Accommodating The Older Worker

Steven Van Yoder

Baby boomers are swelling the ranks of the employed, potentially impacting workplace injuries. Employers have to address these issues now to keep workers' comp costs under control.

The post-World War II baby boom generation has had a profound effect on America. The sheer number of people in this generation makes it a major demographic contributor to important events and developments in society, the economy, and the workplace.

But despite the many profound implications, studies show that most employers are not planning for the aging baby boom generation. The aging of the work force, and the trend toward longer working lives and greater employer reliance on older employees, has significant cost implications that must be addressed. These issues include increased workplace injuries and workers' compensation costs, as well as potential labor shortages as baby boomers retire.

Between 1946 and 1964, about 75 million children were born in the United States, an average of about 4 million births each year, peaking at more than 4.2 million a year in the early 1960s. Between 2011 and 2029, the baby boomers will reach the traditional retirement age of 65, swelling the ranks of America's elderly to record highs. Experts predict there will be a severe labor shortage as baby boomer retirements dramatically reduce the size of the work force. In addition, many boomers will work well beyond the traditional retirement age, a fact that promises to impact workplace injuries and claims costs.

Injuries, Claims Implications

A recent study by the National Council on Compensation Insurance (NCCI) concluded that the median age of America's work force will rise to 41 in 2005, up from 34 in 1980. And the ranks of workers 45 or older will increase to about 55 million, or nearly 40 percent of the labor force. Furthermore, the study concluded the average age of U.S. workers, including those injured on the job, has increased since the early 1980s.

Between 1980 and 1990, the average cost per covered worker for workers' compensation insurance increased from $127 in 1980 to $324 in 1996. The study acknowledges other factors that affected claims costs in this period, such as statutory reforms. Still, the researchers found that the demographics of aging have statistically significant effects on the workers' compensation system's cost components.

Older workers experience fewer injuries with less frequency overall than younger counterparts, but the severity of injuries is greater among older workers and causes a resultant increase in indemnity and medical claims costs. The NCCI predicts a 2 percent decline in claims frequency between 1997 and 2001 that will be offset by acceleration of claims costs. The average cost per lost-time claim is predicted to increase by 3.8 percent in indemnity costs, up from a 1.4 percent annual increase during a prior period between 1993-1997 and a 3.1 percent annual increase in medical costs, up from 2.8 percent.

An aging work force also brings preexisting health problems and conditions that affect workers' compensation costs. Called co-morbidities, these conditions, if left unchecked, can significantly impact workplace injuries and claims costs. "Generally older workers are more experienced and careful and have lower injury rates. On the other hand, they are more likely to have developed nonoccupational injuries that increase in severity over time and contribute to future workplace injury claims," says Eric Oxfeld, president of Strategic Services on Unemployment and Workers' Compensation in Washington.

According to Oxfeld, state workers' comp laws do not do a good job of distinguishing work-related from nonwork-related health conditions. "In many states, if work aggravates nonoccupational health conditions, it may become compensable. Responsible employers may want to establish a baseline to determine whether hearing loss, or any other degenerative condition, is caused by the aging process rather than job conditions. Therefore, employers who have workers in the baby boom generation may want workers tested for things like hearing to see whether it is or isn't the product of a work-related degenerative process."

Employers must address and recognize conditions such as cardiovascular, cerebrovascular and pulmonary diseases, diabetes, arthritis, allergies, asthma, and hearing loss, all of which can make workplace injuries more complex, costly, and difficult to treat while presenting treatment delays and confusion in the diagnosis and evaluation of potential work-related health conditions.

Periodic hearing tests and ergonomic evaluations, for example, go a long way toward addressing and minimizing the risks associated with preexisting or potentially degenerative health conditions. Becoming aware of employee health conditions (discreetly through hearsay or direct observation) can help management identify and deal with degenerative conditions such as arthritis by giving employers the opportunity to accommodate an employee's workplace needs in a manner that reduces the risk of injury.

Coming Labor Shortage

According to a study by the Urban Institute (sponsored by the U.S. Department of Labor), the absolute number of labor force participants between the ages of 45 and 54 will increase by about 31 percent (from 26 million to 34 million) by 2005. This compares with more modest increases of 8.5 percent for people age 16 to 24, and a decline of 10 percent for 25 to 34 year olds. The projected labor shortage has caused some to predict dire consequences if employers do not embrace the realities of an increasing reliance on an older work force.

