An improving job market brings opportunities for employees in the workers’ compensation industry along with challenges for their employers and their employers’ customers. One large third-party administrator is experiencing an “uptick” in employee turnover as the economy gradually improves, the organization’s leader recently discussed at a conference. Other TPA executives tell me their employee retention levels remain flat, but one can reasonably foresee a repeat of the first TPA’s experience as more job opportunities arise.
An improving economy is good for everyone and a worker’s ability to advance into a better job is a positive sign that the economy is functioning as it should, by efficiently allocating resources.
When the economy tanked, for example, a risk manager I have known for years reluctantly returned to a TPA adjuster job following a layoff. Her skills were under-utilized and she wasn’t happy about returning to a role she had held before advancing in her career.
As the economy improved, she landed a risk management position where she is now happier, fully applying her broader knowledge. Her new employer also benefits from her skill set that was under-utilized during the recession.
The catch is that even moderate employee turnover among TPAs is difficult for customers, industry leaders tell me, presenting challenges for customer service continuity.
Clients suffer when a new adjuster assumes a file they are unfamiliar with. Customers like the service consistency delivered by adjusters and other TPA employees familiar with their business practices and claims handling preferences. They want to keep adjusters they have developed solid working relations with.
Losing employees also concerns TPAs because they can see their recruiting and training investments walk out the door.
Consequently, TPA executives are talking more about improving career advancement opportunities for their workers and how they might reshape careers in their industry so they can retain employees. That’s going to mean getting inside people’s heads and understanding their motivations.
There are many reasons people switch jobs, including commute times, salary increases, workplace personnel issues and career advancement.
A founding member of the Disability Management Employer Coalition recently suggested I write a story about the job churn he now sees among the disability insurers, consultants, and employers he has known for years. He thinks the movement is caused by the corporate demands that emerged during the recession, as companies moved to do more with less.
He thinks workers are moving in hopes of a lighter workload. I can’t verify whether his theory about the cause of job changes is correct.
But given his position in the disability management community, I suspect his observation that more professionals are moving on as the business outlook improves is on target.
The labor market has not fully recovered from the Great Recession’s impact. But industry leaders would be wise to look ahead and rethink employee retention strategies.
This is a cyclical challenge TPAs have faced before. Pre-recession, when the economy was booming, employee churn was significant, I’m told. But TPAs won’t be the only ones wrestling with these issues as the economy continues improving.