Targeting programs on another level: paths to improving workforce well-being and productivity

January 22, 2024

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Unplanned employee absences — whether due to on-the-job injuries, physical or mental health conditions, family care needs or personal circumstances — are on the rise. Hyper-targeted programs are emerging as an effective way to help employers improve employee outcomes and productivity, control costs, and promote well-being.

Rising absenteeism and its costs

In the post-pandemic world, employees are absent from work much more often than in the past. According to the U.S. Bureau of Labor Statistics, about 7.8 million workers missed work in January 2022 because they had an illness or injury, needed medical attention or had to attend an appointment. This number has more than doubled since January 2021 where 3.7 million workers had similar absences. 

Nearly 4.2 million workers, or 3.3% of the American workforce, worked part-time in January 2022 for the same reasons — the second highest-ever percentage since data collection began in 1976.

The rise is likely due to a mixture of societal factors, such as the normalization of working from home during the COVID-19 pandemic, decentralized employees working remotely or on hybrid schedules, increasing instances of debilitating stress and mental health issues, and inadequate support for employee health and wellness. On-the-job injuries, another driver of absenteeism, are also on the rise. Sedgwick’s U.S. book of business for 2022 reflected an overall increase of 6.4% in workers’ compensation claims compared to 2021.

The costs associated with absenteeism are steep. In 2020, the Integrated Benefits Institute (IBI) found that employee absences cost U.S. employers around $575 billion, or $3,900 per employee. The study also found that, for every dollar U.S. employers spent on healthcare benefits, an additional 61 cents was spent on illness-related absence, disability and reduced work output.

To counter this trend, organizations are embracing targeted workforce programs that enhance the employee experience, ensure employees feel supported and cared for, and promote talent attraction, retention and development. Many such programs can be organized into two categories: those that lead with empathy and those that leverage data. 

An empathy-led approach

A 2023 Mercer global talent trends report found that out of 11,000 employees surveyed, only 2 of every 5 employees reported feeling like their company meets all their needs. If employers seek to understand their employee’s full lives, they can better safeguard their emotional, physical, social and financial well-being.

Leading with empathy means focusing on the whole person and considering — without prejudice — all factors that might affect how employees navigate systems and progress toward resuming a full and productive life. To that end, employers are designing programs that recognize the range of challenges employees are dealing with, while offering a touchpoint of caring. 

One popular strategy for infusing empathy into workforce programs is the development of employee personas, or semi-fictional profiles that represent one segment of an employee population. Employers can use workforce demographics to craft these personas, based on a range of characteristics: employee age and stage of life, location, educational background, tenure, life experience, family status and other attributes. 

Employers can then build narratives around these personas to understand how various employee groups might be affected by specific scenarios. How a certain employee group might deal with an injury, illness or disability, for example, or how they might engage with their benefits, the healthcare system or other technology platforms. 

A data-driven approach

You can’t fix what you don’t know; that’s where reliable data comes in. Harnessing employee on-the-job injury and absence utilization data can pinpoint improvement areas and help inform decisions on workforce wellness initiatives, benefits design, timely interventions and more. As employees’ family health and wellness concerns are increasingly diversified and complex, employee data can also be an invaluable resource for curating programs that provide holistic support.

Employers can also leverage employee wellness data from biometric screenings — or clinical assessments conducted by trained professionals at the worksite or a designated provider’s office — that identify and monitor certain health conditions. Data from biometric screenings provide employers with a baseline assessment of the overall health of their workforce. 

Yet according to a 2022 KFF report, only 24% of small organizations and 45% of large organizations offer biometric screenings to their employees. By instituting such screenings and analyzing employee data collected through them, employers can better tailor their preventative programs and intervention offerings — such as smoking cessation, weight management or lifestyle coaching.

The best of both worlds

The true ideal for tailoring employer-provided programs brings together both approaches — leading with empathy and leveraging data — to meaningfully improve employee outcomes. As technology evolves, opportunities abound to connect empathy with process so systems can be more easily navigated, and initiatives be tailored further to individual needs. Ultimately, the goal is for employers to promote productivity and well-being, create personalized and efficient end-user experiences, and provide a higher level of care to their valued employees.

