How the Great Resignation Impacts Workers' Compensation

WorkCompAcamedy.com - The workforce is transforming with millions leaving their jobs in the Great Resignation (also known as the Big Quit or the Great Reshuffle). And according to a report by Healthesystems.com, this has created a cascade of ripple effects, some of which bear considerations for the workers’ compensation industry.

The term "Great Resignation" was coined by Anthony Klotz, a professor of management at University College London's School of Management, in May 2021, when he predicted a sustained mass exodus.

It is an ongoing economic trend in which employees have voluntarily resigned from their jobs en masse, beginning in early 2021. Possible causes include wage stagnation amid rising cost of living, long-lasting job dissatisfaction, safety concerns of the COVID-19 pandemic, and the desire to work for companies with better remote-working policies. Some economists have described the Great Resignation as akin to a general strike.

According to a PricewaterhouseCoopers survey conducted in early August 2021, 65% of employees said they were looking for a new job and 88% of executives said their company was experiencing higher turnover than normal. A Deloitte study published in Fortune magazine in October 2021 found that among Fortune 1000 companies, 73% of CEOs anticipated the work shortage would disrupt their businesses over the next 12 months, 57% believed attracting talent is among their company's biggest challenges, and 35% already expanded benefits to bolster employee retention.

Even before the pandemic, the workers’ comp industry faced an impending talent shortage and now that problem has grown worse. Two of the hardest-hit roles happen to be two of the most crucial roles at claims organizations: claims adjusters and IT specialists.

Based on results from Healthesystems’ 2022 Workers’ Compensation Industry Insights Report, workers’ comp professionals now view the changing workforce/workplace as the number one factor impacting resiliency in workers’ comp, with 71% of workers’ comp professionals ranking the changing workforce as their top industry concern.

While there are some universal solutions a workplace can offer to attract and maintain employees - such as competitive compensation and benefits - there are industry-specific matters that workers’ comp must address.

According to the Report, many adjusters are reaching retirement age and there is a shortage of new talent entering the industry. The high level of stress associated with the role, outdated claims technology, and a lack of overall industry appeal to young professionals are all contributors.

Creating a clear career path and a picture of the unique expertise that can be gained from the workers’ comp industry - expertise that can be leveraged later in either a different industry or in a higher position - could be beneficial for attracting new talent to an industry that is not necessarily an obvious or sought-after career option for college graduates.

Additionally, younger workers have high expectations for the user experience of technology, and workers’ comp has historically lagged behind the consumer experience. Technology should be intuitive, easy to use, and should empower day-to-day decisions to reduce burden and the perceived complexity that comes with the insurance industry.

There is a larger lack of IT talent that is holding back overall technological growth across all industries - and workers’ comp is no exception. The current shortage of IT talent is the main factor holding back IT automation and half of digital workplace technologies in the works. With more and more companies offering remote work for technology positions, competition is fierce for these talented individuals.

Claims organizations can prioritize cloud and security technologies to allow for remote work when possible to entice IT workers. Claims organizations can also leverage partners and/or programs that already have the technological infrastructure in place to help them achieve connectivity goals within their workers' comp medical management programs.

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