THE CASE FOR LEAVE MANAGEMENT
The current, lingering economic environment has shifted the focus of human resources and employee benefits in many companies away from retention to concentrating on improving productivity, driving down costs, and improving other returns. As organizations strive to do this, some alarming statistics have surfaced regarding employee use of benefits – specifically employee leave benefits.
A recent study found that the cost of all employee absence accounts for an astronomical 36% of an employer’s payroll (1). The questions that naturally arise are how can this be, and how can these costs be lowered? Those questions should quickly be followed by how can an employer even begin to track and manage employee absences? Can an employer really manage all of the moving parts of absence when there are so many pieces to track and when the data usually resides in several silos?
WHAT DOES ‘LEAVE’ INCLUDE?
To being to tackle the question of managing absence, we have to consider all of the elements that can impact leave. Let’s start with FML – family and medical leaves. There are 40 states with unique leave laws in addition to the federal leave statutes and regulations. Just keeping those straight is a task, but what about short and longterm disability leaves? Studies show that 55% – 70% of FML claims have a disability component (2). In addition, how many workers’ compensation claims – another type of absence event – also end up being short or long-term disability events?
Of the 35% cost of payroll issue, 26% are planned absences, which in many cases may fall under FML, but also include vacations and holidays (PTO events)3. So, in addition to managing the compliance, regulatory, and policy pieces of disability, FML, and workers’ compensation programs, HR and employee benefits managers also have to be aware of vacations, military leaves, voluntary, intermittent/casual leaves, and others, depending on company policies and benefit programs. Operations
managers also should be “kept in the leave loop” in order to schedule employee tasks and work assignments to manage their departments successfully.
Is it even possible to track all of this information? In most companies, tracking is not likely done in just one department – it’s most likely done across various locations, especially when operations managers are taken into account. Also, the various
administrative environments and systems for HR, disability and workers’
compensation are not designed to “talk to each other” and share the data necessary
to effectively track all leave types. So, how can companies track and manage leaves
to lower costs and improve productivity? What can they do to impact the bottom line?
An integrated, total leave management system can coordinate the disparate data silos, departments, and locations, capturing all the necessary leave and absence
- Track all absence and leave incidents
- Manage an employee’s leave and communicate with that employee; and,
- Return that employee to work sooner
WHAT IS A GOOD LEAVE MANAGEMENT SYSTEM?
When looking for a total leave management system, several important aspects should
Data Expertise – A total leave management system should allow your
company to integrate all types of leave data in one location and data store.
Then, trends can be more easily identified so managers have all information
necessary to best manage leaves as well as reporting capabilities that will
provide more meaningful information to senior management.
System Integration – Your total leave management system should seamlessly
integrate data from all the disparate systems in which your organization
depends to manage various leave and claim events: HRIS, time and
attendance, and claims systems across workers’ compensation, and short and
long-term disability. Those systems should feed data directly into your leave
management system, saving your HR department administrative time, providing
more complete and accurate information, and simplifying workflows.
Compliance – Your total leave management system should provide complete
and up-to-date rules and regulations of not only your company policies, but also
federal and state leave laws and regulations to enable efficient and accurate
Cost & Functionality – A total leave management system should fit your
budget and the needs of your organization. It should be an easily configurable
tool that enables your HR leave management users to be more productive with
less manual intervention processes.
Of course, employers can always continue to process their leaves across siloed
systems and environments using spreadsheets and other manual methods.
However, an integrated and total leave management system can include all of the
requirements and benefits above to ultimately help your organization return healthy
and productive employees to work sooner, reduce administrative burden, and lower
costs – affecting the company’s bottom line.
1 The Cost of Employee Absenteeism. Investor’s Business Daily, March 2010.
2 Integration: The link to Improved Outcomes in Absence Management. @Work, July 2010.
3 Absenteeism! It Costs How Much? Business 2 Business, March 2010
© 2010 OCI® All rights reserved. www.oci.com
OCI is a data Integration and software services provider that helps companies make
better-informed decisions about their employee benefit and risk management
programs. OCI has designed and delivered integrated health and productivity
solutions to Fortune 1000 companies since 1984. Today, OCI is alone in its unique
combination of true data integration and technological acumen. OCI’s administrative
structure allows for quick decisions, rapid senior management involvement, when
necessary and low overhead costs.
OCI’s newest product, LeaveXpertTM, integrates HR and leave data into a single webbased
solution that simplifies the way you work – and saves you money. With an
easy-to-use interface, legal compliance tools, case details, and real-time reporting,
OCI’s LeaveXpertTM assists HR departments reduce administrative burden, improve
legal compliance, returne employees to work sooner and imporove ROI.