> Learn more — check out an expanded version of this article in Sedgwick’s digital magazine, edge, issue 22

Exploring the complexity of a remote employee’s work state

December 11, 2023

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Remote work has increasingly become the norm — in fact, it is at an all-time high. Between 2019 and 2021, the number of people primarily working from home tripled from 9 million to 27.6 million. For many, it was unexpected just how strongly the pandemic would impact the commuting landscape in the United States. 

Regardless of work-related circumstances, it is integral to employment law compliance that an employee is governed by the correct state’s laws. An influx of employees switching to remote and a confluence of other complex factors muddies the waters. This shift alone poses unprecedented challenges for absence management professionals. 

Consider an employee named Sofia who works remotely from her home in Wisconsin for a tech company. Sarah’s supervisor, Barbara, works from her home in California. The company operates as a remote-only organization and has no physical headquarters. What, then, is Sarah’s work state? Wisconsin? California, where Sarah’s supervisor directs her services from? Or none of the above? The answer is complicated.

Why work state matters

Each state has different laws and requirements around unemployment, payroll taxes, workers’ unemployment and other employment law issues. Each worker must comply with their applicable state laws. 

In 2004, the U.S. Department of Labor’s employment and training administration advisory system updated localization of work provisions, or principles for determining where wages should be reported when work is performed entirely in one state or in a number of different states. “Localization of work” provisions are additional provisions of states’ unemployment insurance (UI) laws. 

This was the first update since guidance for interpreting state provisions on “localization of work” was issued in 1952 — spurred by seismic employment shifts including the advent of the internet, and the September 11, 2001 terrorist attack that required temporary mass-relocation to New Jersey.

Determining an employee’s work state

In general, under state unemployment laws, workers’ wages are reported to the state where the work is performed, and the laws of that state govern. For Sarah, that would mean Wisconsin. But much of the time it is not that simple.

Though states utilize various approaches in making this determination, many use the unemployment of localization of work (ULOW) test, in which an employer answers questions about whether an employee’s service is “localized” in a specific state.

A service is “localized” within a state if it is either performed entirely within a state, or performed both within and outside the state, but services outside of the state are temporary, transitory in nature or consists of isolated transactions. If true, the employee’s service is localized in that state, and that is their governing work state. However, if the above is not applicable, a work state determination must still be made. The following questions then must be applied in this order:

– Is any part of the service performed in the state in which the company’s base of operations is sited?

If not, 

– Is any part of the service performed in the state from which the service is directed or controlled?

If not,

– Is any part of the service performed in the state in which the employee lives?

Let us utilize this test considering the opening scenario: Tech firm employee Sarah, a Wisconsin resident, and receives all her work assignments and products via internet communication from her boss, Barbara, in California. 

No,

– the company is fully remote and has no base of operations. 

No,

– no part of Sarah’s services are performed in California, the state from which the service is directed or controlled. 

Yes,

– Sarah is performing all employment duties in Wisconsin, the state she lives in. Despite her supervisor being based in California, Sarah’s work state is Wisconsin, and her employment is subject to Wisconsin law. All wages from the date she began telecommuting from Wisconsin should be reported to Wisconsin.

Important considerations

Determining an employee’s work state may not work the same way if a request for leave under the Family and Medical Leave Act (FMLA) is involved. The law has specific guidance for evaluating whether an employee’s residence officially constitutes a work site. 

Under FMLA, in the case of an employee who reports to, or receives assignments from, a different location, their personal residence is not a work site. Instead, it would be the state in which his/her assignments come from. In tech employee Sarah’s case, her work state would be that in which her boss is located — California. 

It is the employer’s responsibility to thoroughly review their processes around determining an employee’s work state and ensure its accuracy to avoid residual effects for both parties down the line. Employers should carry out a comprehensive review, particularly if none have occurred since the pandemic shifted the workplace landscape.

This content was originally published by the Disability Management Employer Coalition (DMEC) as part of the Absence Matters column.

Learn more > explore our absence management solutions.

Crisis and critical incidents: clinical resource response

October 10, 2023

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The landscape of crisis and critical incident response within the claims industry is expanding. Where once teams managed cases almost exclusively involving the critically injured, new layers of care and response are emerging that address the “ripple effect” of trauma experienced by third parties, bystanders and witnesses to a crisis.

