For many organizations, leave management is something to outsource. A 2023 Guardian report revealed that 51% of employers said they hire a vendor to handle their leave management at least partially.
The decision to outsource leave is an understandable one. Leave requests are increasing and leave statutes are multiplying, which leaves HR busier than ever. Administrating leave is no easy task. Leave management requires administrators to make careful, calculated decisions that impact employees’ lives. Their work also impacts the company. As they field leave requests, they must also maintain staffing levels, communicate with managers, and orchestrate employee returns.
It’s clear that HR needs help with leave management. Outsourcing is an option, but it’s not the only one. When it comes to leave management, there are three ways organizations can handle it:
- Outsourcing: Companies hire external teams to handle leave of absence requests.
- Insourcing: Companies handle leave requests in house, ideally supported by technology.
- Co-sourcing: Companies appoint one or two people to facilitate leave requests with a provider, which typically offers technology- and people-based support.
There is no universally perfect approach to leave management. Outsourcing appeals to many organizations — large ones, especially — because it eliminates the stress and complications of manual insourcing.
More and more employers are realizing, however, that it’s possible to insource leave management and leave their manual processes behind.
When insourcing is paired with modern leave technology, leave programs can transform and modernize, saving time, improving compliance, and providing a personalized employee experience.
The following guide explores the business impacts of bringing your leave program in house with the right technology. Read on to see how insourcing could transform and modernize the way your organization handles leave.
How insourcing improves the employee experience
When you outsource your leave management, it’s important to remember that you’re also outsourcing your employees’ leave experience. The leave process involves many touchpoints as employees request time off, take their leave of absence, and return to work. Each of these steps and interactions contribute to their overall employee experience.
Employees who receive accurate, timely information from kind, compassionate colleagues are much more likely to have a positive employee experience – even if the reason for the leave was heartbreaking, difficult, or stressful.
On the other hand, employees could end up not knowing who to contact, and then corresponding with someone who isn’t a colleague. They might encounter confusing processes where they aren’t sure what they are supposed to do, what information to provide or to whom, or what their overall status of their request it. This all adds up to a poor leave experience during an already-stressful event in their lives.
The difference matters. According to AbsenceSoft’s Leave of Absence Experience and Business Impact Report, poor leave experiences lead to poor retention and poor productivity. Many employees start to search for a new job, or even just choose not to come back at all.
When you insource your leave management process, you remain in control of the employee experience. HR teams can add personalized touches that reflect your work culture and overall brand.
It’s often easier to make employees feel fully supported when their leaves of absence are handled by a co-worker. When leave is administered in-house, employees can report directly to HR. An internal team can make sure their request is received with discretion and empathy. The right leave platform will ensure that the rest of the leave process is swift, uncomplicated, and, most importantly, accurate and compliant.
How insourcing eases HR’s load
Making leave management an internal process doesn’t just improve the employee experience. It also makes HR’s workload more manageable, predictable, and streamlined.
You may find yourself raising your eyebrows at such a statement. Shouldn’t outsourcing be the method that minimizes HR’s to-do list? It’s true that outsourcing can eliminate some work for HR. But even when employers hire a vendor, they still need personnel dedicated to oversee their leave program.
According to a report from the Disability Management Employer Coalition, employers that outsource leave need between one and three people to support leave administration. Interestingly, employers that insourced their leave management required the same number of people to support leave.
This paradox exists because most leave requests aren’t 100% straightforward. Most leave management vendors can take care of simple FMLA requests, as the process is codified by law and the steps to administer FMLA are abundantly clear.
But there are many other types of leaves of absence beyond FMLA leave, and entitlements often stack. When these requests roll in — and they always do — HR is left with more work.
Leave cases that are nuanced and complex can stump outsourcers and often require intervention from HR. Consider a few of the most common examples:
- Complex state leave: If you employ people in a state like California with complex leave laws, you may have workers who qualify for FMLA leave, multiple paid leave programs, and leave provided by company policy. Outsourcers may be able to help determine eligibility for a few of those elements, but it’s likely their expertise will not cover everything.