"I recently spoke with the management of a major American company who said that within five years, half their work force would be eligible for retirement," says Bruce Douglas, senior medical consultant for Marsh Risk Consulting in Deerfield, Ill. "This is a company with worldwide operations, and the managers had long faces because they faced a labor shortage.

"It was not so long ago that encouraging older people to retire was very normal, and very American, particularly with union shops," Douglas says. "Unions struggled to get contracts with employers who had good retirement benefits. Now even the unions are starting to realize they might have done themselves a disservice."

Douglas predicts an economic disaster--a labor shortage brought about by baby boomers leaving the work force. Because fewer younger employees are available to take their place, Douglas says that employers must embrace and prepare for an older work force out of sheer necessity. "The average older, healthy woman age 50 has almost half her life left. The average, healthy male will live until age 83. From a societal and corporate point of view, it doesn't make sense for many of these people to go out to pasture."

The American Association of Retired Persons recently published its third study identifying, documenting, and tracking the policies and practices of American business toward older workers. The study predicts there will be less new entrants into the work force.

It also predicts that because retirement becomes a more elusive goal due to Social Security being restructuring, corporate pensions being trimmed or eliminated, and personal savings being depleted or nonexistent, many older workers will need jobs because of their circumstances.

A robust economy, combined with a shrinking pool of younger workers, is expected to increase the employment of older workers beyond the current retirement age.

"The culture of the company still tends to reach in the direction of retirement. Corporate America has to recognize that this premise is outdated and work to develop ways to keep older people at work," Douglas says.

Realities of Older Workers

There are three realities we can count on: the workplace is aging and will be working longer out of economic necessity; older workers are less likely to have accidents but experience more severe and costly claims when they do; employers must prepare now for an older work force.

"As many people remain happy and productive at work into their golden years, they will still be burdened with the baggage of age," says Bruce Douglas. "As workers get older, they will experience impediments that will impact productivity and recovery time from injuries. Since employers have to accept the reality of using older workers, they have to do everything in their power to ensure that older workers remain healthy."

Connie Vaughn-Miller, national director, prevention services, for Intracorp, a health care and disability management company in Philadelphia, says that employers should start thinking through all the ramifications of an older work force.

"From a health care and management side, one of the things we look at with the aging worker is how can the employers begin to better prepare for what's coming ahead," she says. "Employers must understand the demographics of their particular work force."

Miller suggests a diagnostic approach, asking the questions: Who is my work force? How old are they? Are they primarily women or men? What's my injury experience? How are jobs done today versus how they'll be done in five years? Will there be more risk?

"We're helping employers target specific, high-risk areas to assist them in defining transitional duties for employees who return to work after an injury, building corporate return-to-work programs, and implementing ergonomics programs. We suggest diagnostic programs for specific conditions, such as carpal tunnel syndrome and programs that deal with pre-injury analysis and strategy processes."

Employers need to adapt job duties, as well as training programs and equipment design, to accommodate health conditions and reduced motion and muscle strength affected by age, Miller says. Other factors such as visibility, bone density, general fitness, aerobic capacity, and cognitive speed and function must also bear on workplace design. Employers should modify expectations of what people can do, based on age and physical condition.

Employers need to consider working conditions that exacerbate conditions such as heart disease, arthritis, diabetes, asthma, obesity, and depression. The side effects of prescription medications taken to treat injuries or conditions must also be factored in for their effects of slowed response time, drowsiness, nausea, confusion, and depression--all things that affect not only productivity but also how a person safely performs a job.

Periodic evaluations of the work force are essential to understand and address issues related to its age composition. Periodic loss-run analysis based on prior workers' compensation records can help identify trends that contribute to injuries and claims.

Another important consideration is the potential impact on discrimination lawsuits, according to Jon Miller, attorney at Berger, Khan, Shafton, Moss, Figler, Simon, and Gladstone in Irvine, Calif. "If employers want to avoid discrimination, they need policies in place that address an aging work force," says Miller. "To be in compliance with state and federal family medical leave laws, they need polices that accommodate people with disabilities.

"The way these laws are written, there's no safe haven," he says. "Companies must assess the aging in the workplace and consult an attorney or human resource professional to assess risks and develop policies. Employers should consider employment practice liability insurance, which covers some of the risks associated with going to court to protect employers if a disability suit arises."

COPYRIGHT 2000 Axon Group
COPYRIGHT 2008 Gale, Cengage Learning