This broadening of both definition and services by critical incident response teams stems from an increase in new client demands in the aftermath of an incident—specifically, by individuals not directly related to the incident. For example, demand for treatment services may come not just from somebody who has had a severe fall at work, but from individuals who witnessed the fall or shared an environment with the injured worker at the time of the incident and been impacted by the event.

At Sedgwick, our approach to crisis care has shifted to include a broader spectrum of cases and claimants that reflect these trends. The rise in popularity of recovery program components like behavioral health services signals not only impacts for employers navigating return to work procedures, but an industry-wide embrace of viewing recovery and treatment through a holistic lens of overall well-being. If we can understand how an event impacts a person’s life, the thinking goes, we can provide more targeted care solutions and get them on a faster road to recovery. It is a modern but structured approach to crisis care that is resulting in better claims outcomes and happier, healthier customers.

Role of the practitioner in recovery

The case management process begins when crisis care specialists are contacted by claims staff or clients directly. Immediate needs may be obvious, as when an injured worker is hospitalized. A field case manager may be dispatched to the hospital where the injured has been admitted overseeing triage service with regular medical updates. Once the injured worker is discharged, a nurse may be assigned to assist with case management for post hospital care needs. Alternatively, claimants may seek different avenues of case management outside of critical injury, such as behavioral health services management, or in instances where multiple practitioners may be involved, and the claimant needs assistance facilitating setup of a care network. 

Case management is an intricate part of the recovery process. Especially for injured persons who just want to focus on getting better, case managers really serve to take the pressure off — whether it is by educating injured workers on their recovery rights, ensuring continuity of treatment services, or simply acting as a reliable touchpoint for communications during what can be an otherwise lonesome and isolating time.

One type of practitioner as in-demand for recovery services (after physicians and nurses) are behavioral health services providers, including licensed mental health clinicians. The difficulty of returning to “normal life” following a traumatic incident can be pronounced. Claimants may have anxiety about returning to a workplace where they witnessed a catastrophic event. Others may be facing a longer road to recovery after suffering catastrophic injuries. Behavioral health professionals are coming into focus not just as an essential facilitator of return-to-work, but as agents for overall health improvement.

The trend toward a holistic view of care means a variety of practitioners can apply their specialties to better identify potential barriers to care (preexisting conditions, family structure), uncovering in the process how individual lives are affected by crisis, and tailor treatment solutions accordingly.

Employers’ role in improving return to work 

In many ways, the COVID-19 pandemic changed how employers approach policies around absenteeism, disability leave and return to work. The diagnosis of “long COVID,” for example, compelled employees and employers to come to the table and reevaluate how employee roles might be adjusted to ensure they can work if they want to and so productivity losses are avoided. 

From a crisis care perspective, standards relating to recovery time and return to work have not changed. However, there is a greater awareness that crisis recovery is complicated, as employers learn more about what their workers need, and as mental wellness becomes more of a central discussion point. A positive outcome of the pandemic’s effect on the workplace definitely includes more of an openness to talk about these care points as potential barriers to return to work, as well as successful outcomes relating to management of employee disabilities and improved integration of these individuals into operations. 

For those employees in recovery who will be able to return to work eventually, employers can take a proactive approach to accommodations. In other words, what are the best options for getting this employee back to work? Thinking outside the box about what can help from the individual’s perspective and maintaining open communication will support greater employee satisfaction in the long term.

Most injured workers recovering from a crisis or critical incident want to get back to work as soon as possible; their routine represents normalcy. That said, the last thing employers want to do while transitioning an employee back to work is retraumatize or re-trigger the individual. People can relapse after a crisis so it is important to set realistic expectations early on.

Create a successful return to work plan by optimizing an employee’s capacities in combination with the right resources at the right time. Employers will see enhanced productivity and potentially improved health outcomes. The sooner a purpose and interpersonal engagement can be re-introduced into an employee’s life, the better the likelihood of a successful return to work transition.

Learn more > Our behavioral health solutions identify and address work-related injuries and traumatic eventsin an effort to help employees get the care they need to recover and return to work.

