Despite state and federal mandates that require employers track data on when employees are out of the office, companies fail to use the data to manage the associated cost implications, according to a new survey.

The survey of 331 human resources and benefits executives and managers of companies with over 500 employees by Liberty Mutual found an organizational disconnect between collecting absence data to satisfy state and federal regulations and using that data to understand costs and savings to function more effectively.

In the survey, 49% of respondents say they do not know the cost of absence in their organizations. Yet, 53% of respondents say they are focused on being compliant with state and federal leave laws. This turns into what Liberty Mutual calls a failure by companies to convert "data into dollars."

"[Employers] are so focused on compliance that they are not tracking the associated cost," says Heather Luiz, Liberty Mutual's disability and leave product manager. "They recognize it's an important thing to do, but they're not looking at it."

"Employers say it doesn't cost anything," besides short- or long-term disability, "but the reality is it does cost them money," Luiz adds.

According to Liberty Mutual, using Department of Labor data, absences could cost companies nationwide as high as $100 billion annually and in 2010, 3% to 5% of an average employer's workforce was absent on any given day.

Luiz said it costs companies money because if one employee is out, the rest of the team must make up the work. Those left behind lose productivity and often feel overworked. Seventy-eight percent of survey respondents say they cover absences by having co-workers "share the pain." The firm may also hire a temporary worker - which also involves an added cost. And if there is a missed deadline, Luiz says, there is a business impact to that.

One way to mitigate costs, Luiz explains, is to cross-train employees so they can cover everybody's expertise and also for companies to be accommodating, such as changing desk setups for injured employees or allowing them to work from home.

Register or login for access to this item and much more

All Employee Benefit News becomes archived within a week of it being published

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access