Using Data to Better Understand and Manage Risk in the Post-Pandemic Workplace
Changing workplace norms are changing the nature of workforce risk – and C-suite executives who understand that employee-focused organizations remain best positioned to thrive during this transformation are shifting attention to human capital management.
Here we explore some of the many ways workforce risk is evolving in the wake of the pandemic and share some examples of how companies are harnessing the power of their data to better understand threats, minimize their exposure and correlate employee well-being with business success.
Employee Turnover and Its Effect on Workplace Well-Being
Since the pandemic, employees reevaluating their options are retiring, resigning and job-hopping at a record pace. Employers pressed to fill positions are pulling from a pool of less experienced workers, adding increased pressure on tenured staff to fill the gap.
The risk from how many employees are new in their role is going to be with us for the next year or so. Regardless of what happens in the economy … this risk is a key one to pay attention to.
-Rich Ives, VP, Workers Compensation Claim at Travelers
In a recent analysis of more than 1.5 million workers compensation claims, Travelers found that first-year employees have the highest claim frequency – and the severity of these claims is on the rise.1
On one hand, this opens up the potential to have many injured workers out concurrently, placing added stress to meet productivity demands on those able to show up and get the job done. For tenured employees, the effect is compounded. Since an increasing number of available workers are new to their jobs, more experienced workers are left to pick up the slack while taking on greater responsibility to train their greener colleagues. In fact, roughly 83% of employees who stayed with their company over the past two years say they have taken on six or more new tasks.2
On the other hand, the mounting pressure employees feel to keep pace with growing consumer demand is affecting their job satisfaction and mental health. As workers struggle to maintain tight production schedules in the midst of pandemic-induced labor shortages and sustained supply chain disruptions, employee retention rates fall, perpetuating a cycle of risk for employees and employers alike.
Managing the risk can be tricky. With a variety of mitigating factors affecting outcomes, high-level analysis may not always paint an accurate picture of where your company’s pain points lie. Digging deeper into the data can unlock insights that will help you deploy more effective strategies to minimize vulnerability in your workforce.
Case Study: A Data-Driven Discovery Drives Results
When pandemic-related supply chain shortages and disruptions began to heavily impact production and profitability, an auto parts company made the tough decision to furlough many of its workers. With fewer hands on deck, the companywide frequency of workplace accidents and injuries decreased as expected. But a closer examination of the data showed certain plants bucking the trend, with significant increases seen at select locations where downsized workforces shouldered the burden of stressful production schedules to meet demand for select customers.
Taking this deeper dive into the data afforded the company a more nuanced understanding of its risk, allowing it to properly allocate resources and refocus mitigation efforts to those facilities where the threat was greatest.
Increasing Impact of Mental Health on Workers Comp Claims
Stressors in and outside of the workplace have always been a factor in workforce wellness. But since the pandemic, levels of anxiety and depression have reached new heights. According to the World Health Organization, there was an alarming 25% increase in the prevalence of anxiety and depression worldwide during the pandemic – a statistic not lost on businesses feeling the impact downstream with higher overall indemnity costs and longer return-to-work times.3
When we think of wellness, we think wellness is multidimensional. And the factors that influence someone’s recovery after a workplace injury really extend beyond merely the physical injury itself.
-Rich Ives, VP, Workers Compensation Claim at Travelers
Psychosocial risk factors – ranging from general anxiety or sleep disorders, to perceived injustice (blaming others or circumstances on one’s current condition), fear avoidance (the belief that physical activity may be harmful to one’s recovery) or pain catastrophizing (thoughts that recovery from one’s pain is not possible) – are having a profound impact on workers compensation outcomes.4
When present, these risk factors can deplete one’s ability to remain resilient in the face of injury, which translates to longer recovery times and increased cost. In fact, Travelers has found that 40% of workers who lose time from work have one or more psychological risk factors, and injured employees with at least one such risk factor have roughly 50% higher indemnity claims.5
Travelers has learned that engaging at-risk employees at the right time in the right way through the claim process can have a positive effect. Using data to identify injured workers with psychosocial risk factors, it qualifies and quantifies interactions with claims management coordinators to help business customers offer more personalized, supportive roads to recovery for injured employees.
Consider This: A Tale of Two Injuries
Two employees suffer the same injury. Your claims management team follows the exact same protocol in managing their cases. One employee recovers and returns to work in eight weeks, while the other remains out of work, in pain, lacking motivation and potentially dependent on medication after six months.
Thinking about it as an equation, you must look at what variable makes these outcomes so different. More and more, that variable is the presence of psychosocial risk factors. It follows then that successful outcomes increasingly rely on your company’s ability to maintain a corporate culture that promotes employee mental health and well-being in the first place, as well as to identify at-risk employees and offer them more individualized support and intervention through the recovery process.
Changing Attitudes About Corporate Culture
A clear distinction has emerged between two types of American workers: those who must be on-site to do their jobs and those who can get their jobs done from home. Both have evolved their expectations of employers in equally distinct ways.
Essential employees called upon to be physically present in the workplace during the pandemic – despite the fact that there was so little known about COVID-19 and protections like therapeutics and vaccines were not yet available – provide valuable insight into what gets people motivated to show up and do their best work. Turns out that it’s really a matter of perception and pay.
Workers are more likely to put in the time and effort it takes to do their jobs well when they feel safe and supported in their working environment. Since the onset of the pandemic, there has been a huge uptick in employee activism – with a 57% increase in union petitions between October 2021 and March 2022.6
In return for the services they provide, post-pandemic workers want higher wages and better benefits. In-person and remote employees alike are demanding more pay, more time off, more sick leave and more flexibility than ever before.
All this adds up to increasing expectations for employers to take a holistic approach to workplace safety and employee wellness.
Leaders sometimes need to be convinced that valuing employees can also be valuable to their business’s bottom line – and the burden of proof increasingly falls to risk managers. Smart data analysis leads to smart risk management, and Travelers provides the innovative tools and industry-leading expertise you need to get the job done.
Case Study: The Proof Is in the Data
A risk consultant reviewing data from a retail customer noticed a significant reduction in the frequency and severity of workers compensation claims through the pandemic. This seemed odd since the retailer was considered to be an essential business and had a history of high attorney involvement rates. Turns out that just before the pandemic, the company had reprioritized employee engagement through the claim journey, focusing on early reporting and post-injury management. With new protocols in place, the retailer saw and was able to maintain decreases in attorney involvement as well as the overall severity of claims, just as the numbers had shown.
Travelers continually harnesses data to better understand trends and follows credible outside sources to stay ahead of emerging risks. Partnering with customers to leverage the growing ecosystem of available data sources helps manage risk more effectively. Aligning claim analysis and cost reduction initiatives with strategic goals while providing data-driven insights to support organizational and operational changes helps improve outcomes.
To learn more about how we can help optimize your claim outcomes, contact the Travelers representative in your region.
Sources
1 2022 Travelers Injury Impact Report
2 Job Hoppers Leave Extra Work Behind, May 2022, LinkedIn
3 World Health Organization
4 Travelers Webinar, "Your Greatest Asset: Smart Risk Management in the Age of Workforce Transformation"
5 Travelers Lost Time Claims Data, 2022
6 U.S. National Labor Relations Board