Workplace safety training: dos, don’ts and what’s next

August 9, 2023

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The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) recently announced a new national emphasis program to improve workplace safety in warehouses, processing facilities, distribution centers and high-risk retail establishments. As part of the program, OSHA plans to conduct more health and safety inspections of such facilities over the next three years to address potential risk factors. Among the best ways for any facility to prepare for an inspection is redoubling their efforts to train employees on workplace safety.

The benefits of this proactive approach are twofold: Workplace safety training helps employees develop the knowledge and skills needed to work safely and demonstrates employers’ good-faith efforts to protect employees and improve working conditions. Employers generally know they should be conducting safety training, but many struggle with what to teach employees and how to deliver effective and actionable programs. Here, we will highlight some resources and best practices to help you optimize your safety training initiatives.

Don’t reinvent the wheel: leveraging national standards

According to the American Society of Safety Professionals (ASSP), the most effective training incorporates adult learning principles, multiple modes of learning and hands-on exercises. Building a training program that hits all those notes might sound daunting, but the good news is that employers need not start from scratch. Together with the American National Standards Institute (ANSI), ASSP has created criteria and accepted practices for safety, health and environmental training that employers can leverage regarding development, delivery, evaluation and program management. This standard is known as ANSI/ASSP Z490.1.

In recognition of employee populations becoming more dispersed and the rising popularity of virtual training, ANSI and ASSP released Z490.2 in 2019 to provide specific guidance on accepted practices for e-learning in occupational safety, health and environmental training. Applying the ADDIE instructional design model — analyze, design, develop, implement, evaluate — this supplementary standard (when used with predecessor Z490.1) helps employers manage and deliver virtual safety training effectively, as well as measure outcomes and on-the-job application of its lessons. Shortly after Z490.2 was published, the COVID pandemic hit and related workplace health and safety issues quickly took priority. Many may not be familiar with this valuable resource because its release was overshadowed by the pandemic, so we wanted to highlight it here for awareness.

Use of the ANSI/ASSP standards has been shown to support organizations’ compliance with OSHA’s general duty clause and OSHA regulations that specifically require training. Employers that are unsure where to start in building or enhancing their workplace safety training programs will be well served to turn to these standards for quality guidance.

Consider your audience: applying adult education principles

Another worthwhile resource is OSHA’s publication on developing and delivering employee training. Among other features, the guide highlights the importance of tailoring employee safety training to adult learners in order to achieve the best results. Here are a few of the adult education principles they reference:

  • Voluntary learning: Adults generally learn best when they have decided they need to learn. Workplace safety training may be mandatory, but it can also be positioned as a valuable opportunity for professionals seeking to grow, improve their performance, and protect themselves and others at work.
  • Immediacy of impact: Adults have a right to know why information is (or should be) important to them. Programs should quickly demonstrate how the training material and methods are relevant to employees’ lives.
  • Respect: Adults have a wealth of personal and professional experience and knowledge that should be acknowledged. They will resent an instructor or training content that talks down to them or dismisses their concerns.
  • Learning by doing: Adults learn more when are actively engaged and participate in the process. They will retain more information when they use and practice their knowledge and skills as part of the training.

Virtual reality: the new frontier in safety training?

Taking the concept of e-learning to the next level is training via virtual reality (VR), which immerses users into a computer-generated instructive environment via a head-mounted display or other technologies. Like nearly all tech-forward innovations, VR safety training has its pros and cons.

On the positive side:

  • VR enables employees to engage in real-time decision making as they’re learning, as well as to safely make mistakes away from the live hazards of the workplace.
  • Research cited by the National Safety Council (NSC) found VR safety training to be more effective than traditional approaches and to offer improved knowledge retention and recall.
  • Immersive learning can be a happy medium between in-person/on-the-job training and online training delivered via a computer or mobile device.
  • VR is gaining general popularity, especially among avid video game players. Younger members of the workforce may find VR training feels natural and especially engaging.

It also has its drawbacks:

  • VR is not always the best medium for teaching skills involving complex systems or processes requiring hand dexterity.
  • It may not integrate well with the back end of learning management systems and security platforms.
  • Equipment and software costs are high, so scalability can be an issue for large or decentralized employee populations.
  • Some VR users experience may nausea, headaches or mental fatigue.
  • Many organizations don’t understand the technology or how it can benefit their employees and are therefore hesitant to invest in it or to use it for a purpose as important as safety training.

