Outsourcing absence management

Proper management helps bottom line, overall productivity
By Rochelle Morandini and Vanessa La Fortune
|Canadian HR Reporter|Last Updated: 09/20/2010

Almost one in five (17 per cent) Canadian organizations outsource absence management and another seven per cent plan to do so by 2012, according to HR Outsourcing: Canadian Trends and Insights 2010, a survey of 69 senior executives by Hewitt.

When employers track and manage absence properly and effectively, they enhance the employee experience while reinforcing their due diligence and better containing costs. In addition, by maximizing their learning from the aggregate data provided, organizations can leverage this information to develop strategies to best invest in the health of their workforce and improve overall productivity.

It’s important to note there are two kinds of absences — employee disability absence and leaves of absence unrelated to disability. While many organizations have been keen to outsource benefits administration and disability management, dealing effectively with non-disability leaves of absence is often overlooked, even though the administrative burden can be substantial.

Workforces who are increasingly multi-generational often experience frequent incidents of both absence types. While older employees need strong disability management support due to lengthy recovery periods, companies with younger staff are experiencing frequent, short absences that also require solid leave management.

Key elements of an effective absence management solution include:

• An efficient process to track and manage leaves that ensures appropriate accountability for employees and managers. It should be consistently applied and aligned with corporate leave policies.

• Integrated data management and analytic reporting to help the employer understand the trends and root causes of absenteeism.

• A good employee experience so workers on disability leave receive all benefits they are eligible for while ensuring they are case-managed effectively for timely recovery and return to work.

• Effective use of employee assistance programs (EAPs), condition management and wellness programs that help employees minimize the risk of future medical episodes, better maintain their overall health and improve lifestyle habits that impact attendance.

Disability absence management

There are a number of specific reasons why the appeal of outsourcing disability absence management has increased:

Complexity: Many claims, particularly those related to mental illness, can be complex and subjective. Without access to clinical resources, it’s difficult for employers to determine an employee’s medical condition and return-to-work status.

Access: Delays in accessing the health-care system translate into longer absences. Outsourced case managers, with access to medical and treatment information, can sometimes co-ordinate quicker solutions and outcomes for employees than busy family physicians.

Even with outsourcing, an employer plays a key role in the absence management process in owning the employment relationship and exercising due diligence in managing these leaves. Employers can assist health-care providers in their understanding of the work requirements of an employee’s occupation, specifically as these functions may relate to supporting a potential modified work schedule or job accommodation.

They also need to ensure the workplace — and the employee’s manager — are willing and able to return an individual to work. Moreover, someone at the workplace needs to maintain regular communication with the vendor to troubleshoot red flag cases, such as when non-medical issues are impacting the progression and continuity of a disability claim.

Leaves of absence

Leave administration is rarely offered as a standalone service by providers as the cost is often prohibitive. It is also still fairly new in Canada.

One of the challenges with tracking and administering leaves of absence is having a formal approach to deal with requests that minimizes the impact of time away from work. The following steps outline the steps taken:

Initial leave notification: Determining the type of leave request, confirming eligibility and appropriateness, and commencing the tracking process.

Leave management: Tracking and managing leave progression, including co-ordinating activities and communication at key points during the leave.

Preparing for return to work: Co-ordinating all stakeholders to ensure a smooth return to work at the appropriate time.

Rochelle Morandini leads Hewitt’s organizational health practice in Canada. She can be reached at rochelle.morandini@hewitt.com. Vanessa La Fortune is a benefits consultant at Hewitt in Vancouver. She can be reached at vanessa.lafortune@hewitt.com.

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