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A well-implemented total absence program is a win-win for everyone. For employees, it can streamline the process for reporting claims, close the gaps in getting paid and get them back to work more quickly. On the company side, total absence management offers savings of 10-30%, increased productivity and a happier, healthier workforce.
The Case for Absence Management
In today's tight labor market and competitive environment, employers are pressed to find new ways to improve profitability and shareholder value, while at the same time addressing recruitment, retention and productivity issues.
Let's begin by looking at the workforce landscape, which has pushed total absence management into the spotlight: Unemployment rates are the lowest in 30 years. Aggressive competition and low inflation make it nearly impossible for companies to raise prices. Employee wage rates and employee health care and workers' compensation costs continue to rise. The workforce is aging-and with aging comes more disability and illness.
Employers are responding to these challenges by working hard to control costs for nonoccupational disabilities beginning with the first day of absence. Most employers have focused on issues such as safety and return to work on the workers' compensation side for years but have handled them more informally on the nonoccupational side. Now they are broadening their approach to ALL work- and nonwork-related conditions under the umbrella of "total absence management," which includes paid and unpaid leave, incidental absence and salary continuation.
A total absence management program helps prevent employee absences before they occur, helps manage absences (occupational and nonoccupational) when they occur, and keeps valued employees at work and productive. It looks at employee absence in a broad context: Is the absence due to family issues, personal illness, stress, an accident? Employees often miss work because of supervisor or work-life balance issues, and this affects productivity, so it's important to look at absence holistically.
To effectively manage absence, employers should control (and own whenever feasible) medical management and return-to-work decisions, including Family Medical Leave Act (FMLA) and Americans with Disabilities Act (ADA) requirements, while using vendors for turnkey administration. (The exception to this is employee assistance programs (EAPs), which can be effectively insourced or outsourced.) Employers often dismiss insourcing because they don't realize the cost/benefit ratio or they want...