Navigating future uncertainties: the crucial role of risk management for employers

October 31, 2023

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Last year, Sedgwick acquired Direct Health Solutions (DHS), a leading specialist provider of employer-based telehealth solutions in Australia. In this blog, we are joined by Christina Wunder, who weighs in on the importance of effective risk management. 

In recent years, risk management has become a paramount concern for employers — demanding equal attention to immediate, visible risks as well as latent, unforeseeable ones. The landscape of workplace risks has evolved significantly, and employers must now address both the tangible impact of the virus and the potential long-term consequences. This blog delves into the importance of risk management for employers, shedding light on the challenges posed by COVID-19 and providing insights into effective strategies to mitigate these risks.

Underlying psychological components

It’s important to recognise that while COVID-19 is cited as the primary cause for compensation claims in Australia, up to 67% of these claims also encompass psychological components such as isolation and fear. These factors significantly impact the cost and duration of an injury claim, which can be up to three times that of a physical injury claim. This puts employers at the crossroads of exponential risks – a surge in both the volume and severity of claims, accompanied by a long-term increase in insurance costs.

Accumulating liabilities and adverse impacts on existing claims

Beyond new claims, existing claims are also being affected by a range of factors. These include increased entitlement amounts and durations in some regions, revised expectations for the submission of medical certificates, and delays in crucial interventions like surgeries and medical examinations. Amidst these challenges, a business’s human resource (HR) function plays a pivotal role, shaping the organisation’s ability to navigate these complexities successfully.

The role of human resources and early intervention

Effective human resource (HR) management emerges as a central pillar in mitigating these challenges. Employing an early intervention approach proves to counteract the adverse factors affecting claims and employee health. Telehealth platforms stand out as a powerful means for HR to report, assess and address both physical and psychological health issues before they snowball into widespread concerns. This approach offers the flexibility of remote usage, enabling HR managers to swiftly track, document and deploy solutions to employee issues.

A holistic approach to mitigating risks

Beyond workers compensation, employers are entrusted with the responsibility of safeguarding their employees’ physical and mental wellbeing. This is particularly salient as workplaces transition back to a semblance of normalcy. Regulators emphasise the importance of infection control measures, imposing penalties on businesses that fail to manage these risks adequately.

To effectively mitigate risks, employers should:

  1. Develop an in-depth understanding of employee health across the workforce.
  2. Implement robust systems and processes to minimize the risk of injury or illness.
  3. Establish support programs for immediate assistance to employees in need.
  4. Extend support services to contractors and family members to holistically address psychosocial wellbeing.
  5. Maintain open channels for incident notification and continuous review of health and safety processes.

Steering towards a safer future

As businesses eagerly embrace a post-pandemic reality, the landscape remains rife with uncertainties. Employers must grapple with multifaceted risks, both immediate and latent, while striving to protect their employees’ well-being. Effective risk management demands proactive planning, diligent tracking, and strategic mitigation. Utilising HR tools, particularly telehealth platforms, empowers businesses to confront these challenges head-on, ensuring a safer, healthier, and more resilient future for both employers and employees alike.

This content was originally published by DHS, a Sedgwick business.

Tags: aus, Australia, Casualty, covid, COVID-19, Helping people, risk mitigation, workers' comp, Workers' compensation