At the 2022 NCCI Annual Insights Symposium, a session discussed how changes to the labor force are impacting workers’ compensation. The speakers were Len Herk and Carolyn Wise from NCCI.
- In the latest jobs report, there were over two million less people in the workforce compared to pre-pandemic figures from 2019.
- Labor shortages have been universal, but have been concentrated in businesses that laid off workers during the pandemic.
- Labor shortages have led to higher wages and benefits, empowering workers to seek jobs across different sectors and occupations.
- The workplace itself has also been changed. There is more remote work and more short-tenured workers.
- Shares of short-tenured workers are close to 25% across all industries. However, this was a trend emerging before the pandemic. The industries most impacted by the pandemic were leisure & hospitality, retail, and transportation & warehousing.
- Short-tenured workers are more likely to suffer workplace injuries. This varies greatly by industry with the injury rate being almost 300% higher for warehouse workers and over 100% higher in manufacturing and construction.
- Most remote workers are in financial services, information services, and professional & business services. These were primarily office-based roles before the pandemic.
- Share of remote work tripled in 2021 compared to pre-pandemic norms.
- Injury frequency for remote workers is 20% less across all industries. However, there is little data on this as remote work was not as common before the pandemic.
- The aggregate frequency impact is greatly impacted by the industry mix per state. For example, if a state gains significant employment in a high-frequency industry, like warehouse workers, it could lead to increased frequency in the state.
- Aggregate frequency is also impacted by the frequency metric. NCCI measures it compared to premium, so higher premium industries are expected to have more accidents, and thus, that normalizes the frequency rate based on what is expected. Using this metric, having more claims alone does not necessarily mean the frequency rate increases. It depends on the number of claims compared to the premiums.
- The great reshuffle is a unique one-time event which may cause short-term frequency anomalies. It is not likely to impact long-term industry frequency trends.