When Hiring Just to “Fog a Mirror” Is a Bad Idea…
In today’s “post pandemic shutdown” era, the universal cry from almost all industries is that they can’t hire enough workers. Cries of worker shortage abound.Desperate for Qualified Workers
Take a look at the following examples to get a feel for the impact this is having on our economy:
- CEO of Restaurant Brands International, said that 40% of their fast-food locations have been forced to scale back operations - cutting hours and/or operating as drive-thru only. (1)
- Grocery store chain Harris Teeter cut back the hours of operation for its stores nationwide in September to alleviate staffing shortages.(1, 2)
- Across the U.S., there is at least one open job for every American seeking work.(1)
- The U.S. had 10.4 million job openings as of the end of September, according to the latest report from the Bureau of Labor Statistics (BLS) published Friday (1)
- Nonfarm employment in the U.S. is down by 4.2 million, or 2.8%, from its pre-pandemic level, according to the latest October figures from the BLS. (1)
- Half of the 11,000 employees recently surveyed by CNBC in October reported their companies are understaffed. (1)
- A shortage of bus drivers has forced school districts to combine routes. (2)
A lack of qualified applicants has led employers to be desperate for workers and willing to forgo many of their previously utilized pre-hire/post offer testing – drug testing, background checks, and Physical Abilities Testing.
What happens when Physical Abilities Testing is eliminated?
When Physical Abilities Testing is eliminated in companies with physically demanding jobs, 10-15% of the applicants hired will not be physically capable of doing their jobs. And when those individuals experience a lost-time musculoskeletal injury, they will cost the employer approximately $30,000 to $40,000 per injury in direct costs alone. When you factor in the indirect costs at the most conservative multiplier of 1.2 times the direct costs, the total injury costs weigh in at a robust $66,000 per injury
Example – Both Direct and Indirect Injury Costs of Work-Related Injuries
So, let’s say you hired 100 applicants in 2021. At least 10 of them will not be physically capable of performing their jobs. Out of those 10, it’s likely that at least 7 of them will experience a lost-time injury before the year is out – multiply that by the lower end of lost time injury costs - $66,000 and you’ll pay at least $462,000.
Example - Employee Replacement Costs
And let’s suppose that of those 7 with a lost time injury, 4 of them don’t return to work - which means you’ll need to replace those 4 employees with new employees. In a warehouse environment, for example, the cost of recruiting, hiring, and training a new associate is nearly $10,000 per employee. So, the total replacement costs for 4 new associates would be approximately $40,000, which brings the total costs (Injury Costs + Replacement Costs) to $502,000!
How much new revenue is needed to replace the total cost of work-related injuries?
Now let’s say your organization’s profit margin is 3%. If you use the OSHA “Safety Pays” calculator, you’ll find that based on the sample numbers above, your company would have to generate approximately $14.7M in additional new revenue to cover the injurie costs alone – not to mention the replacement costs. https://www.osha.gov/safetypays/estimator.
Rethinking the “fog a mirror” Approach to Hiring.
Did you generate $14.7 in additional revenue by hiring those 7 people that were injured? If you did, great. Your organization broke even.
But if you didn’t generate that additional revenue, what did you really accomplish? Not much is the answer. Not to mention the headache you’ve created for the safety team and frontline management and the pain and suffering you’ve caused the injured workers.
For most organizations, the answer is that “hiring anyone who can fog a mirror”, without physical abilities testing is a lose, lose, lose situation.
Possible Solutions to the Dilemma
We understand the sense of urgency facing your organization – you need to satisfy the production requirements of your clients. However, we wonder if you can use this challenge to create some unique responses for your company. Here are some possible solutions.
Use pre-hire Physical Abilities Testing for placement, not selection. If you have jobs that vary according to the intensity of the jobs’ physical requirements, use the Pre-Hire Physical abilities testing for placement. For those who can do the heavier work, place them there. While those that are less physically capable get placed in the lighter duty jobs.
Use pre-hire Physical Abilities Testing to identify applicants for a more gradual work acclimatization. Some companies use pre-hire Physical Abilities Testing to determine who those who would benefit from working a shorter shift during the initial weeks of employment so that they can gradually build up endurance for work. Other companies assign workers to tasks requiring less lifting and gradually increase the intensity of the workload over the first few weeks.
Use pre-hire Physical Abilities Testing to identify those who might benefit from a pre-hire work conditioning program. Some organizations use the pre-hire Physical Abilities Testing to see who would benefit from combining the lighter duty work with some time in the company fitness room, perhaps working with a trainer. Over a period of several weeks, these associates gradually build strength and cardiovascular stamina to better tolerate the heavier work and therefore be less apt to experience a work-related injury.
Is Physical Abilities Testing Worth It?
Previous ErgoScience pre-hire Physical Abilities case studies have shown that on average across a variety of industries (see graph below), our post-offer/pre-hire Physical Abilities Testing yields a 73% decrease in work comp costs over the first 1-2 years of testing.
Whether you use post-offer/pre-hire Physical Abilities Testing for selection, placement, acclimation or conditioning newly hired employees, your organization will come out ahead – way ahead - of fogging mirrors.
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