The Effects of Low Unemployment Rates on Workers' Compensation

Topics: Workers' Compensation

The unemployment rate currently stands at 3.7% – continuing the trend of the last several months of rates checking in below 4%. The Bureau of Labor Statistics (BLS) report states that professional and technical services added 31,000 jobs in July of this year, bringing the 12-month job gain to 300,000. Employment in health care rose by 30,000 over the month, and for the year has risen to 405,000. Financial services have grown as well: 18,000 new jobs, with most of the gain occurring in insurance carriers and related activities (+11,000).

Unemployment Rates and Workers' Compensation Insurance

What does all the growth mean for small business and workers’ compensation insurance? The news is both good and bad.

The Good

happy workers in an office

More individuals in the workforce mean business is booming, which is great news for the economy. It also means a greater need for workers’ compensation insurance to protect those businesses and their employees from risk.

AmTrust provides coverage to a number of industries currently on the rise, including:
  • Technology
  • Landscaping
  • Health Care
  • Construction/Contractors
  • Hospitality
  • Restaurants
  • Breweries

The Bad

With so many people working, the talent pool has thinned for businesses still looking to hire new employees. When that happens, those businesses may have to hire individuals that are under-qualified and inexperienced – presenting a greater risk for injuries on the job. The effect is similar to what is seen in the retail industry during the holiday season or in the or in the restaurant industry during the summer.

New and/or inexperienced employees are more prone to injury, either because they have less on-the-job experiences to draw from or do not fully understand best practices for staying safe while performing their required duties since they aren’t used to the work environment.

Finding the Right Candidate in a Tight Job Market

Although a smaller talent pool can make it difficult for a small business to find the right candidate, it doesn’t mean you have to settle for a less-qualified individual. Here are some tips to keep in mind for hiring in a tight job market.
  • Write detailed job descriptions: ZipRecruiter recently found that employers have been writing longer, specific and detailed job descriptions. This will ultimately help prospective applicants figure out if the job is right for them as well as make it easier for the employer to get the type of workers they need.
  • Use social media for recruiting: Small businesses are not only using social media to market their product to potential customers but also their company to potential employees. Companies can share content on social media platforms that showcase their culture and work environment for recruitment purposes. Social media also allows current workers and potential hires to share open positions in their own networks, expanding the reach of the job postings.
  • Invest in employee training and productivity: In a tighter job market, it is crucial to invest more to train current employees and future hires. Some companies might consider rearranging teams to cover unfilled positions or even invest in technology to help boost productivity.
Once you’ve found the right candidate(s), make sure there is an onboarding plan ready. It should include elements like making sure their workstation is set up, scheduling time to complete any necessary paperwork, and scheduling time to go over items like company values and policies, showing them around the workplace and introducing them to co-workers. Small Business Trends offers these 11 best practices for a seamless employee onboarding experience.

Having an effective safety program in place can go a long way toward preventing injuries, especially with new and less-experienced employees on board. Learn more about safety programs by reading “How to Create Workplace Safety Training Policies and Procedures” and “How to Create a Long-Term Profitable Workplace Safety Program.” AmTrust offers an array of loss control resources to help you manage and minimize your workplace risks.

We Are Your Workers’ Compensation Solution

We are one of the nation’s largest workers’ compensation insurance carriers, writing more than 350 eligible classes of business. Learn more about our small business insurance solutions and loss control services, or contact us today.

This material is for informational purposes only and is not legal or business advice. Neither AmTrust Financial Services, Inc. nor any of its subsidiaries or affiliates represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose. Readers seeking resolution of specific questions should consult their business and/or legal advisors. Coverages may vary by location. Contact your local RSM for more information.

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