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Employers today face significant challenges in managing the absences of their employees. On any given day, up to 30 percent of a company's workforce can be out because of an illness, injury or a federal or state job-protected leave of absence, according to the latest Commerce Clearinghouse Annual Absence Survey.

Such absences accounted for more than 1.2 million cases that required days away from work in 2009, according to the U.S. Bureau of Labor Statistics. The total cost of absence runs more than $100 billion per year, according to a November 2010 BLS estimate.

That is why risk managers and chief financial officers are giving absence management a closer look, and it is a very high priority. But managing absence is not only costly for organizations, it is also complex.

THE PROBLEM

"Basically, employers know employee absence is a problem," Savage said. "But they don't understand all the reasons behind absences, or if there are any trends related to those absences. Many don't even know how many employees are out on any given day."

One of the biggest problems with not having an exact handle on the absences in one's business, she said, is the possibility that myriad job-protected leaves of absence are not being managed appropriately, potentially leaving the employer with disgruntled employees.

Since the federal Family Medical Leave Act (FMLA) was passed in 1993, individual states have passed leave laws. In addition, companies are challenged to manage intermittent leaves. When asked about the challenges in FMLA administration, a majority of respondents in Mercer's 2010 Absence and Disability Management Survey (54 percent) cited tracking and administering intermittent leave -- even though intermittent leaves account for just 8 percent of all leaves.

At the same time, employees are becoming more knowledgeable about their rights under state and federal leave law. According to The Hartford's 2011 national survey of 1,000 full-time workers, 70 percent of survey respondents said they have a "high level'' of understanding of the FMLA.

THE SOLUTION

Employers are finding there are advantages to implementing an integrated absence management solution. In fact, 56 percent of U.S. companies plan to implement absence management within three to five years, according to the 2010 Emerging Health Trends Survey by Hewitt Associates. Employers that have an integrated program said they have saved 11 percent on lost time, direct costs and return-to-work rates, according to the 2010 Employer Survey of Integrated Disability, Absence & Health Management by Spring Consulting Group.

In that Spring research, employers said the top six advantages to integrated programs are:

--consistent administration,

--better tracking and reporting,

--reduced costs,

--increased control,

--improved compliance, and

--easier or better experiences for employees.

Insurance carriers have responded to this trend by offering more integrated product offerings. For example, The Hartford offers The Hartford Productivity Advantage, which handles absences related to short- and long-term disability, workers' compensation, plus federal, state and agreed upon company-related leaves of absence.

"In today's economy, employers need each and every worker to be as productive as possible, and employees want to live active and productive lives," Savage said. "An integrated benefits solution can help both employers and their workers achieve their goals."

(The above piece is part of our continuing Perspectives series designed to highlight key products and services to our readers. This paid-for Perspective was written and edited by Risk & Insurance® on behalf of our marketing partner. Additional Perspectives can be found on our Web site at www.riskandinsurance.com/.)

August 1, 2011

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