Pension & Benefits News Number of U.S. employers prioritizing leave management nearly doubles since 2014
Tuesday, July 2, 2019

Number of U.S. employers prioritizing leave management nearly doubles since 2014

By Pension and Benefits Editorial Staff

More companies than ever are prioritizing leave management, according to the Guardian Absence Management Activity Index from the Guardian Life Insurance Company of America. The study shows the proliferation of new and proposed state paid family and medical leave laws has focused employer attention on compliance and absence policies, and companies continue to step up their absence-management efforts.

Compared with the 2014 study, nearly twice as many companies say their senior leadership places a high priority on leave management and reducing absenteeism. Guardian also found employers are more mindful of the federal and state Family and Medical Leave Act (FMLA), the Americans with Disabilities Act (ADA), and statutory disability, workers' compensation and leave laws, and are working to design their absence plans and policies accordingly.

The study uses an index, designed in 2012, that reflects the level of employer activity on 10 elements of an absence management program. This year's study found the average index score for all employers surveyed increased 14 percent from two years ago and is up 35 percent from 2012. A greater proportion—47 percent of employers—achieved either "Advanced" or "Leader" status based on their index scores, compared with 22 percent in 2014.

“Employers are continuing to refine their approach to absence management and they're making this a business priority," said Marc Costantini, executive vice president, commercial and government markets, Guardian. “Whether it's pressure from new regulations, a recognition that absenteeism hits the bottom line, or simply trying to create a better experience for employees, companies are taking action.”

Employers, particularly small firms, continue to improve leave management programs. Increasingly more complex state leave laws are contributing to the uptick of employer activity in adopting new and best practices to manage absenteeism and improve compliance. The study showed that small- and medium-size employers, especially those with fewer than 250 employees, have made the most progress. For example, more small employers are centralizing their FMLA and short-term disability (STD); up 35 percent since 2016 among firms with 50-99 employees.

Moreover, firms with fewer than 1,000 employees have achieved the most significant gains on the Activity Index since 2014. They are strengthening their documentation and return-to-work policies as well as striving for consistency across the organization. And, the percent of small firms (50-499 employees) now considered "highly advanced" in their leave management practices has doubled since 2014 (43 percent vs. 19 percent).

Benefits integration is on the rise. As employers expand the range of benefits to meet increased workforce demand, more employers are streamlining the management of leave-related benefits with a single internal department or vendor. Guardian's study found, in the past four years, more employers are integrating benefits, such as short-term disability (STD) and FMLA with long-term disability and health management programs, like employee assistance programs (EAP), health-risk appraisals, and disease management. In fact, since 2012, the percentage of employers centralizing their STD and FMLA administration has doubled.

Organizations with a higher level of benefits integration not only report a better employee experience compared with those with low to no integration, but they are also more likely to cite improved productivity and reduced time off. For example, employers with a high level of integration report an 80 percent increase in productivity compared to 65 percent of employers with a low level of integration.

Increased focus on employee experience. Employers have also made leave management an employee-centric process by establishing clear, concise and consistent absence policies while emphasizing benefits integration, which is key to the employee experience. Guardian's study found organizations that focus on the employee experience see a reduction in absenteeism (76 percent) and also achieve better overall employee experience (83 percent).

This year's study confirms U.S. employers continue to make progress in absence management and have prioritized taking a holistic approach through broad benefit offerings, a high degree of centralization and an underlying focus on the employee experience.


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