Smart Business Magazine, November 2017

INSIGHTS INSURANCE RISK MANAGEMENT A tale of two risks Critical risks in the energy industry and what to do about them T he energy sector seems to be doing well especially in the Pittsburgh market But with that upswing comes two challenges that growing employers are facing staffing shortages and increasing automobile insurance rates While these challenges arent limited to the energy industry nearly all companies in the sector are struggling with them says Tony DeRiggi area vice president at Arthur J Gallagher Co Smart Business spoke with DeRiggi about what hes hearing from the energy industry and ideas for managing these challenges Why are energy companies having trouble finding employees As these companies grow theyre struggling to find good people Certain jobs are especially hard to fill such as welders or drivers with a commercial drivers license CDL Most people who are skillful and have experience are already working Many of the younger generation those ages 22 30 arent choosing to do these jobs even though they pay very well With difficult physical jobs many of the potential candidates willing to perform them have challenging work history issues such as a DUI a history of quitting jobs or they havent been working The hiring company may be afraid that if it invests the time for new hires to get drug tested and trained they may end up quitting Its a balancing act managing turnover while striving for an acceptable return on investment While this is a problem across the board the energy companies that didnt downscale as drastically during the downturn rebounded quicker Obviously businesses couldnt pay for more people than needed but when the energy sector turned around there was a bit of a hiring frenzy The people 40 Smart Business Pittsburgh November 2017 WEBSITE Learn more about Arthur J Gallagher Co s Pittsburgh office at www ajg com locations pennsylvania pittsburgh with the most favorable employment history were picked up first and now theres not enough qualified people in the talent pool How can companies overcome these staffing shortages Employers can get creative about finding candidates and increase recruiting efforts Training and mentoring programs may need to be improved Experienced employees can record detailed videos for operating important heavy equipment for example or rotate assignments to broaden experience and increase knowledge transfer Consider adding programs to make your organization a more attractive destination This includes flexible schedules paid time off child care employee assistance programs and a total rewards program that incorporates an attractive compensation and benefits bundle with the promise of potential growth in the company Whats happening with automobile insurance rates What can companies do about it In general insurance companies are charging higher rates for any type of automobile exposure it doesnt matter if a business has heavy trucks or small vehicles on the road The reason for the increase is more frequent and more severe accidents than history would predict which is largely attributed to distracted driving Every company should implement handsfree driving and Bluetooth devices Many companies dont allow handheld devices in the car Some have rules where employees arent allowed to answer their cellphone Bluetooth or not while theyre driving A few companies have added technology such as Lytx or GreenRoad to help safety ratings These fleet safety solutions are usually used for commercial vehicles because its an investment per vehicle They score drivers and let them know when they accelerate too fast swerve speed or hit the brakes abruptly The problem is if a driver slams the brakes to avoid a deer its a ding on the score However this technology should bring down close calls and accident claims Whether or not a company invests in safety technology employers can create bonus structures for safe driving with different award levels If someones score is low enough management can move them to a different job or provide additional training If a companys driving record improves insurance companies will notice That requires a strong fleet safety program with management support ongoing supervision driver training and ongoing education vehicle maintenance and accident investigation As a safe risk insurance companies will be more inclined to compete for your business even in a market where rates are generally rising TONY DERIGGI Area vice president Arthur J Gallagher Co 724 816 2921 tony_ deriggi@ ajg com Insights Insurance Risk Management is brought to you by Arthur J Gallagher Co INTERVIEWED BY JAYNE GEST