The current economic crisis has increased the stakes for HR/benefits professionals to manage the staggering financial impact of employee absence. More than $100 billion is lost each year to absenteeism, according to the Department of Labor.
The potential impact of employee absence is large because any time away from work hits a business’s bottom line twice. First are the direct costs associated with the absent employee, such as continued salary and benefit payments. Second are the indirect costs, such as temporary replacements or overtime for the existing workforce.
These costs can add up quickly. In fact, the average employee lost-time claim costs more than $19,000 in medical expenses and indemnity payments, according to the Department of Labor. Better management of employee absence is one good way to support the bottom line while improving employee productivity and morale.
A panel of HR pros recently participated in a series of meetings to describe their uses of data and metrics to manage employee absence. Cosponsored by The Disability Management Employer Coalition and Liberty Mutual, these discussions brought together more than 80 HR professionals to discuss their best practices to manage employee absence.
Among the best practices that emerged from these meetings:
>> Amass data.
Absence management can’t succeed until the problem is defined, current performance is understood and milestones are set to measure progress. There are many good sources of data, including payroll systems and reports. Look for sources that provide specific details about why employees were away from work and how much time they missed.
>> Secure senior management buy-in.
Nothing gets support and drives change like a champion at the top. The likelihood of getting senior support to reduce employee-absence costs is far greater in those organizations that value safety, employee health and fitness and return-to-work. Understand what motivates your leadership and build the business case for change.
>> Use management support and hard data to build and launch an absence management program tailored to your organization’s particular needs.
As part of this plan, understand the role your absence-related vendors can play.
>> Influence what drives absence. Understand the range of behaviors that affect employee absence, such as smoking, obesity, depression, alcoholism and stress.
Explore incentives and disincentives to address this behavior. Incentives that have been successful include onsite fitness centers, smoking-cessation programs and weight-loss classes.
>> Get employees involved. Employees must understand your company’s commitment to help them stay healthy and return quickly anytime they’re out.
Take every opportunity to set and reinforce this commitment, from new-employee training programs to company newsletters and paycheck stuffers.
>> Benchmark progress.
Beyond measuring the success of your absence management program, compare your performance to your peers. Choose your competitive set to match the unique needs of your company’s industry, location, employee background and regulatory environment.
These best practices will help you better control the cost of employee absence, both in the current downturn and when the economy rebounds. More information on these tips Ā including a white paper, webinar and downloadable podcast Ā are available at www.libertymutualgroup.com/leadershipseries.
Marcia Carruthers is the CEO of the Disability Management Employer Coalition, a nonprofit organization that aims to advance integrated absence and disability management. Nazneen Vimadalal is vice president for marketing and product at Liberty Mutual Group Benefits and a member of the DMEC Executive Advisory Board.
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