How is workplace safety evolving in 2022 and beyond?

How is workplace safety evolving in 2022 and beyond? | Insurance Business Canada

How is workplace safety evolving in 2022 and beyond?

Two years into the COVID-19 pandemic, the world is struggling to get back to the workplace. The incredible advances in vaccination and treatment have been offset by increasingly contagious virus variants that pose huge risks to employees and businesses.

Gary Pearce (pictured above), chief risk architect at Aclaimant, sat down for a Q&A with Corporate Risk and Insurance on how today’s volatile situation will affect the workplace risk scenario moving forward. Pearce said that insurance and risk managers must take this opportunity to act and address the changes in the workplace with employee safety and risk management in mind.

Corporate Risk and Insurance: What are the major shifts in the workplace safety situation that businesses have seen/are going to see?

Gary Pearce: The top issue isn’t the Occupational Safety and Health Administration (OSHA) and guidance from the government – it is the heightened expectations of the workforce. Being safe is a prerequisite for many to return to, or remain in, their job, and they regard this as their employer’s non-negotiable obligation. In a world where talent is expensive and scarce, this is a central fact of life for employers in nearly every industry.

Nobody fully knows how the regulatory landscape will play out in 2022. A clean, national win is highly unlikely for either side of the current dispute over OSHA’s COVID-19 Emergency Temporary Standard because whoever “loses” is likely to seek other remedies or workarounds, whether at the state or federal level. What’s certain is that a complex, inconsistent and ever-changing regulatory landscape will persist throughout the next year, and risk managers need to start preparing to comply sooner rather than later. Having said this, the regulatory environment with respect to safety is more settled and consistent than the wrangling about the COVID-19 Emergency Temporary Standard might suggest. Regardless of the outcome, there will remain a spectrum of unaffected workplace safety obligations arising from OSHA, from federal contracting standards, from state-level mandates, from customers, and from the realities of litigation and reputation risk management.

Risk managers need to be acutely aware of the potential for disputes based on other issues to play out in a workplace safety context. Employees with grievances regarding terms of employment, or respectful workplace experiences, or even performance problems may latch onto workplace safety as a foundational or supporting allegation. This is a reflection of the heightened importance and highly personal nature of workplace safety.

CRI: What top risks should risk managers be on the lookout for?

GP: We will see an ever-more-complex palette of compliance obligations that are often highly inconsistent from jurisdiction to jurisdiction, making management difficult. Public hostility to large enterprises, and in some cases a sense of entitlement, will have consequences in the way of heightened standards of conduct and ever-increasing jury verdicts, which, in turn, will further ratchet up the cost of liability insurance. Beyond that, environmental, social and governance issues will in some ways transcend political debate and become part of the baseline compliance obligation.

Additionally, cyber risk will continue to become more complex, with higher stakes. We haven’t yet experienced the very plausible black-swan cyber event, so risk managers must consider the additional threat this poses to their business and employees. Cyber risk’s first cousin, data privacy, will creep to new prominence over the next couple of years. Risk managers would be well served to make sure they are familiar with this space from a risk and compliance perspective.

CRI: What are the opportunities that risk and insurance managers can seize in making the workplace safer for everyone?

GP: One thing business leaders can do to create safer workplaces is to remember that nobody is opposed to keeping people safe. Risk managers should communicate liberally with stakeholders and when doing so, emphasize areas of broad consensus such as effective hazard identification and accountability for corrective actions. Additionally, they can pre-empt limited or preconceived notions about workplace safety by reminding stakeholders about the multiple avenues of causation and liability. When people become aware of why certain rules are in place and understand their relevance, they are more likely to support them.

Beyond communicating safety efforts clearly and frequently, risk managers should tie specific initiatives to the needs and expectations of talent, of customers, and of other critical stakeholders. There’s nothing wrong with basing actions and policies on legal or regulatory requirements, nor in affirming the organization’s intent to meet the letter and spirit of such laws and regulations. Such messaging can be more effective when it is made relevant to the personal circumstances of the recipient. Lastly, as in other areas of risk, don’t base policies or actions on specific perils or scenarios. Don’t try to guess what’s next. Be proactive and think generically to create safe work environments and cultivate risk-minded employees.

CRI: What are your predictions about the profession of risk management this year and beyond?

GP: Technology is taking over the profession of risk management and will continue to do so in the year ahead. That said, risk managers don’t have to be tech experts to be effective users of technology and feel the positive impact of these tools on their employees and business. The profession of risk management is going to be less about traditional risks – such as workers' compensation, general liability and property perils – than ever before. All the traditional risks are still there, but the effective risk manager will be emphasizing much more as risk issues become increasingly entangled in politics. Risk managers need a healthy awareness of the dynamic and an understanding of multiple perspectives to be effective. The escalated status of risk management will also remain intact in 2022 and beyond. This poses an opportunity for risk managers but also increases the potential for overlap with other corporate functions. Beyond that, insurance will be a less comprehensive solution to key-risk concerns than ever before. Effective managers will be ready for emerging trends such as heightened management liability – even rising to criminality in some cases – and guilt-by-statistics use of big data by regulators and litigators.