Human Resource Management | Compliance | Total Absence Management HR Management

ADP Research Institute®

Total Absence Management Survey Reveals Wide Variation in Employer Approaches to FMLA and Absence Administration

Since the Family Medical and Leave Act (FMLA) passed nearly 20 years ago, Human Resource Management professionals have continued to grapple with the issue of unplanned and extended employee absences. But what are employers doing to help manage employee absence and stay compliant with federal and state leave laws? To find out, the ADP Research Institute℠ surveyed HR and benefits decision makers from 254 midsized companies (50-999 employees) and 249 large companies (1,000 or more employees) to better understand their business priorities and practices with regard to FMLA compliance and Total Absence Management (TAM). The survey showed that, while employers broadly agree on the causes and impacts associated with employee absenteeism, there are wide variations in how they measure, administer and mitigate absence within the workplace.

Lower Productivity Identified as Primary Business Impact of Employee Absenteeism

Given the potential disruption to business operations caused by employee absences, it’s not surprising that more than half of survey participants in both midsized and large companies report that absenteeism has had a negative impact on productivity. Employee absences not only have a direct impact on payroll costs through substitute labor and paid time off, but they can also result in substantial indirect costs associated with lower workforce productivity. Intermittent employee absences are harder to anticipate and plan for than extended leave, and are more likely to cause disruption. Beyond operational disruption, multiple studies have shown that unplanned absences can be highly stressful and demoralizing for other employees within the workplace.

Midsized and Large Companies Differ in Strategies to Reduce Absenteeism

According to the ADPRI survey, personal and family health issues are the primary drivers of employee absence and the vast majority of midsized and large companies are taking steps to control absenteeism. Their strategies for mitigating absence disturbances include tracking of absence events, availability of employee health benefits, wellness program offerings, and targeted interventions. Large companies are much more likely than midsized companies to apply punitive discipline (47% vs. 35%) and analyze reasons for absences in order to identify opportunities to offer additional health and wellness benefits (27% vs. 13%). These findings suggest that employers may consider it too risky to enforce leave policies without having effective tracking tools in place to ensure consistent, accurate TAM administration.

TAM Administration Remains a Largely Untapped Human Resource Management Opportunity

When it comes to TAM, survey results indicate wide disparities across tracking, compliance, and policy administration. While some employers use sophisticated automation and third-party vendors to track, monitor, and implement leave administration, most midsized and large employers administer some portion of TAM manually, do not conduct systematic benchmarks, and do not quantify the impact of absences. About 53% of large and 72% of midsized employers report using either manual processes or no systematic process to administer absence plan and policy provisions. These findings are particularly notable when you compare them with the number of companies that report applying punitive discipline for unauthorized absences (47% of large and 35% of midsized employers). This comparison suggests that many employers, especially those using manual and nonsystematic methods for TAM, have limited ability to enforce an absence policy.

Consistent TAM Administration is Critical for Employers Moving Forward

Because TAM touches on a broad range of Human Resource Management issues, including employee health and wellness, work/life balance, performance management, compliance, and even workforce diversity, it can have a significant impact on productivity, competitiveness, and ultimately, the bottom line. As the TAM survey findings suggest, consistent and well-communicated TAM administration is becoming a requirement for any company wishing to be a true employer of choice in the 21st century.

*A complete list of sources and citations can be found in the full report.

About This Report: This report is based on findings from a May 2012 ADP HR/Benefits Pulse Survey on Total Absence Management (TAM) conducted by the ADP Research Institute℠, a specialized group within ADP. Decision makers in midsized (50-999 employees) and large (1,000+ employees) across the United States were surveyed to better understand their business priorities and practices regarding FMLA administration and TAM.

Keywords: Benefits Administration, Compliance, Health Care Reform

Business Types: Research for Small Organizations, Research for Midsized Organizations, Research for Large Organizations

Roles: Research for Human Resources Professionals

Total Absence Management Two Decades After the Passage of FMLA

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