A Road Map to Creating a Successful Absence Management Program
by Gene LanzoniMr. Lanzoni is assistant vice-president, Thought Leadership, Group & Worksite Marketing at The Guardian Life Insurance Company of America. Visit guardianlife.com
Reducing absenteeism and its effects on an organization are among the most significant challenges facing employers today. Developing an effective absence management program can help ease administrative burdens, ensure compliance with complex state and federal leave laws, and increase productivity, ultimately producing a positive impact on a company’s bottom line.
Today, about 8 in 10 U.S. employers are making efforts to manage leaves and improve productivity.1 However, most companies say their efforts have yet to make a significant impact on achieving their goals, such as increasing return-to-work rates, reducing lost time, or decreasing overall absenteeism.
Certainly, the wider availability of third-party expertise and technology to support in-house activities, as well as increased outsourcing, are making it easier for employers to get started on the path to more effective absence management practices.
Still, challenges remain for many employers, including:
- Keeping track of intermittent FMLA leaves and interpreting Federal and State leave laws
- Ensuring fitness for duty before returning employees to work
- Applying the ADA (ADA) and ADA Amendments Act
According to the latest Guardian Absence Management Activity Index & Study, firms with 100 – 1,000 employees are more likely than others to be in the early stages of their absence management journey – and they struggle the most with self-administering their FML programs. In addition, they are more likely than other employers to be handling most or all of the administration with in-house resources.
Guardian research shows that employers outsourcing at least their FMLA and STD tend to report more positive outcomes.
- Nearly half (46%) of those that outsource their STD and FMLA administration report achieving 5 to 6 positive outcomes – a much better result compared to those not outsourcing (16%) or outsourcing only STD and not FML.
For employers looking to establish an absence management program, or for more experienced employers seeking to enhance their existing programs, there is a four-step approach associated with success:
Set a Solid Philosophy
An organization’s underlying philosophy is often associated with its early decisions; therefore, setting clear and measurable objectives when initially mapping out a leave management strategy can be critical to success.
Specifically, employers tell us that when launching an absence management program, a high priority should be returning employees to safe and productive work. This goal serves as a beacon for the organization’s overall absence management philosophy and can guide subsequent activities. Encouraging overall employee health and wellness should be a second priority, as workforce health is highly correlated with productivity and leave management success.
Of course, for many companies a top priority is ensuring that their handling of FML is in compliance with federal and state laws. This can be of even greater importance among organizations with employees located in many multiple states, as well as smaller firms and those with limited in-house HR/benefits resources who have more difficulty keeping up with changing state and local leave laws.
Take Key Foundational Steps
Employers surveyed believe that obtaining senior management buy-in and adhering to a clear communication strategy are also key to building a successful strategy.
For example, large employers may prefer to implement their program in a phase manner and conduct pilots in order to demonstrate the potential for return-on-investment and to gain broader support among senior leadership.
Other organizations make a compelling business case for outsourcing by focusing on the re-allocation of internal resources or mitigating the risk of non-compliance. They underscore the benefits of leveraging the expertise, processes and technology of an external partner to more efficiently and effectively manage the firm’s leaves.
At the recent Integrated Benefits Institute Annual (IBI) Forum in San Francisco, Steve Coffman, Senior Life & Disability Practice Leader at Guardian Life, spoke about the importance of clearly communicating roles, responsibilities and timelines when an employer is working with one or more external partners.
“Making sure that everyone is clear on their specific roles is critical because for first-time outsourcers, the process is new and any assumptions based on how things were handled in the past no longer apply. Getting all parties on the same page from the outset greatly increases chances of a successful implementation.”
Develop an Effective Model
Another key consideration is the type of model to implement. Guardian research shows that outsourcing FML administration produces more positive outcomes than managing the process in-house; outsourcing both STD and FML produces even greater success. In addition, using the same STD resource for FMLA (whether internal or external) is a key predictor of achieving positive outcomes.
Finally, identifying clear and practical metrics which tie back to agreed-upon program objectives should be established early on for the best possible chance of success.
Setting specific targets for improvement in traditional areas such as return-to-work rates, lost time, and overall absenteeism can help to quantify the ROI of a leave management program.
But according to Guardian research, employers believe one of the most critical measures of absence management success is employee engagement given its linkage to productivity and positive outcomes (e.g., engaged employees miss fewer work days and have stronger performance).
Organizations that are among the most advanced in their absence management activity tend to receive higher employee engagement and productivity scores. They also tend to achieve greater progress on the following:
- Consistent administration
- Better tracking or reporting
- Reduced costs
- Easier administration for the organization
- Improved compliance
The ability to achieve more effective, efficient and compliant absence management practices is no longer restricted only to the largest U.S. employers. Smaller firms – with fewer than 1,000 or even 500 employees – increasingly recognize the importance of improving their leave management efforts and are now able to outsource administration to external partners with the necessary expertise and technology.
Best practices of employers that have successfully launched absence management strategies offer a proven path for employers looking to get started on their own absence management journey. ◊
1The 2015 Guardian Absence Management Activity IndexSM and Study https://guardianabsencemanagementstudy.com/