Managing an aging workforce: the impact on Workers’ Compensation
Many business owners and managers today will tell you that one of the most pressing problems they have is finding qualified, competent employees. As more Baby Boomers prepare for retirement, there is reason to believe that this problem will only worsen.
Over the next decade, the 55 – 64 age group will grow at a rate four times the rate of the total work force and the 65 and older group will grow seven times as fast according to the white paper “Safety & Health Implications of an Aging Workforce” by Glenn D. Daviet. Some employers fear that the unprecedented increase in the number of aging workers will lead to more serious injuries and illnesses and higher workers’ compensation costs.
Yet, the need for experienced, dedicated, skilled workers and the possibilities of rising Workers’ Compensation costs do not have to become a catch-22 for the employer.
The practical and proven processes of controlling Workers’ Compensation costs – 24 hour injury response, claim coordinator program, back-on-the-job program, supervisor training, medical clinic relationships, independent nurse, workplace wellness programs and on-going training – will have the same positive effect on older workers as on younger workers.
A December 2006 research brief by the National Council on Compensation Insurance provides valuable insights for employers. The key findings show:
1. Younger workers (20 – 44) have a higher incidence of workplace injuries and illnesses than older workers (45 – 64), while older workers have higher costs per claim. However, the difference in number or frequency of claims between young and older workers is declining and age may not play an important role for frequency trends in the future.
2. Differences in wages and claim durations accounted for the majority of the difference in indemnity severities between younger and older workers
3. Older workers experience relatively higher-cost injuries, where the most notable differences in diagnoses involve injuries to the joints – rotator cuff and knees – which were more commonly experienced by workers aged 45 – 64 and sprains of the ankle which were more commonly experienced by workers aged 20 – 34.
4. Carpal tunnel syndrome and injuries to the lower back are among the top ten diagnoses for workers of all ages.
5. The key driver explaining about 70% of the difference in medical severities between younger and older workers is the markedly higher number and different treatments within a diagnosis. For example the older worker has 90% more treatments than the younger worker for a sprain of shoulder or arm injury. Over all diagnoses, the older worker received 43% more treatments on average than the younger worker.
6. There is very little difference in the frequency and severity levels of the 45 – 54 and 54 – 64 age groups.
These facts lead to several significant conclusions when it comes to the older worker:
• On the plus side, older workers can bring a wealth of experience that adds value to the job, have a strong work ethic and a better than average attendance record. They appreciate having a job and demonstrate job satisfaction.
• Offsetting these positive qualities is the fact that older workers tend to have diminished cognitive capabilities and higher than average costs of job-related injuries.
What do these conflicting conclusions mean to an employer? Is it in a company’s best interest not to hire or retain older employees to avoid higher job-related injury costs? Or are these additional expenses the price paid for having experienced, satisfied employees?
This does not need to be an either-or decision. The key is having a system in place that enables employees to obtain the appropriate medical treatment from a physician who practices occupational medicine and who is committed to a recovery-at-work approach. Since the primary difference between younger and older workers is essentially the number of treatments, proper medical care and a return-to-work program can help reduce that disparity and the costs involved.
With this approach, companies can benefit from the rich legacy the older employee can bring to the job and control Workers’ Comp costs at the same time.