HR and benefits. Leverage your EAP, if you have one. Consider financial counselling as a part of employee wellness. Get creative in your approaches to loss engineering through more acute human factors analysis. Your people are not an infinite, readily renewable resource and many of them barely have their heads above water. This calls for your best risk thinking - and it may well have the best payoff going forward.
Fraud Fallout from Harvey, Irma, et al
By now, we are all familiar with the dreary run of fraud stories that already stud the aftermath of hurricanes Harvey and Irma. According to the US Attorney for the Middle District of Louisiana, over 30,000 fraud complaints were generated by Katrina back in 2005 and they are still trickling in today. We think that hurricane related fraud is something local in Texas or Florida or Louisiana, but it's not.
PropertyCasualty360.com recently ran an excellent article looking at all types of storm related fraud and a few of the pointers offered apply to risk managers sitting comfortably at their desks far from the mud and muck left by wind and water as well as to the folks whose homes are now soggy shells. For example:
- Hurricane season is phishing season - new phishing scams are designed to look like chartable appeals for hurricane aid. People are a bit less wary when their heartstrings are being tugged. Time to up your game against all types of phishing.
- Bad claims drive out good - your carrier or TPA may be buried in phony or inflated claims. Time to up your game in terms of claim documentation as well. Help your adjusters by making any new claims as "clean" as feasible.
- Document everything - fraudsters will be inflating the value of everything they claim for property damage or business interruption, so have all of your ducks lined up and documented to show that your inventories and valuations are crisp and correct.
- Beware the public adjuster - you're probably too savvy to be taken on this trip, but how about your local or regional managers who are trying to help move things along by bringing in a PA?
- Be hyper-careful about used anything - again, you wouldn't fall for a deal on some "lightly used" vehicles or other equipment recently dredged up from a hurricane lake, but have you properly alerted all of your local managers who buy equipment, even occasionally, and might be tempted? Remember that the flood damaged cars and trucks that fraudsters clean up after they've been totaled are usually moved well away from the place where the damage occurred.
The bigger the disaster, the further the ripples of subsequent fraud reach out. Don't get caught napping in Maine because the storm hammered Florida.
The Last Claim
A major study by the NCCI (National Council on Compensation Insurance) several years ago showed that, as employees age, their workers' comp claim trend down in frequency but up in severity. Older injured workers take longer to recover and to get to RTW, if indeed, they do. Now we have a new study published in The Insurance Journal that shows that older workers are also more likely to die in on the job accidents.
The US government estimates that by 2024 fully 25% of the workforce will be older employees as the legacy retirement age of 65 means less and less and more people keep working into their 70s. In 2015 35% of fatal workplace accidents involved employees older than 55. For the most recent ten years, according to Bureau of Labor Statistics numbers, the rate of fatal accidents for older employees has been running at twice the rate as their younger colleagues.
Clearly, this situation presents a challenge to safety departments and loss reduction plans in every industry. Older employees sometimes have vision, hearing and balance challenges which make them less able to cope with poorly maintained walkways or under-illuminated workplaces or other types of poor industrial hygiene. The fastest growing types of fatal accidents for this group were:
• Slip, trip and fall
• Contact with objects
• Transportation accidents
The National Center for Productive Aging and Work recently announced a program to focus on making the workplace safer for older workers. The program often involves such complicated and expensive accommodations as replacing 60 watt light bulbs with 75 watt bulbs. Does your safety plan consider the needs of your older employees? Do you track accidents by employee age as well as other variables? Do you consider age appropriateness when planning workplace safety training? Consider, for example, that older drivers tend to have different types of accidents than younger drivers. Often, older workers learn better from safety instructors of their own age and experience. These little things can mean the difference between "that was close" and "call 911, now!"
Which would you rather attend - a retirement party or a funeral?