The Financial Impact of Post-Pandemic Social Trauma

Social trauma is a public phenomenon that occurs as a result of a population enduring event involving widespread loss and uncertainty over a period of years.

In 2022, Nature magazine published findings that indicate Social Trauma Engages Lateral Septum Circuitry to Occlude Social Reward (Source: https://www.nature.com/articles/s41586-022-05484-5) which means that in humans, traumatic social experiences can contribute to psychiatric disorders. It is suggested that social trauma impairs brain reward function such that social behavior is no longer rewarding, leading to severe social avoidance. This brain effect has already created documented trends in business such the Great Resignation Quiet Quitting, and the continued desire for Work from Home.  We suspect that a wave of insurance claims will be next.

Social Trauma Fueled Quiet Quitting and the Great Resignation

Brain researchers show that Social Avoidance manifests across a host of psychiatric illnesses,

including disinterest in social contact to negative emotional states evoked by social encounters. Businesses have experienced these illnesses in the form of the Great Resignation, Quiet Quitting, and the extreme desire for continued work from home.

To put it simply, the things that used to motivate people aren’t working because their brain wiring was physically changed by long-term, extreme stress and trauma. This isn’t an easy problem to fix – actual brain structure changed for most of the population. The structural change manifests in employees being unable to feel rewarded by social rewards such as social proximity, social interaction and social recognition.

A second behavioral consequence of Social Trauma is a remarkable lack of social curiosity. This may explain the large swaths of employees who simply “Quiet Quit” instead of seeking new employment — this could be a manifestation of social inhibition combined with a lack of social curiosity.

As we can see, already the financial cost of Social Trauma has been high.

Fueling Claims Activity

Employers have been understanding, for the most part during 2021 and 2022 but by 2023 mounting financial pressures are causing employers to take more aggressive action to re-engage their teams, either by forcing a return to office or re-structuring their teams. A lot of non-voluntary employee turnover has already taken place.

However, looking at studies on trauma and the brain, the employee pool might not be on the same page with their employers. One metric to examine as Return to Work programs launch is the corresponding number of insurance claims for PTSD, CTS or soft tissue / suspicious injuries. If employees are forced into a social situation that they are unready for, they may strike back with difficult-to-substantiate insurance claims to maintain their social separation and soothe the social anxiety that results from prolonged Social Trauma.  As employers attempt to move back to ‘work as usual’ an eye toward claims exposure is recommended.

If an employer sees a rise in questionable claims, a social media scan may be able to shed some light on the employee’s motivation or general mental state – which could help mitigate the claim or provide direction on how the company proceeds.