Traditionally, the leave of absence experience has been driven by the need for compliance and regarded as a transactional series of tasks. Employees notify their employer of their need to be out of work, at which point HR, benefits, or leave departments are then on notice to provide the employee with a series of information and documentation related to what is often a very personal and life changing event.
This experience is largely transactional by nature, and organizations have typically measured success through minimizing FMLA compliance risk, employee abuse of time, or operational inefficiencies related to manual time-tracking activities and processes. What stands missing from the bottom line are the costs organizations bear related to the employee’s inefficient navigation of leave processes, options, and their own responsibilities. Research from organizations who have measured the operational and financial impact associated with these inefficiencies has identified that it can cost an organization millions of dollars each year.
A 2014 study conducted by a large utility company with employees located throughout California examined this experience, and the results told a compelling story – there is a significant financial and employee retention cost when organizations exclusively view their leave program as a transactional, compliance-based experience.
The study evaluated data on over 1,000 employees who took maternity and/or parental leave over the course of 12 months. It focused on and measured various components of the leave process including employee education of corporate and statutory leave information, efficacy of information sources (digital and human), volume of questions to internal HR teams as well as the TPA, required actions, and several other measures of the steps to plan a leave and return to work. Through the detailed analysis and measurement of each leave component, the study identified employees were incredibly burdened with the responsibility of navigating this complex and often misaligned experience while juggling their own rapidly changing circumstances. The study illuminated that on average, employees spent over 40 hours researching, gathering, and navigating the process for themselves to understand options and requirements. Employees cited common struggles regardless of prior experience taking leave, with themes highlighting that information was cumbersome to locate, information lacked clarity, and it was difficult to understand what employees were required to do. Furthermore, the study highlighted that the inefficiency and dissatisfaction of employees shifted the burden of responsibility to the HR team and leave of absence administrator to remediate these gaps. When accounting for these processes and results, the study identified that these inefficiencies cost organizations anywhere from $1,900 to $13,000 per leave when their leave programs solely focus on compliance and do not address broader support for the employee leave experience.
This study highlighted a common theme we see from employers of all shapes and sizes. As organizations are challenged with supporting a largely virtual workforce amongst a pandemic, the coordination and optimization of leave responsibilities are more important than ever.
A survey conducted by Mercer in September 2020 shows that enhancing coordination between employer and state leave policies, streamlining the employee experience, and reducing employer costs are going to be 3 of the top 5 considerations organizations will have to prioritize to support their workforces through future waves of the pandemic and beyond. Technology is a key component for organizations to solve this human challenge that has big implications for business. When employees can maximize, optimize, and clearly understand their leave of absence, not only are they more satisfied with their leave experience, but they are more loyal to their employer and are more likely to return to work post-leave.
Technology is both an effective and efficient way to quickly scale and support the needs of your workforce while managing and reducing the costs of these exercises as they exist today. By leveraging technology, organizations are able to reap the benefits invested in providing their populations with robust and supportive leave options. LeaveLogic — a leading technology focused on employee leave of absence education & decision support — built the first solution for employee leave planning and education and provides an unwavering focus on enhancing the end-to-end leave experience. The platform streamlines and optimizes the complex coordination of benefits and responsibilities for employees so they can focus on the events and experiences that matter most while HR teams can get back to doing what they do best, which is supporting their people.
To learn more about leave as an experience, check out our white paper, “The Organizational Cost of the Employee Leave Experience,” on the LeaveLogic website, and be sure to check out our UKG partner solution on the UKG Marketplace.