Articles | Cases

Important lessons for employers from recent reports

Comorbidities double Workers' Comp claims costs

The number of Workers' Comp claimants suffering from comorbidities has nearly tripled in recent years and related claim costs are about twice the medical costs of comparable claims, according to a recent study by the National Council on Compensation Insurance, Inc. (NCCI). And while most claims are medical only, about 50% of those with a comorbidity diagnosis are lost-time, While disturbing, the results are not surprising given the percentage of employees who are obese or have chronic health conditions such as diabetes, hypertension, asthma, and so on. The report also had troubling news about claims and drug abuse - from 2000 to 2009 the share of claims with a drug abuse diagnosis, including alcohol and tobacco, more than quadrupled.

The NCCI research brief titled "Comorbidities in Workers Compensation," also reviews a wide range of issues such as the role of gender, the association of comorbidities with injury types, and the increase in medical services necessary when specific comorbidities accompany a claim.

Lessons learned:

There is a link between employee health and profitability. A healthier workforce lowers direct costs such as insurance premiums and Workers' Comp, reduces absenteeism and improved productivity. Wellness initiatives, workplace changes that promote physical activity, good nutrition and smoking cessation are key. While employers do not have access to specific employee health records because of federal privacy laws, proactive employers are tapping aggregate data from insurance companies to better understand the chronic conditions that exist in their workforce, how often employees use expensive emergency services and other cost drivers. With this information they can understand their spending and figure out what health plan design is best for the work force.

Employers implementing wellness initiatives, workplace changes that promote physical activity, good nutrition and smoking cessation have seen a positive ROI. With major changes in the employer health insurance market set to take place in 2014, as part of the Patient Protection and Affordable Care Act (PPACA), the U.S. Department of Health and Human Services on Nov. 20 announced a series of proposed rules under the Patient Protection and Affordable Care Act governing employee wellness programs and essential health benefits for certain employers.

Opportunities to use skills and ability #1 driver of job satisfaction

With the prevailing economic malaise, it's not surprising that job security topped the list from 2008 - 2011 as the most important factor for job satisfaction according to the annual Society for Human Resource Management (SHRM) Employee Job Satisfaction and Engagement survey.

A noteworthy change occurred in the 2012 survey with 'opportunities to use skills and abilities,' now most important and job security in second place. The other three aspects of job satisfaction that made the top five include:

In addition to examining 35 aspects of employee job satisfaction, SHRM researchers explored 34 aspects of employee engagement. On average, the 2012 research reveals that employees were only moderately engaged (3.6, on a scale of 1 to 5, where 1 is highly disengaged, 3 is moderately engaged and 5 is highly engaged)-figures that have not changed since 2011, the first year SHRM started gathering these data.

Lessons learned:

According to a Career Builders survey, 69% of full-time workers regularly search for new jobs. With instant access to so many digital resources, valuable employees can easily become perpetual job seekers. The SHRM report includes commentary from several experts, as well as a few key recommendations for employers:

  • Develop existing employees. Frequently, employees have skills and abilities beyond the position for which they were hired. Organizations should identify such skills and prepare employees to fill higher-level positions, thus opening up positions that require lower skill levels, which might be easier to fill.
  • Communicate about total rewards. Research shows that compensation/pay is very important to employees, yet satisfaction levels are low. Employers should help employees understand how their compensation/pay is determined and communicate frequently to employees what their total rewards package includes.
  • Build a bridge between employees and senior management. Two of the top five contributors to employee job satisfaction were their relationship with immediate supervisor and communication between employees and senior management. Employers can train line managers regularly and involve them in strategy meetings and activities, so they better understand the organization's vision and share it with their direct reports. Line managers can be encouraged to listen to and push employee feedback up to senior management.

BLS: Days away from work

According to the Bureau of Labor Statistics figures, the number and rate of occupational injuries requiring days away from work in 2011 remained statistically unchanged from 2010, continuing a trend of plateauing injury data. However, days away from work increased among private industry workers with less than three months of service (3 percent) and those with three to 11 months of service (7 percent).

Lessons learned:

Workers are at greatest risk of injury during their first year on the job. Proper hiring practices to ensure that new hires are qualified to perform their jobs safely and efficiently as well as thorough training and mentoring are key to controlling this source of injuries. Workers who are returning to their former employers after months or even years off the job, should receive training also and be eased back into their jobs to reduce risk to avoid overexertion and injury.

NCCI finds costs related to aging workforce comparable to younger workers

NCCI reexamined age-related Workers' Compensation issues in the October 2012 research brief entitled "Workers Compensation and the Aging Workforce: Is 35 the New "Older" Worker?"

Key findings are:

Lessons learned:

Misconceptions and myths can lead to erroneous decisions and poor allocation of resources. Using actual frequency and severity data combined with other workforce metrics, such as age, length of service, obesity, lag time etc., to identify key loss drivers will lead to a customized strategy that fits the company's needs. Programs that are implemented to retain older workers and reduce their injuries are likely to benefit workers of all ages.