Workforce trends heading into 2023
One of the biggest logistical challenges of the pandemic was the rapid transition to remote and hybrid work models. Now many workplaces are working to establish what the future looks like to be successful in a competitive labor market. More than half (58%) of mid-market business owners and 19% of small business owners report they are currently facing a labor shortage.1
Findings from our Agency Forward research paint a picture of a workforce evolving past the immediate emergency needs of the pandemic and seeking a more fulfilling life-work balance. Known as the Great Resignation, an unprecedented number of workers quit their jobs, changed careers, and shifted priorities about what they want from careers and employers. In the last half of 2021, 10% of small business owners and 30% of mid-market business owners observed an increase in employee resignations.2
But are management and employees on the same page in terms of achieving the specifics of their desired work environment? When asked about the cause of the Great Resignation trend, 30% of business owners said employees resigned to pursue a passion, and 28% said employees were just burned out or needed more work flexibility. This was in contrast to responses from workers, who were more inclined to cite things like better job security, stronger cultural fit, or more competitive salaries and benefits as top reasons for seeking a new job.
Heading into 2023 and the latest workforce buzzword, two thirds (60%) of mid-market owners and 23% of small business owners are concerned about their workers “quiet quitting,” the practice of workers reducing the amount of effort they devote to their job.
Work environment changes
A level of normalcy has returned to the work environment. In-office employment has rebounded substantially from pandemic lows. While small business owners believe their employees provide the most value working in-person, mid-sized businesses are at least more open to a hybrid working environment.
However, all business owners report little confidence in a fully remote work model with 32% predicting issues managing hybrid or remote workers, research shows most mid-market businesses (52%) are operating in-person or hybrid (43%).
Across in-person, hybrid and remote-work environments, some of the top workforce obstacles mid-market business owners anticipate next year include:
- Retaining current workers (42%)
- Preventing worker burnout/managing workers’ mental health needs (41%)
- Keeping workers engaged and productive (37%)
Conversations with clients
In this continued hybrid working environment, there is an added layer of risk management associated with millions of additional employees working from home. Cybersecurity, of course, will continue with increased importance.
But there are also other areas of risks for insureds, including:
- Off-premise coverage—Depending on the value of equipment being used in remote work environments, businesses might want to consider insuring those materials.
- Business continuity planning—The possibility of another pandemic, significant weather event, or other worldwide challenge that could disrupt workflows cannot be overlooked.
- Private company management liability—Remote work will undoubtedly create new risks related to discrimination, wrongful termination, harassment, etc.
Actions steps for agents
As business owners introduce new work plans, here are some important topics that insurance agents can discuss with businesses they help insure:
- Cyber liability insurance is important no matter where their work takes place. Employers indicated that their likelihood for a cyberattack increased during the pandemic, but at least 4-in-10 workers haven’t received training to protect against cyberthreats.
- Strong employee benefits with offerings like group and specialty insurance plans, traditional retirement plans, or voluntary benefits like pet insurance can help attract and retain workers.
- High labor demand sometimes leads to rushed hiring processes. Employers must continue thorough employee screening, onboarding and safety training to reduce risks with less-experienced workers and help maintain reasonable workers’ compensation rates.
- Don’t forget the business continuity planning lessons learned through Covid-19. Even if workforces are back in person, business continuity planning will remain vital for preventing lengthy disruptions that could be brought on by supply chain issues, significant weather events or other challenges.
- Private Company Management Liability coverage is essential for companies of all sizes and sectors to help reduce exposure to employment-related liability in today’s constantly changing business environment.
Nationwide partnered with Edelman Data & Intelligence to conduct a 15-minute national online survey of 500 small business owners, defined as owners of companies with 1-50 employees and less than $10 million in annual revenue, 200 mid-market business owners, defined as owners of companies with either 51-500 employees or $10 million -$500 million in revenue and 400 independent insurance agents, defined as a mixture of principals, producers, and customer service representatives. The small and mid-market business owner survey was fielded from October 7-27, 2022, and the independent agent survey was fielded from October 24-November 4, 2022. As a member in good standing with The Insights Association as well as ESOMAR Edelman Data & Intelligence conducts all research in accordance with local, national and international laws as well as in line with all Market Research Standards and Guidelines.
Nationwide and Edelman Data & Intelligence conducted a national online survey of 1,000 US employees in an office setting, 400 independent insurance agents, 400 middle market business owners, and 399 small business owners to understand what employment and workplace shifts are happening and provide unique expertise to help them navigate this new work environment. The study was fielded from February 1 to February 20, 2022.