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    Safeguarding in the spotlight amid widespread US labor shortages

    Christina Herald, Executive Risk Underwriter, and Harriet Turner, Executive Risk Underwriter.

    As the US enters a third year of the COVID-19 pandemic, ongoing labor shortages are challenging many employers and organizations. While the primary focus for these businesses is being able to deliver goods and services, for organizations that interact with children and/or vulnerable adults, such pressures and changes can create additional challenges around managing the risk of inappropriate sexual conduct and responding quickly and effectively if such events do occur. It is essential that organizations reassess their policies, procedures and risk management practices in light of such challenges to ensure they remain fit for purpose.

    Numerous factors underlie the ongoing labor supply issues. The workforce has not returned to pre-pandemic levels and many parts of the US economy are reporting historically high job vacancy rates. The National Federation of Independent Business, which is the largest small business association in the US, reported that a record number of businesses surveyed had open positions they could not fill in September1. This is due to people who withdrew from the workforce not returning, as well as people leaving their existing employment, either for alternative jobs or entering retirement. This phenomenon has been dubbed “the Great Resignation2”. Most commentators suggest that it will take considerable time for these trends to resolve and for the labor market to return to stability. Many feel that permanent structural changes are happening.

    While much of the focus has been on the impact of labor shortages on the retail, hospitality and transportation sectors, the core sectors where we see demand for sexual molestation liability (SML) insurance are also facing significant problems. Education, in particular K-12 schools, is faced with a number of challenges. Teaching staff is reportedly burnt out after a prolonged period of online learning, there are ongoing controversies around vaccination, masking and curriculum content, and major constraints amongst support functions. A piece in the New York Times3 highlighted the issues confronting schools nationwide around the recruitment and retention of school bus drivers and cafeteria workers. While recruiting for such roles has been difficult for many years, the pandemic has only intensified the situation. For example, another New York Times piece highlighted the problems many schools are facing with recruitment of substitute teachers and the consequent dilution of recruitment standards some school boards are introducing4. Schools and administrators are therefore under unprecedented pressure to find and deliver solutions at a time when they are feeling overwhelmed by a wide range of continuing challenges.

    Many of the same themes and pressures are prevalent in other core sectors requiring SML coverage, notably healthcare, transportation and leisure. Those responsible for recruitment and risk management within organizations weathering these difficulties should consult and liaise to ensure that appropriate safeguarding standards and procedures are maintained, reinforced and communicated.

    Working with our risk management partner, Praesidium, we have set out key safeguarding risks and exposures created by the current challenges and some potential mitigating actions:-

    • As recruitment processes are coming under increased strain, there may be pressure to dilute standards and requirements to widen the pool of available candidates and to expedite filling roles.
      Safeguarding tip: Maintain strong screening and selection practices designed to screen for abuse risk is an organization’s first line of defense in controlling who has access to children and vulnerable adults.
    • To deploy new staff to frontline roles as quickly as possible, there may be pressure to shorten or forego onboarding or training around safeguarding issues. Similarly, there could be pressure on the delivery of ongoing safeguarding training and monitoring due to personnel shortages or timetabling limitations
      Safeguarding tip: Everyone should receive annual training that addresses the prevention, detection, and response to abuse as well as the organization’s policies. Consider a blended learning approach with scalable and flexible training delivery formats such as online courses combined with brief in-person meetings and reminders.
    • Staff may be redeployed, often at very short notice, into new or additional roles and functions and appropriate training and monitoring could be compromised. This has the potential to increase the risk for adult-to-consumer and consumer-to-consumer activities due to the potential for decreased or compromised monitoring and supervision
      Safeguarding tip: Remember to integrate role-specific training for all team members. Supervisors should also incorporate structured check-ins, program observations, and consider surveys as a means to gather valuable feedback from consumers and their families.
    • As experienced staff retire or move on and where there is significant churn amongst a workforce, a lot of knowledge and experience about safeguarding practices and procedures could be lost or compromised and it is essential that such knowledge is captured and stored. (Re)assignment of roles and responsibilities for safeguarding checking, training, and reporting policies and procedures should be kept under close review.
      Safeguarding tip: Prevention must be institutionalized across operations, locations, and programs. Organizations that truly maintain a culture of safety embrace change and ongoing improvement and have mechanisms by which they can continuously learn from successes and failures.

    As the US continues to emerge from the pandemic, many sectors face a range of new challenges linked to labor shortages and structural changes to the workforce and working environments. Alongside managing a range of other issues, employers need to place the safeguarding of children and vulnerable adults at the core of their response. In doing so, they should seek advice and resources from experts as they adjust to the altered environment, as well as ensuring that they have access to effective support services and risk transfer mechanisms.

    References

    1. Business Insider, 8th October 2021 (Labor Shortage: 92% Small Firms Cite Lack of Qualified Job Applicants (businessinsider.com))
    2. Bloomberg Businessweek, 7th December 2021 Why People Are Quitting Jobs and Protesting Work Life From the U.S. to China - Bloomberg
    3. New York Times, 16th September 2021 (Schools Are Seeing Shortages of Bus Drivers, Cafeteria Workers and Other Essential Roles - The New York Times (nytimes.com))
    4. New York Times, 11th November 2021 (Substitute Teachers Never Got Much Respect, but Now They Are in Demand - The New York Times (nytimes.com))

    Disclaimer:

    The descriptions contained in this communication are for preliminary informational purposes only. Coverages are underwritten by Beazley syndicates at Lloyd’s and will vary depending on individual country law requirements and may be unavailable in some countries. Coverages are available in the US only on a surplus lines basis through licensed surplus lines brokers. The exact coverage afforded by the product(s) described in this communication/brochure/factsheet is/are subject to and governed by the terms and conditions of each policy issued. The publication and delivery of the information contained herein is not intended as a solicitation for the purchase of insurance on any US risk.

    About the author:

    Christina joined Beazley in June of 2009. She is an Underwriter for public company and private company directors and officers liability, employment practices liability, fiduciary liability and oversees the South region in respect to these products. Christina is also US Product Lead for Safeguard, Beazley's sexual misconduct offering. She started in Beazley's New York office and moved to London in 2011 as an Underwriter at Lloyds. She moved back to Atlanta in 2015 as part of Beazley's regional growth strategy. Christina graduated from Vanderbilt University with a degree in Business and Financial Economics.

    Christina Herald

    About the author:

    Harriet joined Beazley in May 2017. Harriet is an Underwriter within the Cyber and Executive Risk division, underwriting various coverages including Safeguard (Sexual Molestation Liability,) Employment Practices Liability, Private D&O and Fiduciary. She became ACII qualified in 2020 and subsequently became a Chartered Insurer in 2021. Prior to joining Beazley, Harriet was on a Lloyd’s of London talent scheme as an apprentice.

    Harriet Turner
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