EPLI risk increases as the North American workforce ages

EPLI risk increases as the North American workforce ages | Insurance Business

EPLI risk increases as the North American workforce ages

Have you noticed a couple more grey hairs sprouting from your colleague’s head? Perhaps it’s down to the stress of working too hard, or perhaps they’re just getting older. While we’d all like to believe in stress-driven greys, the age factor is much more likely. In fact, it’s statistically proven that the North American workforce is ageing.

According to the US Bureau of Labor Statistics, workers aged 55+ will make up 25% of the US workforce by 2024, compared to 13% in 2001. The same is true in Canada where workers aged 55+ are expected to make up nearly 25% of the workforce by 2021, according to Statistics Canada. As the workforce ages, a certain type of employment practices risk grows in tandem – the potential for age discrimination.

International specialist insurer Hiscox recently released its 2019 Hiscox Ageism in the Workplace Study, which revealed that 21% of US workers aged 40 and older have experienced discrimination in the workplace because of their age. Despite the workforce ageing across North America, the Hiscox report found that only 38% of workers received any form of age discrimination training in the past 12 months. The insurer believes that as the average age of workers increases, and discrimination training remains sub-par, the likelihood of discrimination claims being filed via employment practices liability policies will increase. 

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“Age discrimination in the workplace is an increasingly serious issue for businesses and employees as older generations continue to maintain their professional careers longer than their predecessors,” said Patrick Mitchell, management liability product head at Hiscox USA. “Discrimination of any kind brings serious reputational and financial risks to any business and can negatively impact a worker's career trajectory.

“Age discrimination can impact a worker’s motivation, which in turn can hurt productivity, customer service and product quality. Then there’s the issue of dealing with the loss of talent and institutional knowledge if older, more experienced workers decide to leave due to age discrimination. That’s actually a serious issue. Forty-three per cent (43%) of our survey respondents reported that they had left a company due to experiencing or witnessing age discrimination.”

There are many steps organizations can take to protect themselves and their employees against the risks of ageism in the workplace. First up, companies can provide workforce training – something that 62% of Hiscox’s survey respondents did not receive. This is critical for educating employees around both overt and subtle forms of discrimination in the workplace, and having that type of training helps employees become an earlier warning system for the company, Mitchell explained.

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“Companies really need to focus on three things: prevention, detection, and mitigation,” he told Insurance Business. “Prevention is all about training. Detection is the next important step. Employers need to be on the lookout for certain behaviours, whether that be under-representation of older workers in new hires or promotions, or a certain age group being disproportionately affected by job terminations. What employers can do to detect age discrimination is conduct periodic anonymous surveys that allow them to gauge the extent of ageism in the workplace. Also, there are other things they can track in those surveys too, like harassment in general, so they’re really useful tools.

“The final point is mitigation. Whenever a discrimination claim is filed or brought to light, employers need to investigate them immediately. They need to take each and every complaint seriously and investigate them thoroughly to ensure they’re doing everything they can to take care of the matter. And of course, employers can also purchase employment practice liability insurance to protect themselves.”