Increase in Resignation Rate by Tenure

Norms in workers’ compensation have changed due to the pandemic. Payers are grappling with what is next after being in emergency mode and asking what lessons have been learned from the pandemic that should be adopted going forward. This includes whether claims for a contagious disease like COVID are work-related. According to a recent article which references legislative analyses by NCCI, in 2020 and 2021, 18 states established COVID-19 presumptions via legislation, directives, emergency rules, and/or executive orders to address how COVID claims are handled in workers’ compensation.

The pandemic also saw many employees changing jobs with a majority shifting to remote work either some or all the time. Prior to 2020 less than 10% of the professional workforce worked from home all or most of the time, and while some experts put remote work at more than 70% during the peak of the pandemic, in 2022 it seemed to normalize around 60% working from home.

With so many employees operating from home, the pandemic also created additional questions about where the line is between a work environment and a home environment when they are one in the same, and what kind of workers’ comp liability stems from it. These cases bring up discussions surrounding employer liability when an employer isn’t directly controlling the work environment, and states are being forced to address this to mitigate litigation that could spiral out of control, flooding courts with arguments over what is and isn’t compensable when working from home.

The move to remote work also brought unanticipated changes to how employees balance life and work. With shorter commutes and more flexibility, the collective shift has substantially changed how individuals think about wellness, how our teams connect, and how collaborative work gets done. For the most part, business leaders have largely moved on from debating the productivity of remote employees, and instead are concerned with how to cultivate culture and connection, maintain health and wellness, and ensure a positive employee experience in a distributed workforce. Culture and connection may be the impetus for where the work experience is headed next.

WHAT WILL 2023 BRING?

According to a report by Resume Builder, 2023 may be altogether different — again. In their recent study of 1,000 companies, 90% said they will require employees to return to the office at least partially this year. A fifth of them saying they will terminate those who do not. This study also indicates that hybrid work policies will change in 2023. While less than 20% said they will require employees to work in the office full time, 40% said they will require employees to come to the office four days a week. This return to the office could continue to fuel what has been called the Great Resignation.

Much of the Great Resignation pandemic activity seems to be attributed to wage stagnation, cost of living increases, remotework policies, and more, that continue to drive record numbers of employees to leave their jobs. While many believe the trend is mostly attributable to those new in careers, there is also evidence that many tenured employees are following suit. One study, by people analytics company Viser, cited that the greater the tenure the greater the rate of resignation. This trend is concerning on many levels, but mostly related to the loss of knowledge associated with these seasoned employees. Many employers will have to deal with how to effectively train newcomers when those with historical knowledge are departing at higher rates.

However, resignations aren’t the only concern in the greater workforce, as well as specifically the insurance industry, the aging workforce further exacerbates things. For example, the U.S. Bureau of Labor Statistics estimates that 50% of the insurance workforce will retire in the next 15 years leading to more than 400,000 open positions. Th is is increasingly concerning for the workers’ compensation industry where hiring skilled labor has already been a major issue — especially in terms of finding experienced claim adjusters. Prior to the start of the pandemic, the industry was already experiencing high turnover due to an aging and retiring adjuster population.

These two factors, resignations and retirements, may push insurance organizations to act faster when considering new ways of doing things. This may mean new software and automation strategies, or even outsourcing certain functions that no longer make sense to retain.

CHANGING BUSINESS MODELS ADAPT TO THE “NEW NORMAL”

An example of business transformation can be seen when looking at the claims management process. From the time the individual is injured to their recovery and return-to-work, there are numerous steps in the claims management process ripe for streamlining and improvement. Some of the more obvious tasks are in the end-to-end process from first report of injury through bill payment.

In today’s workers’ compensation environment, regardless of the payer (carrier, Third-Party