The trend toward outsourcing leave management continues to grow

With leave management becoming increasingly complex, more organizations are opting to outsource it.

In fact, the number of organizations outsourcing leave has increased 160% between 2012 and 2021.¹ This is not only to reap the benefits of the technology, compliance resources, and consistent processes that outside vendors offer, but also to help improve the employee experience and increase productivity, both of which are linked to outsourcing.² If you are considering outsourcing absence management, keep these tips in mind:

Make the business case

If you want to shift to an outsourcing model but are currently managing leave in-house, you’ll likely have to get senior leadership’s buy-in. Here are some tips to go about it:

1. Beware of defining a dollar-amount ROI. Value and risk mitigation are key components of outsourcing’s return-on-investment (ROI), but it can’t always be measured in fixed amounts. The benefits of outsourcing, aside from improvements to the employee experience and assuring compliance, include being able to redeploy your leave team to handle other components of HR, including benefits or absence-related matters.

2. Consider the costs of mismanaged leaves. In addition to mitigating the risk of legal fees and fines that can result from noncompliance, there are other costs to consider, such as temporary workers and overtime costs that can be unnecessarily high when absence isn’t properly managed. That can amount to a significant cost savings.

Choose a vendor with sophisticated customer service and tech capabilities

When it comes to choosing a vendor for your outsourcing solution, one size doesn’t fit all.

1. Ensure employees have a positive experience. Thoroughly vet the prospective vendor’s customer service practices and the resources they provide employees. As an employer, you want your workers to feel comfortable reaching out when they need to take a leave and ensuring that what’s presented to them is done so in a user-friendly way.

2. Seek out vendors powered by a rules-based engine. An increasing number of vendors make leave determinations using a rules-based engine that can support multiple leave types and is programmed to comply with the most up-to-date state and federal laws. When a leave request comes in, the system generates the proper duration and next steps based on all relevant factors, making for a more streamlined experience.

3. Real-time access portals. Leave doesn’t happen on a 9-5 basis. As an employer, you need real-time, easy access to your absence solution to pull reports whenever you need, and/or log on to file a request on behalf of a member who may be confronting an emergency and unable to do so.

Set objectives and measure success

1. Work with your consultant. Look to your broker or consultant at your outsourcing vendor to work with you to help decide what success factors are and what best practices they recommend to achieve them.

2. Write it down. Develop a written strategy outlining your goals and specific policies to support them.

3. Listen to your employees and their feedback on the vendor. Probably the ultimate measure of success is when your employees start reaching out first to your vendor as it shows you’ve set clear communications procedures and that they feel comfortable doing so.