What Staffing Shortages Mean for Human Services Organizations

Human service organizations play a critical role in our communities, making an important difference for the populations they serve. With demand for their services higher than ever, many human services organizations are facing staffing challenges — especially those providing direct client care to children, elderly, individuals with developmental disabilities, and those vulnerable to substance abuse or experiencing mental illness.

With organizations across the human services spectrum struggling to hire and retain staff, these organizations are facing increased exposure to liability risks.Independent agents are the perfect advisers to help their human services customers protect their businesses and those they serve.

Why the Staffing Shortage?

Coming out of the COVID-19 pandemic, retail and service operations began raising wages to compete for employees. The majority of human services organizations are nonprofit entities with relatively inelastic budgets, however, leaving them unable to match these increased wages to entice their employees to stay. Also, with the recent inflation impacting the country, a number of employees have left human services roles to seek alternate work with higher pay.

At the same time, the pandemic drove an even greater need for direct care services. For example, a recent study from ANCOR showed nearly 80% of organizations working with clients with intellectual and developmental disabilities had to turn away new referrals due to insufficient staffing — a 17% increase since the beginning of the pandemic.

The demand for mental health services also rose by 21.6% in 2021 alone, according to the Centers for Disease Control and Prevention.

With staffing shortages across the landscape, and an overwhelming need to fill this gap, some organizations may feel pressure to hire less qualified employees to fill open roles to meet the needs of their clients. However, this exposes them to greater potential liability risks and other negative implications.

Four Key Considerations for Direct Care Organizations

As independent agents work with human services organizations, it is important to keep these staffing challenges and impacts in mind to build effective insurance solutions. Below are some key considerations.

Hiring Protocols

Despite the challenge in staffing positions, it’s important that organizations follow their hiring requirements and protocols — maintaining standards, even if this may result in a less expedited hiring process. Taking this time up front can help minimize the risk of hiring an individual who isn’t a good fit or is potentially unqualified for the role.

Hiring best practices can play an important role here, and a big part of this is having proper procedures in place. A few important best practices are:

• Formal written procedures for hiring staff
• Employment applications completed by all applicants
• Personal interviews for each prospective new hire
• Verification of prior employment references, licenses or other credentials
• Comprehensive background checks on all prospective employees and volunteers
• Formal staff trainings conducted regularly, including documented training on physical or sexual abuse, recognizing signs of abuse, and reporting procedures for an incident.

Some insurance carriers offer specialized, complimentary trainings designed for their human services insureds, which can be very beneficial in helping these organizations provide training to their employees — whether its around abuse prevention or mandated reporting courses. Similarly, carriers can provide access to services that help ensure job candidates are being effectively screened before being hired.

Increased Professional Liability and Abuse Risk

Higher employee turnover often can result in less experienced employees. In environments that require a high level of attention and personalized care, this can lead to an increase in professional liability and abuse claims. A simple mistake when caring for vulnerable individuals can have devastating consequences.

For example, a client being provided care has trouble swallowing and needs to follow specific dietary restrictions to prevent choking. The caregiver turns away to assist another individual and leaves food on the table. Without the caregiver realizing it, the client who has a high risk of choking eats the food off the table, and when the employee returns the client is choking. This very simple mistake could have tragic consequences — and could all happen in minutes.

Similarly, newer employees are often unsure of when and how to report a potential abuse issue. When early reporting of a potential incident occurs, it can help address the situation quickly, ultimately helping prevent harm to clients. But when employees do not know how to report an incident, it can lead to an escalating situation, such as verbal abuse escalating to physical abuse.

There are additional increased risks in professional liability as more direct care organizations offer medical services to their clients. Some simply coordinate care, while others collaborate with healthcare entities, and some employ healthcare professionals such as psychiatrists or physicians. This creates a distinct challenge that requires specialized coverage for healthcare professional liability. If a patient brings a lawsuit due to improper care, traditional human services professional forms do not provide primary coverage for this type of medical professional on the policy.

This is typically covered by a separate medical malpractice policy, so partnering with a carrier that can offer both the broad form professional along with a healthcare professional liability policy will provide more seamless protection from a single carrier. Similarly, for abuse-related risks, there are still some forms that only offer coverage for sexual abuse, which is not the only type of abuse that these organizations face. Top agents often seek out carrier partners that cover both sexual and physical abuse.

Emerging Claims

With increased risks and the dynamics of the staffing challenges, there is also an impact on claims for direct care organizations. In recent years, some claimants have seen significant monetary verdicts, which may set unrealistic expectations around how much a claimant should be paid for a given case. This social inflation trend is being combined with attorneys who are seeking out cases with larger settlement potential, making it increasingly difficult to settle claims outside of court and driving up costs for all parties involved. When a new staff member makes an innocent mistake, this could be detrimental to the organization — not only from a claims perspective, but also from a reputation standpoint. This makes it more important than ever to have a team of experienced claims professionals who are dedicated to handling claims within this industry to help defend human services customers. Carriers that have expertise in handling these complex claims scenarios will prove to be valuable, and a true differentiator, for human services insureds.

Risk Management Resources

Taking a holistic approach to hiring is a key component of addressing potential risks. Human services organizations require specialized professional liability and abuse coverage, along with key industry-focused risk management programs and services. With many of these staffing challenges not expected to subside in the near term, agents can help ensure their insureds have the right risk management programs by partnering with carriers that have expertise in human services and offer dedicated programs and resources.

For example, valuable risk management offerings from carriers may include trainings such as abuse prevention and mandated reporter trainings. In addition, discounted background checks can be another value-add as organizations face a continual cycle of hiring new employees, helping to ensure proper vetting.

Certain carriers may offer dedicated and experienced risk consultants who can help their insureds tailor a preventative risk management program specific to the risks they face. This hands-on consultation can make all the difference in protecting human service organizations.

As these organizations navigate the challenging staffing environment, independent agents play an important role. Agents can help address the increasing risks with the right insurance protection, strong risk management strategies and effective carrier partnerships, all helping to protect their customers for years to come.