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The Aging Workforce: How to Manage Workers’ Comp Costs for the Silver Bunch

May 31, 2014 (9 min read)

Karen C. Yotis, Esq., a Feature Resident Columnist for the LexisNexis Workers’ Compensation eNewsletter, provides insights into workplace issues and the nuts and bolts of the workers’ comp world.

Here’s the story
of an aging workforce
that can’t afford to leave their jobs at all.
Most have hair of grey;
Some have sickness,
Many slip and fall.

In their May 2014 briefing titled Managing Workers’ Compensation Exposures as the Workforce Ages, the Risk Management Research group at Marsh & McLennan tells a sobering tale of “older” workers (most often the 45-65 demographic, although some consider the aging process to begin at 35 or earlier) who have been driven by the Great Recession to either remain working beyond the formerly typical retirement age of 65, or who gone back to work after retiring. These aging workers—the median age of the civilian workforce in 1992 was 37.1 whereas people older than 55 will soon represent more than one quarter of all U.S. workers—must remain employed to maintain a livelihood; they aren’t just keeping their jobs for a little part time something to do between Florida vacations.

It's also the story
of higher comp risk
for companies that can’t afford the cost.
But when older workers
lose their jobs
to young ones,
all that experience is lost.

Workers’ comp claims simply cost more when an older employee is hurt on the job, and that higher cost is not all attributable to the impact of higher salaries on claims for lost time. The big factor driving most of this expense is the presence of co-morbidities that are likely to develop with older workers. For example, Marsh points out that individuals between the ages of 40-59 are three times more likely (than the 20-39 year olds) to have metabolic syndrome and experience the combined effects of an obese gut, high cholesterol, even higher blood pressure, and insulin resistance, which puts them on track to develop heart disease and diabetes. Medical costs for injured workers diagnosed with co-morbidity are almost double the cost of otherwise comparable claims. In addition, workers who are overweight and suffer from related conditions have an increased risk of being hurt on the job and have much longer recovery times. Along with age though, come knowledge, skill, and productivity. And the loss of so many older SMEs from the workplace is creating troubling shortfalls of qualified workers, especially in the tech and healthcare industries. Employers buckling under skyrocketing claims costs simply cannot afford to lose the knowledge-based foundations upon which they hope to build future profits.

Till the one day
when wellness got with safety,
now post-offer testing
is much more than a hunch.
On-site gyms
make all the workers happy,
and employers
get to solve their budget crunch.

The Marsh briefing reports that organizations are using a number of strategies to address the complex factors that make aging workers so expensive to employ.  One approach involves integrated wellness programs that Marsh says are designed to “break down silos between safety and health.” Successful programs may include a wide range of options, from onsite gyms and physical therapists to targeted intervention programs for certain employee groups.

According to the Employee Health Management Best Practice Scorecard’s 2012 Annual Report compiled by HERO and Mercer that Marsh references in its briefing, employers increase acceptance of wellness programs when they include spouses in key program components, use a single brand to promote wellness activities, encourage senior leadership to participate, and develop formal, strategic written plans with financial objectives. Marsh recommends that wellness programs consider the concept of what it calls the “whole worker” on a 24-hour basis, with a goal of promoting “healthy behavior by employees of all ages at all times—not just at the worksite during typical work hours.” 

Marsh then drives home the ROI of wellness with a Harvard University study about every dollar spent on wellness programs reducing medical costs by $3.27 and absentee costs by $2.73, and a slew of real-world examples in which worker injuries are reduced by as much as 65 percent when companies merge wellness with occupational health and safety programs. But with the corporate eye focused on profit, will worker advocates be able to ensure that the “whole worker” concept doesn’t move the workforce away from The Brady Bunch and closer to George Orwell’s 1984?

The Silver Bunch
The Silver Bunch
This is how
You manage risk from
The Silver Bunch

Another approach that organizations are following to reduce the increase in costs associated with the ageing workforce involves job design and ergonomics. This is where the rubber meets the road in terms of safety and training. Marsh recommends that employers design work environments that limit things like repetition and force and help workers to avoid stress on joints and particular body parts. Job design is particularly effective if organizations take the older workers’ visual (contrast/color/lighting), physical (static postures), and mental (fatigue/concentration) demands into account.

Marsh takes safety and job design one step further by also recommending that instead of job descriptions, organizations perform physical risk assessments of the tasks involved in each position and create observation-based descriptions instead. Marsh also recommends Post-Offer Employment Testing (POET), in which prospective employees mimic job functions “so employers can match individual capabilities with job demands.” Well designed POET programs modify tasks where feasible to “maximize the population capable of safely performing the work.” Marsh also points out how POET supports evidence-based return-to-work decisions.

