Labor Shortages and Business Liability Risks
February 22, 2022
The past year has seen labor shortages across industry lines. According to a recent study from the Society for Human Resource Management, nearly 90% of businesses are having a hard time filling open positions. These shortages are a result of various factors, many of which are related to individuals reevaluating their employment priorities due to the COVID-19 pandemic.
Such shortages can carry numerous consequences for businesses. Specifically, a depleted workforce increases the likelihood of current employees being overworked and employers having to hire inexperienced or less qualified workers to fill available positions. Together, these issues can cause employees to become prone to making mistakes or getting involved in accidents on the job—thus creating elevated business liability risks. With this in mind, it’s critical for employers to do what they can to mitigate labor shortages and related liability concerns.
Steps Businesses Can Take
To combat labor shortages, employers should consider the following guidance:
- Increase pay. Providing more competitive wages can help employers retain existing workers and attract new employees within their respective industries. Offering sign-on bonuses may also improve employers’ hiring capabilities.
- Offer additional benefits. A range of employment benefits can assist employers in maintaining an ample workforce. These benefits may include remote work capabilities, flexible scheduling, additional paid time off and well-being stipends.
- Reward existing employees. Employers can also use rewards and incentives to help retain current workers. These incentives may include monthly bonuses for top performers or extra discounts on business merchandise (if applicable).
- Limit business hours. To ensure existing employees feel properly supported in their roles, employers may need to adjust their business hours. Doing so can prevent employees from being overworked amid understaffed shifts.
To minimize potential liability risks caused by labor shortages, businesses should consider these measures:
- Ensure effective onboarding processes. Especially if labor shortages require employers to hire inexperienced workers, it’s critical to have proper onboarding protocols in place. These protocols can equip new employees with the knowledge and resources they need to succeed in their roles.
- Provide routine training. Employers should have all of workers—regardless of experience—engage in regular, job-specific safety training. This training will help promote a safety culture and minimize the risk of workplace accidents and injuries (as well as related liability concerns).
- Schedule regular check-ins. Finally, it’s vital for employers to check in with their workers on a frequent basis. Keeping such consistent communication will motivate employees to share any safety concerns or other work-related issues that arise, allowing employers to remedy these problems before they cause liability incidents.
For more information, contact us or reach out to your Cottingham & Butler representative today.