Incorporating VR in safety training is a rapidly evolving trend, and we advise that its use be researched thoroughly and mapped out wisely based on your particular safety considerations and employee population to ensure the greatest return on investment. No matter the mechanism or content used for safety training at your organization, the most important thing to remember is that the ultimate goal is to keep people safe and healthy at work.

Learn more — read about Sedgwick’s risk services offerings and how we can help you improve the safety of your workplace

Better work-life balance begins with employers

July 21, 2023

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Workplace culture has evolved beyond employees’ value lying solely in productivity; their whole selves and well-being matters, too. A sustainable work-life balance is critical to safeguarding well-being and improving the performance of workers. Now more than ever, employers hold responsibility for nurturing employee wellness to enable them to succeed at their jobs, and they must take intentional measures to make it happen.

For empl­­­oyees to be their best at work, remain in their jobs and stay healthy, they must have a balance and be able to enjoy life outside of the workplace. Meta-analysis from the International Journal of Environmental Research and Public Health has suggested a positive influence of work-life balance on organizational performance, career motivation, attendance, employee recruitment and retention. Additionally, it reduces outcomes such as psychological distress, emotional exhaustion, anxiety and depression.

A necessary investment­­­

Whether we like it or not, mental health challenges play a role in the workplace and can stem from or be worsened by job-related experiences. More than one fifth of U.S. adults, about 58 million people, live with a diagnosed mental illness, and only half of that population receive mental health services (National Institute of Mental Health). It’s no longer a shiny bonus for employers to provide mental health support. Employees are exasperated by a global health crisis and this support has turned into a business imperative across all organizational levels.

While the prevalence of mental health challenges is increasing nationwide, so too is the rate of employee attrition; more employees than ever are leaving their jobs for mental health reasons, including unsustainable workloads (Harvard Business Review). While rates of millennial and Gen Z attrition were already high in 2019 — at 34% of respondents overall — in just two years, by 2021, that rate had increased to a staggering 50%, according to a Mind Share Partners mental health report.

In response, employers are investing more in employee mental health support — from mental health training to more paid off for mental health days. Because of increased mental health training and discussion, in 2021, 47% of employees reported their manager was able to support them if they had a mental health condition or symptom (compared to 39% in 2019), according to the above-mentioned report. In addition, employees are using accommodations to a greater extent, including time for therapy appointments and extended or more frequent breaks throughout the workday.

A commitment to flexibility

After many employees experienced remote work for the first time during the pandemic, a collective reckoning changed the way we work forever. People want more autonomy and power to choose when, and how, they work best. Key to promoting a sustainable work-life balance, employers must provide flexible arrangements and establish boundaries around communication and urgency.

Working remotely (or hybrid, which means to work from home on select days) is increasingly coveted by employees, and proven to be good for both workers and business. For example, workers with flexible schedules worked longer hours but achieved more and were happier with work, according to a pre-pandemic study completed over a nine-month period (Forbes). Studies show it also increases productivity and job satisfaction.

These changes provide workers with more freedom to be present in their family’s lives, prioritize personal hobbies, participate in exercise and take care of what matters most to them. A 2022 McKinsey survey explains the extent to which American workers are embracing remote work. Of all job holders in the United States, 58% say they can work remotely at least part of the time. Not only is it common, but results show that most workers — 87% of respondents — would want to work remotely much of the week if given the choice.

Ideally, flexible work models should be a mutual partnership between employers and their employees that enable both to enjoy multiple benefits and perform at their very best.

This content was originally published by the Disability Management Employer Coalition (DMEC) as part of the Absence Matters column.

Sedgwick named to Newsweek’s America’s Greatest Workplaces 2023

July 5, 2023

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MEMPHIS, Tenn., July 5, 2023 – Sedgwick, a leading global provider of technology-enabled risk, benefits and integrated business solutions, has been recognized as one of America’s Greatest Workplaces 2023 by Newsweek and Plant-A Insights Group.

