Streamlining Leave Management: Considerations for first-time outsourcers
Read more from the Guardian Absence Management blog
Employee leave regulations are becoming increasingly complex. The ever-changing nature of these laws has motivated many organizations to outsource their absence management programs, most commonly short-term disability (STD) and Family Medical Leave Act (FMLA) administration.
In a recent webinar, Guardian colleague Garlande Patz, MBA, CLMS, Head of Absence and Disability Practices, and guest speaker Mary Armstrong-Flippo, CLMS, Principal of Time Away, Disability, and Life (ToDL) at Gallagher, discussed common misperceptions and barriers to outsourcing, as well as best practices for choosing an absence management solution partner.
Navigating the leave management puzzle: Why more employers are outsourcing
The webinar speakers equate the leave management landscape to a puzzle. There are so many components for an organization to manage, including employer-sponsored benefits – like short-term disability, long-term disability, and employer leave policies – and statutory entitlements – like FMLA, ADAAA, and state/local leave. Just like a puzzle, some pieces are easy to put together, while others are quite challenging.
The challenge posed by fitting some of these “puzzle pieces” together has led to a significant increase in the outsourcing of STD and FMLA among employers. In describing why outsourcing is on the rise, Armstrong-Flippo elaborates, “it was [previously] that the largest employers were outsourcing simply because of the sheer volume of incidents of claims and leaves. But what we’re finding is that the smaller employers that used to manage everything in-house are also now dealing with the complexity of the various paid leave laws as well as starting to refocus their very slim HR teams [...] into more strategic support.”
In addition to ensuring compliance, other leading reasons that have prompted employers to change their leave administration model include striving to achieve greater workforce productivity, improve the employee leave experience, decrease absenteeism, and support workforce health.
Common challenges around leave administration
As laws become more complex, managing employee leave is becoming more challenging. The top compliance challenges organizations face include keeping up with state/local leave laws, transferring employees to alternate positions, coordinating various absence types, and determining eligibility for FMLA requests. And as the volume of claims increases, these elements become even more challenging to manage.
The cost of not administering employee leave correctly can be detrimental – not only to employee well-being but also to the organization. The risks and costs to the organization can involve penalties/fines, legal fees, lost time, negative impacts on the work environment, and the potential for managers to be sued.
Getting started: Best practices for first-time outsourcers
Ready to start navigating the leave management puzzle but unsure where to begin? Based on her experience with clients, Armstrong-Flippo provided some key considerations for evaluating outsourcing solutions. These include identifying the most critical performance imperatives such as compliance, quality, and customer service, the balance of cost versus customer service, the degree to which customization or configuration are required, and the organization’s confidence in managing statutory regulations.
After analyzing the relevant business factors — and making the business case for outsourcing, for those currently handling leave in-house — Patz and Armstrong-Flippo suggest four steps for employers who are looking to begin outsourcing:
Set a philosophy: The highest priorities should be returning employees to work safely and productively while supporting overall well-being.
Develop a model: Outsourcing the management of both short-term disability and family and medical leaves can help maximize success.
Make the business case: Getting buy-in from senior management and following a strategic communication campaign is essential.
Measure success: Nearly half of all employers surveyed reported employee engagement to be the most crucial measure of success.
Learn more
Want to learn more about streamlining your organization’s leave management? Check out the full webinar to explore in-depth statistics and further considerations for choosing an absence management solution partner, setting clear objectives, and measuring success.