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The topic of an aging workforce is becoming more and more discussed amongst business owners, insurance companies and healthcare providers. The topic affects many areas of a business, but its impact is more commonly evaluated in workers’ compensation insurance, employee safety and health insurance.

By: John Schumacher, Senior Vice President, Assurance

Many articles have cited statistics on this topic. Common sources include the Bureau of Labor Statistic (BLS), National Institute for Occupational Safety & Health (NIOSH), Centers for Disease Control (CDC) and others.

The Stats:

The age of our workforce has shifted to include more older employees. According to the Bureau of Labor Statistics, in 1994, the median age of U.S. employees was 37 years old. The age increased to 40 years old by 2004 and to 41 years old by 2014. By 2024, the median age of U.S. workers is expected to be 42 years old.

Between 2004 and 2014, the number of Americans at least 55 years old who were still active in the civilian labor force ballooned by 47 percent, according to the BLS. That number is expected to grow nearly 20 percent over the next 10 years. By 2020, it is expected that 25 percent of the workforce will be 55 or older.

Employees are staying active in the workforce longer for many reasons including greater longevity because of improvements in health and medical care, financial issues stemming from the economic recession and a general desire to remain productive later in life.

The Issues:

The benefits of a workforce inclusive of 50+ year old employees range from practical work experience and mentorship opportunities to leadership abilities and typically a strong work ethic. Non-physical jobs may not show significant increase in risk for older employees. However, job tasks that are more physical in nature may create increased potential for injury. Some of the most common injury types for older employees include slip/falls, strain/sprain injuries and motor vehicle crashes.

Statistically, older employees have fewer workers’ compensation injuries on the job. However, those injuries tend to be more severe and the recovery time is longer. In fact, the CDC and BLS indicate that workers 55 and older experiencing a lost time injury have an average of 12 lost work days – almost twice the amount of workers aged 20-24. This of course increases indemnity, medical and indirect costs to the business owner.

Factors contributing to this include morbidity factors. Morbidity factors having most obvious impact include obesity and diabetes. Obesity and related issues can greatly increase the potential for injuries related to slip/falls and strains. Diabetes can also significantly extend recovery time and responses to medical treatments. The prevalence of co-morbidities (two or more diseases/illnesses occurring at the same time with an individual) increase with age. Co-morbidities of obesity or diabetes are not uncommon and greatly increase complexity of injuries and drive up cost.

Strategies to Consider:

There is no single solution or silver bullet for this issue. The issues are complex and require an approach that considers a variety of disciplines and resources. Here are five common strategies to consider:

  1. Formalized Safety Programs – Continued attention on safety management is key, along with an increased focus on behavior based safety training. Safety management programs within an organization will reduce potential for injuries. Behavior based safety programs go beyond managing physical conditions and address employee attitudes and motivations.
  2. Focus on Ergonomics – A basic premise of managing risk includes eliminating or reducing the risk through engineering controls. Work stations that fit the employee’s ergonomic abilities decrease the risk of injury. Mechanical lifting devices and automation are two of many approaches. Work tasks with difficult ergonomic characteristics may employ job rotation as a method of reducing exposure.
  3. Strategic Employee Job Placement – An employee’s ability to safely perform work duties will change over time. Utilization of Functional Job Analysis and employee pre-work screenings are typically outsourced to a third party. Results from these evaluations may point to the reassignment of job tasks for employees.
  4. Integrated Employee Wellness Programs – A growing focus of many employers is wellness programs and how these can be combined effectively with safety programs to minimize risk and maximize the health of your workforce. Key elements include biometric testing to identify health risk factors and addressing those through strategic education and congruent initiatives on both the wellness and safety side.
  5. Financial Wellness Education – This aspect may seem to be somewhat unrelated to the previous strategies. However, financial wellness often impacts employees’ stress levels and influences how late in life employees need to work. Many areas can be addressed including retirement saving, budgeting, investing and related topics.

The topic of an aging workforce is a very broad subject influenced by many factors. To effectively address the issue, advisors from a variety of disciplines are needed and may include property & casualty and health insurance brokers, financial advisors, safety & health professionals and Human Resources professionals, among others. Successful companies will embrace the challenges and avail themselves to the expertise that is available.

About John Schumacher:
John Schumacher is a Senior Vice President at Assurance. He focuses on insurance placement and risk improvement for manufacturing, recycling and environmental engineering businesses. In addition, he’s a Certified Safety Professional as well as a Commercial Lines Coverage Specialist (CLCS). With over 25 years of experience, John’s primary responsibility to his clients is to understand their business operations and help them create strategies for impacting their total cost of risk in both P&C and employee benefits. John graduated from Illinois State University with a Bachelor of Science degree in Occupational Safety. John can be reached at jschumacher@assuranceagency.com.

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