The award recognizes workplaces for the America’s Greatest Workplaces in the United States, by conducting a large-scale employer study based on over 389,000 company reviews.

“At Sedgwick, we’re committed to delivering a world-class colleague experience with a focus on wellbeing, connection and growth,” said Sedgwick’s Michelle Hay, global chief people officer. “Our goal is to attract and retain the very best talent and our focus on caring for our colleagues and customers creates a culture where meaningful work, work-life balance and career growth are prioritized. Sedgwick has a long history of commitment to diversity, equity and inclusion for our clients and one another.”

Participants ranked companies they either work for or are familiar with on categories including corporate culture; work-life balance; training and career progression; compensation and benefits; and proactive management of a diverse workforce.

“How do you find a great workplace—one that treats employees respectfully, pays them fairly, provides training and advancement opportunities, and supports a healthy work-life balance? Newsweek and market-data research firm Plant-A Insights are proud to introduce “America’s Greatest Workplaces 2023,” highlighting companies that are committed to offering a positive working environment,” said Nancy Cooper, Newsweek’s global editor-in-chief.

This is the fifth time Sedgwick has appeared on Newsweek’s ranking of America’s Greatest Workplaces 2023. The company has also been recognized as one of America’s Greatest Workplaces for Women 2023America’s Greatest Workplaces for Diversity 2023America’s Greatest Workplaces for LGBTQ+ 2023 and America’s Greatest Workplaces for Job Starters 2023.

About Sedgwick Sedgwick is a leading global provider of technology-enabled risk, benefits and integrated business solutions. We provide a broad range of resources tailored to clients’ specific needs in casualty, property, marine, benefits, brand protection and other lines. At Sedgwick, caring counts; through the dedication and exper­tise of 33,000 colleagues across 80 countries, the company takes care of people and organizations by mitigating and reducing risks and losses, promoting health and productivity, protecting brand reputations, and containing costs that can impact performance. Sedgwick’s majority shareholder is The Carlyle Group; Stone Point Capital LLC, Caisse de dépôt et placement du Québec (CDPQ), Onex and other management investors are minority shareholders. For more, see sedgwick.com.

Managing employee absenteeism: the importance of prioritising employee well-being and the cost of ignoring it

June 14, 2023

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Last year, Sedgwick acquired Direct Health Solutions (DHS), a leading specialist provider of employer-based telehealth solutions in Australia. In this blog, we are joined by Karen Samuel, acting general manager, DHS who weighs in on the importance of prioritising employee well-being and the cost of ignoring it.

In light of the recent pandemic and increased emphasis on employee well-being and mental health in the workplace, there has been a shift in the way companies manage employee absenteeism. With the rise in popularity of remote and hybrid work environments, telehealth services have emerged as a critical tool to support organisations in managing absence and improving the mental and physical well-being of all employees.

Prioritising employee mental and physical well-being not only reduces an organisation’s overall absence rate — it also helps avoid the associated costs of absenteeism.

Why it matters

Managing employee absenteeism should be a priority for any company as it plays a major role in maintaining a productive organisation. Studies have shown the happier an employee is, the more likely they will be able to perform at their best both professionally and personally.

Workforce absenteeism is costing businesses billions and, left unchecked, it can have adverse impacts across a business. It can also signal wider problems, such as workplace health and safety, culture, or stress and mental health issues, to name a few.

When it comes to managing employee absenteeism, the centralisation of absence-related data, effective monitoring and tracking of issues, and the delivery of on-demand employee health support will provide human resource departments with more clarity and control over their workforce.

An employee absenteeism study

Direct Health Solutions (DHS), a Sedgwick business, is a leading specialist provider of employer-based telehealth solutions and absence and injury management programs in Australia. As one of the largest tele-triage organisations in the country, DHS averages more than 500,000 absence and injury calls per year and has a dedicated 24/7 telehealth centre driving their absence management programs.

DHS undertakes an annual employee absence management and well-being survey to provide benchmark data and key trends for employers to use when managing employee absenteeism in Australia. In the newly released 12th edition of this report, absenteeism levels were recorded from 1 January 2022 to 31 December 2022 using data provided by 132 companies across Australia who collectively employ over half a million employees. Respondents were asked to provide data based on all unplanned absenteeism, including personal leave, workers’ compensation leave and unauthorised leave, both paid and unpaid.

