Why Are We Rushing Hiring and Return to the Office? 6 Critical Risks Employers Might Not Know About

July 8, 2022

By Ed Hanna, CIC, Vice President, Enterprise Risk Management Practice Leader, Senior Account Executive, and Anthony Bellucci, Vice President, Senior Claim Consultant

Workplaces across the U.S. look markedly different today compared to two years ago.  

The pandemic has changed nearly every aspect of when, where, and how we work. Workforces have gone remote, new personal protective equipment has been introduced and safety guidance continues to change.  

Additionally, employees are changing jobs at unprecedented levels. Companies across all industries are struggling with talent gap issues and meeting increasing employee demands. Flexible work environments have become not just normal but expected. This creates opportunities for employers to deepen talent pools by looking more broadly. Approaches have varied between instituting remote and hybrid onsite work policies, rebalancing salaries, enhancing benefits offerings and more. Complexities are further added by hiring new staff, implementing new training requirements and setting new, fair office policies.   

During times of great change, new risks inevitably emerge. The workplace is no exception, and risk managers are now tasked with coming up with strategies to prepare for these risks and potential areas of human capital and liability. However, some risks can be difficult to identify as the modern workplace continues to evolve.  

As risk management and insurance experts, we’ve been watching these dynamics unfold and have identified several areas risk managers must monitor. Below are six critical risks that employers should know about and address going forward: 

  1. Employment practices lawsuits: Flexible remote work policies, while enjoyed by many employees, can introduce instability to the workplace when they’re not implemented properly. Companies that adopt flexible remote work options can face employment practices lawsuits if some employees feel they aren’t given the same opportunities as others. For example, if an employee’s in-office schedule aligns with their manager’s more than their peers and receives a promotion, other employees may feel they didn’t get the same chances to demonstrate their qualifications. This can lead to discrimination lawsuits that trigger employment practices liability claims.  
  1. Workforce-related D&O claims: For many reasons outside of management’s control, the pandemic has caused performance to suffer at countless businesses over the last several years. However, disappointed shareholders often point the finger at company leadership, and can blame them for mismanagement in a lawsuit. Even if the drop in performance was caused by mandated shutdowns, declining demand, travel restrictions, or any number of COVID-related reasons, shareholders can claim that leadership failed to properly retain and manage talent throughout the pandemic. These lawsuits can trigger directors and officers insurance claims and lead to significant costs if not handled properly  
  1. Discrimination lawsuits: Companies implementing return-to-office policies must be careful not to discriminate against employees who may be considered higher risk of suffering a negative outcome from a COVID infection. Similarly, employees who are more regularly exposed to more individuals or live a lifestyle that increases their risk of infection cannot be treated any differently than the rest of the workforce. If managers set an in-office work schedule that employees deem is unfair, employers could face costly discrimination lawsuits.  
  1. Business interruptions from COVID outbreaks: While many factories, stores and office buildings are back to operating at full capacity, COVID infection remains a persistent threat. “Super spreader” events at the workplace can lead to multiple employees getting sick at the same time and being unable to work. This can cause significant business interruptions that can impact financial performance. However, most business interruption policies today have exclusions for COVID infections and have been reluctant to reimburse companies for related losses. This makes the implementation of robust workplace safety policies that limit the potential for “super spreader” events even more important.  
  1. Workplace injuries at home: Employees are working from home and remote office spaces now more than ever. This fragmentation of the workforce introduces new challenges when it comes to reporting, investigating, and filing workers compensation claims. When a workplace injury happens in the home office, delays inevitably arise in the reporting process. It is also much more difficult to investigate the event when there are no witnesses present. Determining whether the accident occurred while an employee was performing their job introduces another gray area to consider. As a result, company leadership should revisit their workplace safety and injury reporting policies to account for remote workers.  
  1. Deteriorating employee mental health: The pandemic changed our lives forever and unfortunately impacted the mental health of countless workers. For some, being called back to the office has exacerbated these issues and triggered even higher levels of stress. Mental health issues have been linked to lower productivity and satisfaction, which can lead to employee attrition. Employers should train managers to keep an eye out for the symptoms of mental health issues and direct employees toward all resources available to them in their benefits plan.  

Stay Vigilant 

Keeping on top of these evolving risks will require risk managers to constantly reassess their employment practices and identify new potential areas of liability as they emerge. Further, risk managers should work closely with their peers in human resources to ensure practices for attracting and retaining talent include strategies to address these risks. This is an ongoing effort which requires the consistent attention of risk management departments and their stakeholders. Thankfully, there are partners that can help you manage these risks and set policies that limit your liability. At Conner Strong & Buckelew, we’re insurance and risk management experts that have kept a close eye on the evolving workforce landscape. We can identify emerging risks that may be hiding in plain sight and help you develop a plan of attack to best protect your business now and in the future.  

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Safety Consulting

Practice Leader

Edward Hanna, CIC, CIH

Vice President, Enterprise Risk Management Practice Leader, Senior Account Executive

Practice Leader

Anthony Bellucci

Vice President, Senior Claim Consultant