Newsletter Sign-up

By CYRIL TUOHY, managing editor of Risk & Insurance®

Scenario: When 64-year-old Ohio shipbuilder Jim Carrington looks back on his professional life, he points proudly to the five decades he spent building ships for the U.S. Navy.

There was plenty of work; the pay allowed Carrington to raise three children comfortably, and he looked forward to the daily shipyard camaraderie, particularly during the depths of the cold, dim Maine winters.

Even when he suffered a severe injury after a steel plate came crashing down on him, almost severing his left arm above the elbow, Carrington took the setback in stride.

It was part of the job, he said. In the hospital for more than a month, the then-32-year-old Carrington was in rehabilitation for two years. Workers' comp payments helped get him though that difficult period, and union protections ensured his job was there for him when he returned, which he eventually did.

In the early 1990s, in his 40s and by now a skilled veteran, Carrington noticed fewer young workers coming into the specialized welding trades. There was still young talent in the pipeline, just not as plentiful as he remembered.

The years passed, and Carrington began to notice more pressure on veterans like himself with precious skills. Overtime hours were more frequent. He was called upon to find ways to weld new alloys as the Navy ordered new ships. Welding now involved computers and high-powered torches.

"There were fewer of us around, and fewer of them stepping into our shoes, if we were sidelined with injury," Carrington said. "Kids went to college, and they kissed the blow torch good-bye when management jobs came calling."

Though Carrington's job was safe, he remembers thinking, "Where are the new workers going to come from, who's going to replace me when I call it quits?"

Another factor hit Carrington one day; more women were entering the field. He noticed another change. New workers seemed more resistant to employer requests than in the past.

Young welders presented a strange new paradox to Carrington. As skilled and familiar as they were with welding technologies and computers, they would take absences more frequently, were quick to consult lawyers if they slipped on wet decks, and they did hesitate to go to the infirmary if they'd suffered minor injuries on the job.

They wanted working hours set in stone. This new breed of tradesmen, some coming with a little extra mental firepower in the form of paralegal backgrounds, was familiar with all sorts of new laws.

There was the 1964 race, color, sex and gender rule known as Title 7, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1991, and even a new federal body known as the Equal Employment Opportunity Commission.

For Carrington, discussions with this new generation of welders was less about the love of the craft, building fighting ships or even shaping metals.

New workers talked for hours about equal pay, safe working conditions, gender inequalities, and racial fairness. For the first time, he heard the expression "protected class."

In short, Carrington said, the new workers wanted to know less about what they could do for the Navy, and more about what the Navy could do for them.

Analysis: For workers' comp and disability managers, along with risk managers with employer-practices liability coverage duties, the big number they need to worry about is 10,000.

Every month beginning in January this year and for the next 18 years, about 10,000 people turn 65 in the United States, according to U.S. government data, as the baby boomer generation born between 1946 and 1964 moves into retirement.

As boomers age and life expectancies extend further into the future, many workers in the 65-and-over age bracket are opting to work longer to fund their golden years, delayed further by the economic downturn brought on by the Great Recession.

Employers are equally as motivated to retain older workers, but for a different reason, insurance experts say. Companies, under pressure to do more with less, need to retain workplace veterans, said Carmen Sharp, assistant vice president of workers' comp product development for The Hartford Financial Services Group. "There's impetus on both sides for older workers to stay on the job," Sharp said.

Examples of how far companies will go to hold on to talent borders on the absurd, even in an era of nationwide unemployment rates averaging nearly10 percent.

Brian Roberts, risk control officer for CNA, and himself a baby boomer, gives the example of his recent experience with a client who drove him to the job site to introduce Roberts to the company's two newest apprentices.

"They were both 73-year-old first-year apprentices, so that's an example of finding people with the necessary skill sets," Roberts said. "Some people are going through apprentice programs; but, there's not going to be enough of them for the needs that will develop as baby boomers retire."

Here's the rub, though. When the cumulative trauma of 40 years of labor on aging bodies catches up with veteran workers, they tend to suffer more severe injuries and their recoveries are slower. "The total incidence of injury for older workers isn't much different than for younger workers, but it's the duration that is different," said Wayne Clifton, assistant vice president for ESIS Health, Safety and Environmental.

Slower recoveries isn't something employers can afford, and because many employers now operate with fewer employees than they did five years ago, there are fewer opportunities for companies to offer injured workers modified duty assignments.

Many employers, "need their workers to be at 100 percent of performance instead of at 60 percent," said Dr. Robert Bonner, The Hartford's medical director and vice president of medical practices.

Hence the intense focus as a mitigation strategy on injury prevention and ergonomics to adapt the workplace to the needs of an aging workforce, instead of forcing out older talent and replacing it with younger workers using the cheapest available tools.

Workers' comp, disability and return-to-work challenges aside, there's another dynamic at work facing companies struggling with challenges posed by aging workers.

The plaintiffs' bar is aggressive in seeking redress from employers in the wake of anti-discrimination laws, and an activist EEOC in 2010 levied more age and disability discrimination charges against private employers.

"If you drill down to the cases and look at the issues of proportionality, the age discrimination cases cost a lot more than the race and gender cases, or cases of disability and country-of-origin cases or cases involving other protected categories of employees," said Ann Longmore, executive vice president at Willis.

Yes, a recessionary environment helped pressure employers into playing legal defense, but the trend toward protecting older workers from discrimination in the workplace is unmistakable, employment liability experts said.

"Age cases may tend to involve 'off the cuff' comments that come back to haunt employers," said Cathy Padalino, vice president and employment-practices liability product manager, Chubb Group of Insurance Cos. "Any mention in emails of 'young blood,' 'fresh ideas,' 'slower and stodgier,' expressions deemed objective and innocent, can often turn out in age cases to be a smoking gun."

Workplace discrimination experts advise managers to remain sensitive to the fact that age and performance are not related, and to double-check that severance agreements, liability waivers, and severance payments don't discriminate.

Employers, of course, should make sure they have plenty of employment- practices liability insurance coverage as well.

(Read about our 10th emerging risk, distressed cities.)

May 1, 2011

Copyright 2011© LRP Publications