What the data says

According to the data collected from this survey, overall employee absenteeism increased by just over two and a half days (23%) from 2019 — employees took an average of 13.8 days’ sick leave in 2022. Of the companies who took part in the survey, 58% believed their absenteeism increased over the 12-month period.

Most common reasons for absenteeism

According to the survey results, the three most common reasons for employee absence were carer’s leave, coronavirus-related leave and non-genuine sick leave, or ‘chucking a sickie’.

Given the period in which the survey was conducted, it is no surprise to see that COVID-19 had a significant impact on employee absence. COVID led to increased periods of leave throughout 2022, as Australian’s contracted the disease, and took time away from work either while they were sick or supporting family members. Some organisations had an absence rate at 20% or higher during COVID’s peak in January 2022. Overall, 80% of employers indicated that COVID-19 led to increased absences in 2022.

In addition, public health initiatives led to increased awareness of staying home when sick to stop the spread. This could lead to employees being more likely to take a day off for genuine short-term illnesses such as colds, flus, and infections.

The high number of COVID-related absences, combined with the increased public health awareness, also drives an increase in the amount of carer’s leave taken, an assumption being employees may have taken carer’s leave to care for a family member suffering from COVID-19, or alternatively schools and day-care centres are insisting that sick kids remain home when unwell. This further drives an increase in carer’s leave in 2022.

Non-genuine sick leave was reported by 43% of employers as having increased in 2022. True non-genuine leave is primarily driven by low motivation in the employee and may be increased by low resilience and poor coping and planning skills in the employee. If managers can find out the underlying cause for the time off, or the factors that are leading to low motivation, they are in a good position to support employees and improve the attendance.

Mental health concerns are also driving an increase in personal leave. 57% of employers reported that absences due to mental health issues have increased over the last 12 months, with the top three drivers being workload, non-work factors, and personal illness. The ADP People at Work Survey found one in five Australians (21%) have taken time off in the last 12 months due to poor mental health, and this number rose to 46% for those employees who considered their workplace mentally unhealthy. The most common cause of stress cited in that report was increased responsibility since the pandemic, and longer working hours.1 The State of Workplace Mental Health in Australia Report found almost half of employees say their work is suffering due to poor mental health, and this rose to 56% when looking solely at millennials.2

The high number of employees taking sick leave is exactly why companies need to better manage their employee absenteeism and invest in employee well-being. With effective tools and management strategies in place, companies can better understand the reason behind these absences and work with employees to reduce the number of days taken, while offering guidance to improve and support the employee’s overall well-being.

Effects on productivity and profitability

Employee absenteeism is costly and becoming costlier, with the survey data revealing the average direct cost of absence per employee per annum increased from $3,395 to $4,025. The impacts of COVID-19 and the increasing cost of living have put a strain on the mental health of many Australians. 80% of companies surveyed in the 2022 absence management and employee well-being survey conducted by DHS said that COVID-19 restrictions have led to increased absences.

The data revealed that absenteeism in contact centres remains higher than for non-contact centre roles. Contact centres are often considered stressful, which can be attributed to environmental factors such as stressful phone calls, a high volume of phone calls and dealing with highly emotional and/or aggravated customers. These centres also often have higher staff turnover when compared with non-contact centres. As a result, more employees may be more inclined to take time off work to help manage their stress levels, which may be why absence rates within call centres are higher. Call centre employees may also experience less flexibility during work hours, such as flexibility around when, where and how they do their work. This restricts the employee’s ability to manage their personal and work life commitments.

For most businesses, unplanned absenteeism is costly. When an employee is repeatedly away for extended periods of time with no prior warning, their workload is shifted to their colleagues. Those employees are then at risk of becoming overworked, potentially disgruntled and stressed to a point they too need time off work — it can be quite costly depending on the roles and responsibilities of the absent employees.

