[Connecting The Dots - Page 2]
UNDERSTANDING EMPLOYEE ABSENCE
For a multitude of reasons, employees miss work. Employers know it, and managers plan for it. Indeed, corporate benefits packages are designed to ensure that employees can take time away from work without significant financial impacts to the employee.
However, the costs of employee absence continue to rise, in part, because employers are trying to do more with less. The workforce is aging and shrinking, productivity pressures are increasing, and absence rates are rising. These factors, and others, create an environment that leads to increased absence. And each of these factors must be managed in the context of a broad array of complex programs that fall under the absence umbrella. A short list of absence categories includes:
• Short-term Disability
• Long-term Disability
• FMLA
• Workers’ Compensation
• PTO/Sick Leave
• Vacation
• Jury Duty
• Bereavement Leave
• Military Leave
• Education Leave
Making matters even more complex, of course, is the reality that different employee populations – salaried, hourly, union, non-union – have different levels of eligibility and access to these programs. And the costs for each population vary by program as well.
None of these programs is new, and there are controls built into each of them. However, various combinations of these programs are managed by different departments in many large organizations. And the data relating to each program is often stored in its own database.
This silo approach – organizational and technological – makes it impossible to see the full picture: to identify duplication, to recognize employee migration from one program to another, to limit variation in the ways the programs are managed, to effectively coordinate return to work programs, and to measure whether an employer’s absence programs are working.
Consider this example. A Fortune 100 freight delivery company was concerned about the impact of absence on its overall productivity. Additionally, management wanted to know whether their temporary return to work programs were having any positive effect on absence and productivity. Following a 28-month study1 of 507 workgroups that included disability data, sick leave data, workers’ compensation data, temporary return to work results, and productivity data, the firm was able to quantify the cost impact of absence on productivity - $285 million per year. And the value of its temporary return to work programs? Nearly $170 million per year in productivity savings.
Neither of these findings – the cost of absence nor the effectiveness of absence programs – would have been possible without an integrated approach to absence management.