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Stephanie Goldberg

Most employers don't measure cost of worker absences: Survey

July 23, 2014 - 12:24pm

Cost of Absent Workers


The majority of employers don't measure the impact of absence on their bottom line, despite the fact that it costs about 8% of payroll on average, according to an Aon Hewitt survey released Wednesday.

Only 22% of employers will coordinate health and absence management with workers compensation in 2014, but more than half are considering doing so in three to five years, according to the “Aon Hewitt 2014 Health Care Survey,” which polled 1,234 company representatives in December and January about their U.S. health care benefits.

“Coordinating the related employer programs to effectively use data analytics and improve results is still in its infancy,” the report states.

The 36% of employers that do measure the cost of absence using data and metrics primarily focus on the frequency and duration of absence by medical condition, according to the report. Other metrics used to measure absence, which on average costs employers about 8% of payroll, include salary replacement costs, benefit costs, indirect costs, full-time employee equivalents and absence costs as a percentage of payroll or sales, such as overtime and temporary employee costs, the survey states.

Improving the health and wellness of employees will continue to be a main focus for employers moving forward, according to the survey.

“Health is a foundational element of four important employer-sponsored programs: workers compensation, safety, absence management and wellness,” the report states. “All four drive financial results in terms of productivity, quality and risk control.”

In 2014, 19% of employers will use a data warehouse or other data aggregator to integrate medical, absence, disability and wellness information, according to the survey. Meanwhile, 55% of employers said they'll consider doing so in the next three to five years.

The report also states that employers can improve outcomes across wellness, absence management and workers comp by implementing a stay-at-work program.

“The key is to realize these connections, share data and metrics, and align goals,” according to the report. “Obstacles will start to fade away as integration takes hold and the health imperative — with workers being present, energetic, creative and productive — becomes a priority.”

 



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