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The Dual Challenge of Managing Workers’ Comp

A multi-generational workforce presents complex workers' comp exposures for insureds.
By: | March 13, 2017 • 5 min read

America’s workforce is getting older. But it’s also getting younger.

How can that be?

Two parallel trends are driving this seemingly contradictory trend. Workers are delaying retirement and staying at their jobs later in life, while an influx of young, less experienced workers join the ranks.

Each group of this multi-generational mix comes with their own unique challenges. Older workers can have higher rates of illness and chronic health conditions, while younger workers may be healthier but more prone to a workplace injury due to inexperience, said Woody Dwyer, vice president, workers’ compensation for Travelers risk control.

“Many companies may not focus on the risk of increased medical costs associated with younger workers, but they are seeing greater injury frequency and severity due to unskilled or inexperienced workers,” he said. According to Travelers data, in manufacturing, nearly 28 percent of injuries occur within the first year of employment. This jumps significantly to 52 percent in construction. 1

The cost of medical care is also rising.

“While there has been a 50 percent reduction in workers’ compensation injuries over the past 25 years, medical costs will constitute 70 percent of each claim in just a few years,” Dwyer said. Corporations continue to focus on reducing the frequency of workplace injuries, and according to Travelers 2016 Business Risk Index, 59 percent of U.S. business leaders cite medical cost inflation as a top concern.

Managing these costs is critical for long-term success, but focusing solely on the aging workforce provides an incomplete picture of the challenge.

A key way to address the unique risks posed by both older and young workers, while reducing injury and better managing chronic conditions, is to engage employees at every stage of employment from recruitment to retirement.

Engagement at Every Stage

Engaged workers save their employers money not only by being safer, but also by being more productive. A Gallup survey of the American workforce showed that an engaged workforce experiences fewer safety incidents than disengaged employees, with the top quartile of the study experiencing 48 percent fewer safety accidents than the bottom quartile2.

But engagement looks different across the distinct contexts of hiring, onboarding and training, and providing ongoing support for all employees.

“Business leaders should recognize and harness opportunities for engagement in all of these critical points,” Dwyer said.

  1. Attracting and Hiring

Woody Dwyer, 2nd Vice President – Workers’ Compensation, Risk Control

Building engagement begins before a candidate even comes in for an interview. It all starts with the job description.

In addition to detailing a position’s essential functions and physical demands, the description should also outline associated safety measures and protocols. This sends the message up front that a company cares about its employees’ wellbeing and prioritizes safety just as highly as the work being performed.

The job interview itself provides another opportunity. A technique called “behavioral interviewing” shifts the conversation to focus on the candidate’s previous experiences and behaviors in challenging situations. It asks the potential hire to tell stories about themselves and provide examples that illustrate how he or she views safety.

“You can find out what skills and behaviors your candidate exhibits in specific scenarios that indicate how they’ll react and respond to a similar situation on the job,” Dwyer said. “For example, in addition to interviewing them about their knowledge of the job, ask them to describe a specific safety hazard they encountered and what they did. Ask them to describe their decision-making process.”

With detailed job descriptions and behavior-oriented interviewing, companies are more likely to hire candidates who understand the importance of safety and who are likely to stay engaged on the job.

  1. Onboarding and Training

Some of that support comes in the form of effective training, which is equally important for new hires, internal workers switching to a new role, and for injured workers in transitional duty.

“There is a difference between orientation and training,” Dwyer said. Rather than just walking new workers through the motions and instructing them on the use of safety equipment and procedures, trainers and managers should take a more active approach.

“This is another opportunity for engagement, for workers to get ingrained with the safety culture and practice not only their job skills, but also the habit of recognizing risks and responding appropriately,” he added.

New workers are generally most engaged and ready to form long term safety habits during their first six months, but this is also prime time for injury vulnerability as they become accustomed to their new roles and workspaces.

  1. Supporting and Engaging

Reducing employee injuries through strong safety training is one thing, but managing the injured worker’s recovery along with the medical costs associated with chronic, comorbid conditions is another.

According to the Centers for Disease Control and Prevention (CDC), half of all U.S. workers have at least one chronic condition, and the cost of treating these patients is twice as high as for those with no chronic conditions. Wellness programs that promote healthy lifestyles and aid workers in the management of diabetes, high blood pressure and other chronic conditions can help to keep medical costs in check. These programs can also encourage engagement because employees will see that their employer has invested in their wellbeing and taken steps to create a healthy workplace.

A strong post-injury management program can go a long way towards earning employees’ trust and dedication, while also controlling workers’ compensation costs. Taking a sports medicine approach to help injured workers return to work through transitional duty is often critical to shortening recovery time and limiting the life of a claim.

Gain the Advantage

Travelers can help insureds capture these opportunities for engagement with Travelers Workforce AdvantageSM, a model that provides insight into the vulnerabilities of their unique workforces and provides the tools to invest in your greatest asset – people.

“Risk Control tools and resources are scalable to your company needs and workforce size,” Dwyer said. “What it really provides is expertise and a holistic approach to managing workers’ compensation exposures with a unique set of resources to help attract, train and support employees while promoting a culture of safety. We know safe and engaged employees drive strong and productive business, and this is a competitive advantage.”

To learn more about driving employee engagement, visit Travelers at https://www.travelers.com/resources/workplace-safety/index.aspx.

1 Travelers 2014 Study

2 GALLUP, State of the American Workplace, Employee Engagement Insights for U.S. Business Leaders

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This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Travelers. The editorial staff of Risk & Insurance had no role in its preparation.




The Travelers Companies, Inc. (NYSE: TRV) is a leading provider of property casualty insurance for auto, home and business. A component of the Dow Jones Industrial Average, Travelers has approximately 30,000 employees and generated revenues of approximately $28 billion in 2016. For more information, visit www.travelers.com.