- Pregnancy leave: Pregnant employees need more than maternity leave. Parents-to-be may need time away from work before, during, and after a pregnancy, a reality that outsourcers are not typically equipped to handle. These employees often need accommodations covered by the PWFA and ADA, which outsourcers typically do not manage.
- Cancer: Employees with cancer may need access to multiple types of leave as they undergo and recover from cancer treatment, which can include chemotherapy, surgery, radiation, and more. Employers that insource can offer support through employee assistance programs and other means on top of leave to help employees and their loved ones through such a difficult time. They will also have all the case details from their leave of absence to inform job accommodations that might be needed for lingering or ongoing issues.
It’s unusual for leave management vendors to handle these situations entirely on their own. When these requests inevitably arise, vendors call in HR for help. HR, then, must manage the vendor in addition to handling escalations and advising on one-off and complicated requests.
The resulting frustration may be one of the reasons why many employers — especially larger ones — are choosing to insource leave management. According to the same DMEC report, 60% and 80% of employers with more than 5,000 and 20,000 employees, respectively, use technology to insource their leave programs.
How insourcing benefits business at large
One reason why insourcing may be particularly popular at larger companies is that these companies are more likely to offer their own leave programs. Leave management vendors typically can’t support company-specific leave policies, as they’re designed to outsource simple leave requests under uncomplicated statutes like the FMLA and certain state leave laws.
What’s more, vendors support many clients — they can’t learn the ins and outs of every business’ policy. It’s worth noting, however, that some third-party administrators can support company-specific policies because they use technology like AbsenceSoft, which can configure custom employer policies. Retail insurance brokerage Newfront, for example, uses AbsenceSoft to deliver a personalized leave experience for clients’ employees.
This exception highlights the benefits of insourcing leave management via technology.
With technology, companies don’t have to eliminate or downgrade their leave programs to make leave management more doable. They can use software to ensure their leave programs — powerful benefits they use to attract and retain workers — are administered with accuracy and efficiency.
Another benefit of insourcing? Insourcing provides important data that outsourcers might not be capturing or able to provide in a timely, affordable way. The right platform provides HR insights that can improve the employee experience.
For example, leave technology like AbsenceSoft spares HR of operational challenges by making staffing coverage easy. It gives users real-time insights into employees who are out on leave and when they plan to return. With this data, employees both at the worksite and out on leave have a better experience.
A leave platform also gives employers more confidence in their leave decisions. Companies mistakenly assume that by outsourcing their leave process, they also outsource risk. This assumption is false. If a vendor improperly denies leave, the employer inherits the risk of employee complaints or, worse, legal action.
The best way to minimize risk is to equip yourself with modern leave technology. A platform that provides the most up-to-date information will enhance your decision-making and streamline your process. That’s the benefit of insourcing: good technology gives way to better leave management.
With AbsenceSoft, you can unlock the benefits of insourcing
These days, leave management requires more and more time, effort, and skill. Some organizations may be tempted to outsource their FMLA and other leave management to deal with the growing demands on HR.
In many cases, employers can find more relief by supporting their in-house operations with modern leave technology. Insourced leave management offers employers a few advantages:
- HR can deliver a personalized employee experience, where leave requests are greeted with empathy and supported with fast, accurate decisions.
- Texting and self-service portals made requesting leave and providing information much easier for employees.
- Leave technology handles complex leave requests that, when outsourced, puts extra, unexpected work on HR’s plates.
- Insourcing allows employers to implement the creative leave packages they use to attract and retain employees – and track critical data on usage and cost.
Here’s the bottom line: when HR insources leave management, they not only minimize and streamline their workload, but they also position themselves to provide the best employee experience possible. If you think your organization is ready to insource leave management, check out the six signs your organization is ready to insource leave. And to learn more about how your organization can build an insourced leave program, download this ebook.
For even more information, watch the AbsenceSoft MasterClass.