The document discusses the risks associated with labor shortages across various industries, detailing how overworked and underqualified employees can lead to increased workplace accidents and project delays. Specific sectors such as construction, manufacturing, and trucking face significant challenges, including elevated accident rates and heightened liability risks due to the availability of skilled labor. To mitigate these risks, the document emphasizes the importance of effective onboarding, regular training, and open communication within teams.

1. S T R A T E G I E S
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Article reprinted from Spring 2022
Risk Management
Common Labor Shortage Risks & Tips to
Mitigate Your Exposures
E
very industry is at risk for liability exposures from
widespread labor shortages. Employers are often forced
to schedule fewer staff members, overwork current
employees and hire less skilled applicants. Exhausted and
underqualified workers can increase the risk of workplace
accidents as they’re more likely to cut safety corners or make
careless errors. These incidents could lead to major liability
concerns from employee and customer injuries.
Additionally, overworked and inexperienced employees
are more likely to miss important project deadlines. Service
delays could cause customers to become disgruntled and
increase liability problems. Further, staff shortages may
influence your business’ ability to maintain workplace security
and potentially result in property and inventory vulnerabilities.
Influential Industry Risks
Construction — The U.S. Chamber of Commerce’s
Commercial Construction Index suggests 55% of contractors
reported a high level of difficulty in securing qualified
workers. The sector is facing staff shortages as nearly half
of construction workers are over the age of 45 and nearing
retirement. Due to the industry’s nature, labor shortages
pose substantial liability risks by way of elevated (and more
severe) job site accidents, project delays and decreased
workmanship.
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2. Manufacturing — Experiencing a major labor crisis, the
U.S. Bureau of Labor Statistics (BLS) reports manufacturing
is currently facing nearly 800,000 job openings. Employers
have lowered job requirements related to criminal history,
legal marijuana usage and work experience to expand
their candidate pool. This could lead to an underqualified
workforce, increased job site accident occurrences and
subsequent liability issues. Recent industry research
indicates inexperienced manufacturing employees
contribute to over one-third (35%) of worksite accidents and
related insurance claims.
Reports also discovered that 60% of manufacturing
workers have additional stress, muscular pain and
discomfort from being overworked since the pandemic. This
is concerning as it can create additional accident risks and
related workers’ comp liability.
Trucking — Trucking employers have extended existing
employees’ driving schedules and lowered driver applicant
standards. Such factors can increase an employee’s
likeliness to be involved in serious road accidents and
influence various liability issues, including driver injuries,
fatalities, damaged or lost inventory, and delivery delays.
Measures to Minimize Labor Shortage Liability Risks
1.
Ensure effective onboarding processes. Especially if
labor shortages require you to hire inexperienced workers,
it’s critical to have proper onboarding protocols. These
procedures can equip new employees with the knowledge
and resources needed to succeed.
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2.
Provide routine training. All workers should engage in
regular, job-specific safety training. Instruction will help
promote a culture of safety, minimize workplace accidents
and decrease related liability concerns.
3.
Review and upgrade new hire training processes.
Retention rates are significantly higher when recent hires
are provided considerable training opportunities. Schedule
regular new hire training sessions with knowledgeable
employees to encourage new workers while they establish
their skill sets.
4.
Schedule regular check-ins. Maintaining open
communication will motivate employees to share safety
concerns or other work-related issues. This will allow you to
remedy problems before they cause liability incidents.
5.
Partner with your broker. Work with your broker to
make sure you have proper commercial insurance
coverage to protect your business. They can also help you
create additional risk mitigation strategies to keep your
employees and business safe.
No industry is safe from the effects of the current labor
market. Employee shortages can influence multiple liabilities,
but a proactive strategy can help protect your organization.