There is a great deal of fear and uncertainty in today’s workforce. A recent Associated Press poll showed that more than half of respondents believed they will have to work longer than anticipated due to the devaluation of their retirement savings by the recent financial crisis. Add the specter of looming layoffs to the mix, and you have a workforce that is seriously demoralized and downright angry.
What does this mean for risk managers? Here are a few of the implications of today’s fiscal uncertainty.
- Human resources experts are noting unease and anger in their workforces. As the presidential election edges closer, political talk in the workplace, once shunned, is heating up. According to a recent article in the Seattle Post Intelligencer, “Companies’ current ’emotional fields’ are loaded with anger, anxiety and stress.” Unfortunately, business experts warn that these emotions are catching, so any steps managers take to deescalate the emotions may pay dividends. If your company has an employee assistance program, contact them for suggestions. Many times allowing employees to vent even quickly will allow employees to return to their tasks more productively.
- Layoffs may be inevitable, and with layoffs go employment claims. If you carry employment practices insurance, your insurance carrier may be able to help you better plan any anticipated downsizing to avoid employment claims.
- Absenteeism may increase due to stress-related ills or financial problems. Conversely, employees who are ill may be too worried about pending layoffs to take a sick day, so ailing employees reporting to work can spread colds and flu bugs throughout your organization. Encourage employees to obtain flu shots and send the message that sick employees should stay home, recession or no recession.
- Workers on the verge of retirement are deciding they will postpone their retirement. This may impact claims frequency (how often claims occur) and claim severity (the cost once they do occur). Older workers are injured less frequently, but once hurt, their injuries are generally more severe because older workers take longer to heal. While overall claims frequency may decline, expect an increase in claims severity, which can drastically impact your organization’s workers’ compensation premiums. Age-proof your workplace by improving lighting, eliminating slip hazards and providing ergonomic equipment.
- Watch for increased intergenerational conflict. If baby boomers postpone retirement, younger workforce members who had hoped for promotional opportunities as a result of this exodus may feel stymied in their careers. Human resource professionals should be vigilant about any backlash to avoid age discrimination and other claims.
- On the bright side, employees who were recently asking for more flexible work schedules, better benefits packages and pay raises are quickly backing away from their demands, according to a June 2008 poll (PDF) conducted by Randstad USA. According to this poll, the steepest expectation declines occurred in Gen Xs and Ys.
As the financial whirlwind continues, we should monitor our workforce daily to determine its pulse. Ignoring mounting tensions will not make them go away. In a perfect world, employees check their emotions at the door each morning when they arrive at work. Our workforce is far from perfect, so to ensure your organization continues to function during this difficult time, open communication is the key. As human resource experts are finding, issues like finances and politics previously taboo in the workplace are becoming topics du jour and can seriously damage employee morale if left unchecked.