Rebecca Shafer, a goddess of risk and safety, who is also President of Amaxx Risk Solutions, Inc. and author of Your Ultimate Guide to Mastering Workers Comp Costs: Reduce Costs 20%-50% advocates in a similar vein:

"To protect older workers, companies need to think SAFETY FIRST! Make sure the company safety program includes the Job Safety Analysis (JSA) to determine and prevent personal injury to employees. Although the hazard analysis process applies to all jobs -- not solely those done by older workers -- the impact of job injuries to older workers can be more severe and take longer to heal, so it is particularly important for older workers. In order to do this, the work process is observed to see how the job is done which may be different for an older vs. younger person. For example, a work environment with difficult access and egress may need to have obstacles removed. Once all hazards are identified, protective measures can be put in place.

Shafer also suggests another way that employers can reduce potential future costs:  

“To minimize the impact of claims costs, make sure to have baseline medical tests including hearing tests performed on all new hires, so if an injury occurs the workers' pre-injury condition is known."

Marsh also recommends that employers retool their traditional safe body mechanics training by incorporating kinesthetic learning, which operates on the concept of teaching workers to feel improvements and gain confidence in their strength by changing their posture or position. Organizations have also used kinesthetic principles to identify physical engineering improvements geared to reduce shoulder and knee injuries. According to Marsh, older workers are incredibly receptive to these approaches, especially older employees whose on-the-job knowledge includes experience with work-related trauma.  

This path to cost reduction involves having a certified ergonomist conduct on-site employee interviews (and interviews of managers and health/safety personnel). In outlining the specific (and obviously expensive) details involved in designing and implementing an effective kinesthetic ergonomic program, Marsh points out that the required financial investment can be far outweighed by the potential benefits.

However, the most well-developed program—even one that incorporates wellness, nutrition, exercise, safety, kinesthetics, and every  bell and whistle known to the managers of risk—will accomplish nothing if the aging worker’s particular needs aren’t kept in mind. As pointed out by Robin E. Kobayashi, JD, Workers’ Compensation Practice Lead Editor, LexisNexis Legal & Professional Operations:

“It’s a good idea for the manager to recap any safety meeting by sending an email or written memo to the workers to ask if anyone has any further questions or suggestions. Often times people don’t catch things on the first time around. This is particularly true with older workers who may have hearing loss. Hearing impaired workers don’t always catch everything that has been said at a meeting. They might also be too embarrassed to admit this to their managers and co-workers. So my advice to managers is to recap, recap, recap when it comes to communicating safety issues to all workers—young or old.”


According to Marsh, managing the effects of an aging workforce is all about a multi-pronged approach. They recommend that employers grow their pool of healthier workers with less co-morbidity by putting a 24-hour focus on employee behavior through integrated wellness programs, conducting POET assessments, and implementing ergonomic training. Marsh recounts some intriguing industry examples throughout its briefing, but what are others saying about the efficacy of these cost containment measures?

Leslie J. Hutchinson, MD, MPH, FACOEM, of HLM Consultants offers this real-world assessment of wellness programs and job engineering:

“Currently, older workers comprise about 20 percent of the workforce, and this percentage will increase with aging of the baby boomers. Most non-fatal lost work days result from acute trauma; for elderly workers, hip fractures resulting from falls from the same level are a very common type of injury. Also, progressive loss of abilities, like cognitive and visual abilities, erodes valuable workforce assets like availability of workers who have the most cumulative knowledge and skills to perform job tasks. Preventive medicine or wellness programs typically look very promising in a cost-benefit analysis, but they have found limited acceptance by large companies. Job engineering to accommodate declining visual-spatial abilities as in presbyopia with progressive visual blurring in reading documents and computer use, cognitive abilities like progressive decline in memory and analytical abilities, and physical abilities like problems with balance and endurance, and to reduce injury risks often provides the most accessible measures to preserve valuable employee resources in the elderly workforce and prevent costly injuries in them. For example, inspection of the workplace by a safety professional to eliminate or minimize the trip and slip hazards present has been shown to reduce falls and their attendant fractures dramatically. This would benefit a proportionally larger portion of the high-risk group of elderly workers since they have an incidence of falls close to one in three.”

We’ll close this out with one final caution to any whippersnappers out there who might think that this article doesn’t apply to them. Au contraire, mes amis. Marsh emphasizes that in addition to helping today’s aging workers, the combined effects of an integrated wellness/job design and ergonomics program will be reflected “not only in today’s older workers, but also in those employees who will enter their 50s and 60s within the next 5 to 10 years.” Marcia Brady is old enough to be a grandmother now, and someday the same thing will happen to you.

This article is dedicated to Ann B. Davis, who played the housekeeper Alice in The Brady Bunch. She passed away June 1 at the age of 88.

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