Effectively managing employee absenteeism

According to the DHS 2023 absence management and well-being survey report, the three most effective methods of managing absence are:

  • Escalation to senior management
  • Return to work interviews
  • Formal trigger review points in place to review absences

These results highlight just how important it is for companies to effectively manage employee absenteeism — and the cost to them when it’s not managed effectively. By prioritising employee physical and mental health, along with well-being — especially considering the lingering effects and changes in mentality post-COVID-19 — employers can create a workplace culture that values and supports its employees.

Since acquiring DHS, Sedgwick is better equipped than ever to offer a combination of services covering any scenario where people are taking time away from work. Our clients count on us to support and improve the health and productivity of their workforce in a way that is cost-effective, efficient and compliant. With our software solutions, employers can manage compliance with complex federal and state regulations regarding leave of absence and job accommodation. We also offer a range of specialised HR services and safety software platforms in Australia. Our absence management solutions complement our developing injury management, employee productivity and workers’ compensation solutions in Australia, providing our clients — including some of the largest and most innovative corporations in the country — the added support of Sedgwick’s global resources and expertise.

This content was originally published by DHS, a Sedgwick business.

Learn more > Download a copy of our 2023 Absence management and well-being report and explore DHS solutions.

The missing link: using absence data to transform employee well-being

June 7, 2023

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Absence utilization in the U.S. is at an all-time high. In January 2022, approximately 4.2 million employees worked part time because of illness, injuries, and other medical problems — the second highest percentage since data collection began in 1976 (Bureau of Labor Statistics). In response to the growing demand, employers must be proactive and seek innovative ways to address employee well-being. There’s one resource that many employers already possess but might not be leveraging to its fullest potential: data. Analyzing data to curate comprehensive well-being programs that address your employees’ critical health needs is essential for retention and supporting productive lifestyles.

The power of data

Historical absence data is one of many tools used to understand employee health and wellness. Other options like biometrics screening are also advantageous. In fact, 24% of small firms and 45% of large firms ask workers to complete biometric screenings that ultimately help employers better understand health and wellness needs of their workforce (KFF). However, employers can get a clearer understanding of employee needs by tapping into absence data points like condition trends, leave reason and average absence length. Because today’s employees consider well-being a top employment factor, it’s critical that employers harness all available data to create wellness programs that create a workplace where people feel supported. . Research shows that companies with higher levels of employee well-being report higher revenue per employee, lower healthcare costs, fewer days lost, and 70% less stress among employees. Additionally, they achieve two times higher levels of engagement than other companies (Willis Towers Watson).

Absence data can also guide in the development of preventive intervention programs that address employee needs. Primary prevention programs are commonly offered by employers as a way to provide support before the onset of disease, injury or illness. An estimated 54% of small firms and 85% of large firms offer primary prevention in their wellness programs. This includes voluntary benefit options like smoking cessation, weight management and behavioral or lifestyle coaching (KFF) programs. Secondary prevention includes proactive measures like screening before disease onset, while tertiary prevention is designed to reduce disease involvement with established patients.

Using absence data to build a well-being program may positively impact productivity and absenteeism. Consider a high-cost condition like diabetes. Without regard for trending leave reasons and conditions, a company might decrease coverage for prescription drugs or cancel a health coach preventative program to cut costs. Without reviewing absence data, the employer could unknowingly increase out-of-pocket expenses and contribute to poor prescription adherence for diabetes patients — resulting in increased absenteeism and decreased productivity.

Consider a leading absence driver nationwide, mental health. Absence data can tell us a lot about employee mental health needs. Data can be leveraged to identify mental health needs andguide in the building of a well-being program that sufficiently addresses preventative and tertiary benefit options. Providing access to the appropriate tools is critical to reducing absenteeism, confronting mental health stigmas in the workplace, and improving overall well-being.

The cost of absenteeism

The cost of absenteeism is significant: Productivity losses related to health problems cost U.S. employers $225.8 billion annually, or $1,685 per employee, according to the Centers for Disease Control and Prevention (CDC). In fact, the indirect costs of absenteeism, disability or reduced work output due to medical issues may be several times higher than a company’s direct medical costs. Understanding absence trends and eliminating barriers to employee resources can reduce health and productivity costs and support the well-being of your workforce.

This content was originally published by the Disability Management Employer Coalition (DMEC) in @Work magazine.

Learn more > explore our disability and absence management services