Downsizing Can Push Up Worker's Comp Claims

Even with fewer employees, downsized companies are facing sharply higher workers' compensation costs. That's the finding of a survey of 177 companies conducted for the American Management Assn. by the consulting firm of William M. Mercer Inc.

Some 55 of the companies surveyed reported cutbacks in their work forces in recent years, with the average decline registering 13% over the past 15 months. Of the shrinking companies, one of three said their thinner employment levels have actually led to a greater incidence of workers' comp claims - that is, the percent of their workers filing such claims rose in the wake of downsizing. "The anomaly," explains a Mercer consultant, "results from increased injuries sustained by surviving employees, many of them older workers, who assume unfamiliar jobs."

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