“We’re hiring” signs remain in windows and job advertisements continue to flood our feeds – it’s no secret that the labor shortage continues to torment employers and their workforces. In fact, new data reveals the nation’s worker shortage crisis is actually getting worse…
According to the Bureau of Labor Statistics (BLS), 428,000 jobs were added, but participation in the labor force declined to 62.2 percent in April, and 363,000 workers left the workforce, all factors further exacerbating the worker shortage crisis. Goldman Sachs said that we’re in the midst of its biggest worker shortage in 80 years!
Whether you’re an employee, customer or business owner, you have probably felt and dealt with the consequences of the ongoing labor shortage–haphazard customer service, long waits, production delays, limited inventory, overworked employees and the list goes on. These consequences not only make for a difficult business environment for everyone involved, but they also increase certain risks for business owners and employers.
5 Labor Shortage Risks Businesses Know
Is your business struggling with labor shortages? The shortage of employees raises a variety of risks, such as:
The labor shortage, or the “Great Resignation” as it was once coined, not only puts employers in a pinch for finding help, but it is also taking a toll on the employees who remain at the company. Many employees are being forced to take on the responsibilities of fleeing colleagues leaving them overworked, stressed, less loyal and doubting if their pay is high enough. Cue burned out employees.
With the worker shortages and increased turnover, seasoned employees have less capacity to train new workers. This lack of training can lead to more workplace injuries–especially in high-intensity industries like manufacturing and construction.
In addition to the increased risk of workplace injuries, having fewer seasoned workers and/or newer workers often leads to property damage caused by the misuse of company equipment. Replacing damaged or broken property adds up quickly!
Product liability claims
A workforce that is spread too thin can lead to less scrutiny of product design and control, which can lead to quality concerts and potential product liability claims. Product liability claims can expose a business to legal action by consumers and other businesses who could be wronged, injured or otherwise impacted by faulty products.
As with product liability, overworked employees also tend to generate more mistakes. And unfortunately, minor mishaps can have big consequences, like lawsuits, project delays and other issues.
Mitigating Labor Shortage Risks
While the labor shortage is impacting the entire economy, it is straining different industries in different ways. Mitigating these risks starts with understanding how they specifically impact your business. Here are a few general steps all businesses can take to mitigate labor shortage risks:
Beware of employee burnout
Employers should read up on the signs of burnout to keep a pulse on how your employees are handling new responsibilities, routines and working arrangements. Encourage managers and employees to set reasonable work boundaries.
Establish an effective onboarding/training processes
Remain committed to establishing a safe and healthy workforce. Ensure employees have all the skills and knowledge they need to perform their jobs safely and effectively.
Review your insurance coverage with your agent
It’s never a bad idea to contact your insurance agent to discuss operational changes in your business and the emerging risks your business faces to ensure your business is protected in the case of a misstep.
Be Protected for the Unexpected
Kemmons Wilson Insurance Group is here to help you assess the risk your business faces as the labor shortage prevails. Contact an expert at KWIG to review and discuss your insurance and risk management programs. We provide tailored insurance and risk management solutions to the problems you don’t see coming.