Marina Galatro, George Katsoudas and Agnes Nines offer ideas to integrate programs that support time away from work strategically with other benefits to reinforce employee engagement and productivity. Success requires thoughtfulness and transparency.
Policies that allow employees to take time away from work are a competitive priority. This statement is more than intuitive — it’s consistently backed by recent studies, including one finding that vacation (45%) is the second-most important benefit to employees after healthcare (53%).¹ HR and benefit leaders inherently understand the organizational and employee significance of these policies for many types of absences. As the overseers of absence management, they’re just as keenly aware of the complexity of this responsibility.

A recent benchmarking survey found that 65% of employers consider absence management a top organizational priority.² While this viewpoint doesn’t always resonate as firmly with the C-suite, executives are deeply concerned about the problems created by loose policies. And most would champion strategic oversight that helps engage employees, preserve productivity and performance, and contain medical and disability costs. 

Absence management provides crucial guidance for employees in balancing time away from the job with their work responsibilities, and is a key component of a holistic compensation and benefits approach. When programs that support time away from work are strategically integrated with other benefits — absence management becomes part of a broader, stronger employee engagement and productivity initiative.

Leading employers take an interconnected approach to absence management
Most employers offer multiple programs for time off from work such as the Family and Medical Leave Act (FMLA), parental leave, jury duty, bereavement and others. These benefits are a distinct competitive advantage that come with the potential downside of complicated coordination. The first step in understanding and effectively using the organizational philosophy to guide absence management strategies is establishing a clear structure. A proactive and consistent approach frees employers from a reactive cycle dictated by ever-changing leave regulations. They’re able to better manage their recordkeeping obligations as events occur and reduce the risk of noncompliance.

The time it takes to evaluate how different benefit programs are interrelated — and to link or combine them systemically — depends on the organizational culture. What’s essential for all employers is a broad perspective and productive partnerships between contributing departments.

Reporting capabilities are a key feature of absence management, and may be distinctly different among employers with different needs. Even though the saying “what gets measured gets done” may be all too familiar to some, the idea never gets old for those who’ve experienced its value. With the help of reporting technology, employers are able to track two important variables, including how many employees are away from work, and the implications across departments.

Leave management starts with keeping employees at work
Production output is steadier when qualified employees are at their worksites making regular wages. And leading employers know they can control the cost and quality of their products and services by managing the ebb and flow of their workforce, on and off the job. Resorting to routine overtime or bringing in replacement workers costs time and money that could be saved through a proactive approach.

A key piece of managing absence effectively is recognizing when employees can and should request accommodations that will help them stay at work or limit their time away. This insight requires an awareness of the appropriate accommodations and a clear understanding of the rights and responsibilities of both the employer and employee. Managers and employees may not have the knowledge or confidence to have a stay-at-work conversation on their own.

What managers should know is they can broach the subject of work adjustments while respecting employee privacy. And employees should understand they have the right to seek accommodation or leave, and take the opportunity to indicate what they need to do to balance work and their personal issues.

PTO trends are challenging employers
In the past few years, more employers have offered more time off in response to the passage of leave-related legislation that varies by state, county or city. This trend is especially challenging for employers with multiple locations — and managers who want to stay updated on employer and employee rights and regulations.

If anything, the shift toward jurisdiction-mandated leave is expanding, and the hodgepodge of policies it creates continues to challenge employers.

Similar to minimum wage laws that have passed in various parts of the country, legally required leave policies lack a road map, and it’s difficult for employers to operate an across-the-board absence plan that meets a universal standard. It’s imperative to stay current on this topic in all relevant jurisdictions for the smoothest, most cost-effective management of operations and talent.

OWTI Image Expanded paid time off (PTO) — a recent trend in absence management — is one of several nontraditional benefits that strongly appeals to employees who want more control over their work-life integration. It’s also among the most challenging for employers to oversee. Sometimes the extension is employer-generated and at other times the policies are mandated by a state, county or city.

Unlimited PTO is a benefit employers consider for multiple reasons. For any workforce, this policy can promote greater work-life integration — and may fit well in a culture where employees value flexibility and autonomy, and have clear expectations about performance and accountability. With no limit on vacation days, employees can take breaks when needed and come back to work recharged. The advantages of unlimited PTO extend to employers, too. They’re no longer obligated to pay employees back for unused time, and the burden is lifted on administering and tracking time off.

The portion of employers offering unlimited PTO remains small (3%), but as more employers consider the idea, they should be aware of the policy’s challenges as well as its benefits.² Employees who were previously reimbursed for unused time off could perceive the change as the loss of a financial benefit — possibly an unwelcome trade-off. And when a use-it-or-lose-it policy is replaced, employees may actually take less time off because there’s no longer a deadline for vacation. The risk is burnout and resentment that could dampen enthusiasm. When considering unlimited PTO, carefully thinking through the implementation will help to avoid logistical pitfalls, unintended consequences or miscommunication with employees.

Occasional maintenance helps sustain leave management success

Any leave management approach requires regular refinement to reflect new best practices, requirements and tech-enabled solutions. An overriding principle of better absence management is investing in thoughtfulness and transparency — a practice that should be consistently applied from advance planning, through administering all policies and processes, to measuring and improving outcomes. When employers stick to this principle, any path they choose can be validated and clearly communicated despite a quickly-evolving field.

This article is an excerpt from our 2019 Organizational Wellbeing & Talent Insights Report – U.S. Edition. 
Marina A. Galatro
Senior Human Resources Consultant, Human Resources & Compensation Consulting

Marina provides consultation and effective recommendations on topics such as leave of absence, PTO, training and development, and state law analysis. California leave laws are a particular specialty. As an HR advocate, she meets with state assembly members on pending workplace legislation and how it will impact on organizations.

George K. Katsoudas
Division Senior Vice President, Compliance Counsel

George leads the Benefits and HR Consulting division’s National Compliance team, and is responsible for key national publications for employers, including the Healthcare Reform Update, Technical Bulletins and Directions newsletters.

Agnes Nines
Practice Leader, Absence Management, Northeast Region

Agnes heads a regional consulting team focused on large-group life and leave management programs. She provides specialized expertise in disability, total absence management, FMLA and ADA legislation, state and other jurisdictional leaves, and absence compliance.

¹Project: Time OFF, “The State of the American Vacation 2018,” 2018
2Arthur J. Gallagher & Co., “2018 Benefits Strategy & Benchmarking Survey,” November 2018