Is Your Company Ready for Absence Management?

It's a different way of looking at how and why people aren't at work, and how to get them back on the job as efficiently as possible. Our self-test could put you on a new and more productive road.

By Kimberly Stattner

Absence management is a comprehensive approach that integrates benefits and policy to improve employee health and productivity. In some ways, the concept seems simple and obvious. If somebody breaks a leg, shouldn't management focus on getting that worker back on the job rather than focus on whether the injury was work-related or not? On the other hand, the integration that absence management requires runs counter to deeply entrenched culture and ways of doing business.

Which way should your company turn? The test at the end of this article consists of a series of statements. Respond YES or NO to each and award yourself the points indicated. Subtract the NO points from the YES points, and your score will help you figure out where you stand.

Before you take the test, however, read through the statements and the explanations that follow. They're bound to challenge your thinking and broaden your horizon.

Senior management understands the impact absence can have on workplace productivity and the corporate bottom line.

Until recently, unscheduled absence has never really been understood as something that could be quantified and tied back to the bottom line. Many employers don't have an accurate picture of the amount and patterns of absence, and can only speculate what it is costing their organization.

Understanding the concept of absence management can grow from one of two directions: Either someone in senior management approaches the head of human resources about the impact absence has on productivity. Or, the head of HR takes the initiative to present to senior management a concept that could move the organization toward greater productivity, and the top brass are willing to entertain the idea after becoming aware of potential value.

Senior management is willing to champion changes to reduce unnecessary absence.

HR communicates so frequently with employees that unfortunately, sometimes the information goes unread. But if someone in senior management sends out a letter, employees usually give that a little more attention. So, if a senior manager, and not necessarily the CEO, is willing to step forward and share with employees across the entire organization why the company wants to reduce unnecessary absence and what it means to employees, employees will listen. And even if the change isn't significant, the fact that it's being communicated by senior management implies to employees it's something important and the company is serious about the change.

Your company's culture is able to accommodate and accept change.

Committing to absence management can trigger major changes in the corporate culture.

Consider what it would mean to your organization if you empower employees to manage their own bank of time off and tell managers not to ask, "Why do you want the time off?" but just to make sure the rest of the team meets business objectives. That's a very different culture from micromanagement all the way down the line. And senior management often cringes when they first hear the idea of a "bank of time" because it's so different than what they're accustomed to having. Most line managers, on the other hand, don't really care much about the change. To them, the reason someone needs to be away from work doesn't really matter as long as absence doesn't become a pattern, is not abusive and doesn't impact getting the job done. They understand that, for instance, a single adult may have very different but equally valid reasons to be away from work than someone who's married with children. Furthermore, not having to track the reason for an absence makes it that much easier to administer policies consistently.

Companies and people tied to the old ways, to paternalism, are likely to struggle with the implementation of absence management.

Your company recognizes the administrative and financial efficiencies to be gained from an integrated program.

Companies that have experience in integrating some other part of their business will be the first to identify value in absence management. Again, a time bank is a good example.

Suppose you have a separate vacation policy plus a personal days policy plus a sick days policy. A time bank combines all these buckets of time into one policy. Having one policy should mean it's easier to understand and administer because you're not tracking three separate data sets. From a disability perspective, an employer might be able to switch to one insurance vendor who can manage all disability claims, instead of having one vendor to manage the workers' compensation events, and another vendor to do the non-occupational disability management. To an employer, this integrated approach might mean one set of policies, one process, fewer employee relations issues, one vendor relationship so everything becomes more efficient and life is just plain easier. The best part of all is that gives you more opportunity to focus on the business instead of on shuffling paper.

That experience an also teach management to look at a broader picture. It's true for example that a time bank system can be more costly in some ways. One reason is that workers are more likely to take all the days to which they are entitled, and if an employee leaves, the employee is paid for unused days. The bigger goal, however, is not so much to reduce time off but instead to make it more predictable so that it doesn't damage efficiency and productivity. The idea is to promote scheduling so the business can anticipate and plan for absence.

