Employers Want to Reduce Impact of Absenteeism on Operations

In today’s downsized workforces, unscheduled employee absences can create significant drag on productivity. The report found that employers who link their absence programs to health management initiatives are having success in better managing unscheduled absences.

Among their key findings, Mercer reported:

• Reducing the impact of absence on operations and improving Family Medical Leave administration are each a “top-three priority” in absence management for nearly half of respondents.
• Outsourcing of FML administration has increased significantly over the past three years, from 14% of respondents in 2007 to 25% in 2010.
• A third of employers have formal non-occupational return-to-work pro­grams, and most say these programs are effective in reducing absence and/or improving productivity.
• More than half of employers with employee assistance programs rou­tinely refer employees to the EAP when they go out on a leave of absence, most commonly for psychiatric leaves (44%), but also for medical disabilities (26%) and for FML (25 %).
• Respondents who have established formal screening and referral proto­cols between the EAP and other health, wellness or absence programs are nearly twice as likely to report that their EAPs have been effective in reducing absences and improving productivity — 64%, compared to just 36% of those without protocols.
• The direct cost for incidental absence and disability benefits is equiva­lent to 4% of payroll, on average, among respondents offering all three programs.
• Unplanned absences also result in indirect costs, such as the cost of re­placement labor and lost productivity. Mercer estimates that these indi­rect costs are at least equivalent to the direct costs of incidental absence and disability programs. For the average employer, that would amount to a total cost of 8% of payroll.
• 61% report that senior manage­ment is concerned about the indirect cost of absence.

Over 400 employers responded to Mercer’s survey, which covers all types of vacation, absence and disability programs and focuses on employer absence management strategies.  

-Sara Kelly