Tis the Season for Injuries – Part 2

By Kristen Chavez, President and CEO of www.workcompcentral.com

In our first installment of this two-part series, I provided an analysis and overview of the current state of retail.  It is no secret that retail is struggling with over ten thousand big box stores closing in 2019. In this article, I will take a closer look at the increase in injury frequency in the retail vertical and espouse on some potential drivers.  

Injury Frequency 

The US Bureau of Labor Statistics (BLS) recently published a report showing injury frequency stalling in 2018.   

NCCI reports that workers’ compensation injury frequency has experienced long-term declines.  They credit the prevalence on robotics, automation and continuous efforts around loss prevention as factors contributing to the continued reductions.   These long-term reductions have outpaced increases in claim severity.

The Hartford’s Chairman and CEO, Chris Swift recently outlined warning signs that claim frequency is ticking back up.   Mr. Swift noted several potential factors including how the current pressures on the labor market are resulting in companies hiring less tenured employees.   Less tenured employees are historically responsible for higher claim frequencies.  

Retail Trends

The retail Industry provides 15.7 million jobs second only to healthcare at 15.9 million.  The BLS recently posted a news release noting an increase in the frequency of workplace injuries in the retail industry.  To quote the release, “both the number and rate of nonfatal cases in the private retail trade sector increased in 2018.  The number increased 4 percent to 409,900 cases and the incidence rate increased from 3.3 cases to 3.5 cases for 100 full-time employees.”

In 2018, cases resulting from trips, slips and falls increased by 11% from 2017.  Injuries caused by contact with objects and equipment increased by 10%.  Most injuries in the retail industry are due to overexertion.    Salespersons, stock clerks and frontline supervisors missed the most time from work.  

Online Shopping 

It is difficult to accurately juxtapose the results of on-line retail giants such as Amazon with retailers that conduct a majority of their business in brick and mortar stores. 

The BLS is attempting to make some sense out of what is driving trends.  They determine outcomes by payroll.   For example, an Amazon fulfillment center, where a majority of online orders are processed are categorized as warehousing.   This is the same for Walmart or Macy’s that have a large online division, shipping orders out of warehousing operations.  

   

Recently Walmart is the third biggest online retailer in the United States.  Amazon is still in the lead by a wide margin, accounting for almost 50% of e-commerce sales in 2018.  

According to BLS, Injury frequency trends for warehousing is down slightly. 

Seasonal Employment

Seasonal hiring has declined annually since it peaked at 9.3 percent of base employment in 2013.   It is interesting that seasonal layoffs subsequently peaked in 2014.  

Injuries are more common in the winter and summer months.  Claims associated with soreness, pain, repetitive trauma and tendonitis also spike in the winter months.  Disability durations also peak during winter and summer. 

Conclusion

The media has coined what is happening with big box stores as the “retail apocalypse.”  Since 2017 there have been more than 50 bankruptcies and 21,000 store closures.  So, why is injury frequency increasing?   Is it the low employment rate?  The pressures created by record-low unemployment could be to blame by creating a shortage of experienced workers.  Inexperienced employees and those with less than a year on the job are more prone to sustain an injury.  The turnover in the retail industry is 60%.   What about age?  The average age of a retail worker is 37.  The average age of an injured worker in 2015 was 40.73.    Is it the hectic environment that retailers breed?   With thinning margins, more pressure is put on big-box retailers to attract customers resulting in longer store hours, promotions and sales.   Does job security play a role?   Studies show that more injuries are reported with longer claim durations during the winter and summer months.   Injuries consisting of soreness, pain and tendonitis are reported during the winter months.   The Holiday shopping season places a unique burden on those who work for retailers.    More sales, more promotions, more shoppers equal more injuries.