Your company has or is willing and able to implement a singular, cohesive return-to-work program for all disabling events, regardless of their origin.

Here we enter the arena of corporate politics. Workers' compensation is often owned by risk management, while non-occupational disability is owned by the benefits department. They frequently report to different managers or levels within an organization and have different financial incentives.

It seems that from the inception of time workers' comp expenses have been charged back to a location, where the managers may be financially impacted (loss of bonus money) for poor performance and rewarded for top performance. Non-occ is not charged back, often because locations can't influence injuries or illnesses that happen away from work. They are therefore more focused on workers' comp and willing to do more for the work injured. Unless benefits and risk managers report to the same person, you often end up with two different approaches to a problem — an unscheduled absence — that has the same impact on productivity and the bottom line.

Your company's time-off programs are designed to provide financial incentives and other support for returning to work as quickly as possible.

Carrots and sticks are important to all aspects of any time off program, whether it's sick time, a paid time-off bank, salary continuance, short- or long-term disability or workers' compensation.

The carrots include return to work programs that appeal to the best side of our nature and help us get back to feeling like fully productive members of society as quickly as possible.

The sticks are generally financial. They shouldn't be punitive, but they've got to be energizing. This is particularly true in dealing with the rising number of subjective claims. An employee says: "I ache. I hurt." There might not be a medical test to support or refute the claim, but a doctor rules it valid. (Mental health claims can easily fall into this nebulous territory.)

If you can't really refute someone's aches and pains, then you won't likely deny disability, but you can expect design of your benefit program will influence how long that person stays away from work. If you pay 100 percent of salary, you can expect the employee to be out for as long as the doctor suggests. Pay 60 percent and you will have established a financial motivation to return sooner, or at least work part time.

Your company's disability determinations and durations are effectively managed.

For many companies, there is little to no management of short-term claims. An employer should seek objective third party review of disability claims information. The review doesn't necessarily need to be outsourced, but it shouldn't be rubber stamped by the employee's supervisor. Close working relationships, whether good or bad, can interfere with a supervisor's objectivity, not to mention very few supervisors will ever have a clinical background to interpret medical information accurately. At the other end of the spectrum, hypercritical review of being ‘bent on denial' is not effective management either. Effective management is thorough and fair — and also flexible. An employee's need for time off may be legitimate even without obvious clinical evidence. Perhaps though, that worker shouldn't be put on disability, when vacation time or a leave of absence would do the trick.

Your company has active, independent return-to-work programs for both occupational and non-occupational disabilities.

This is a key question. Your company is far along on the road to absence management for maximum productivity — and probably steps ahead of your competitors — if programs are in place for both types of disability. In many organizations, the benefits side of the house hasn't even begun to take up the challenge of getting people back to work as quickly as possible when they are ill or injured on their own time.

Your organization currently can, or is willing and able to, consolidate all aspects of managed disability and workers' compensation.

Is the risk management side willing to play nice with the benefits side? Can both adopt a bipartisan approach of program and policy, and acknowledge the potential benefit to employees and to the organization? Is there mutual understanding between the owners of these independent programs? Finally, is all of this backed by a corporate culture that supports process and policy change?

Kim Stattner is national practice leader for disability consulting for Hewitt Associates. She can be reached at kim.stattner@hewitt.com .

Is your company ready for absence management?

Source: Hewitt Associates

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More Business & Health Articles on This Topic:

Managing the Guy Who Isn't There (Nov./Dec. 2000)

Time-Off Benefits that Give More Bang for the Buck (September 1996)

Integration: The Case for Blended Benefits (April 1998)

It Takes a Pro to Solve the Puzzle (Feb. 1, 2000)

The New Direction in Disability Management (Jun, 1999)

Resource Links

Hewitt Associateshttp://was.hewitt.com/hewitt/

Integrated Benefits Institutehttp://www.ibiweb.org/

Kim Stattner. Is Your Company Ready for Absence Management?.

Business and Health

2003;1.