Should you Insource or Outsource Your Leave Management?

| Pat Purdy

For corporate benefits and leave management professionals, managing health-related leaves of absence under the FMLA while ensuring compliance with the expanded accommodations under the ADAAA is a challenge that requires a planned approach and dedicated resources. It often leads companies to consider whether they want to take on this challenge internally or seek outside assistance (or even use a combined approach).

The first step to figuring out whether you should insource or outsource your leave management program is to conduct an internal assessment. First, decide what an ideal leave management program looks like for your company by defining general objectives and determining what type of leave policies best fit your corporate culture.

After you’ve considered these broad parameters, answer these five questions to help determine whether you should insource or outsource:

1. Which combination of in- and outsourcing can your capabilities handle?

Are you looking to outsource all leave administration, or purchase software and tools to implement your program in-house? Or do you need a combination of both? What you can achieve will be largely determined by your current and future capabilities. You should assess your staffing (more on that below), the capacity of your systems, your coordination and interface abilities, and any other resources you will need for overseeing the program.

2. Does your staff have the right skill set to manage a leave program in-house?

The ability of your staff to handle the work and complexity of an insourced or even co-sourced model must be thoroughly evaluated. Can they handle the reporting, tracking and management of a full leave program? It is also important to remember that the right staffing is just as important for managing outsourced programs. Outsourcing does not mean ‘washing your hands’ of leave management entirely.

3. Have you found the right vendor?

The vendor you choose for an outsourced leave program will depend on your company-specific needs, especially how much you wish to outsource. Vendors should be thoroughly assessed for their specific capabilities, and also asked questions such as: ‘Do they have sufficient experience with companies that are similar in industry, size and complexity?’ ‘Are they interested in understanding our company’s culture and willing to adapt to it?’

4. Are you ready to build or develop integration points in your benefits structure?

Since the majority of leave requests are a result of the employee’s own health, it is important to make sure that short term disability, workers’ compensation, employee assistance programs, and health & wellness programs are part of your overall leave program. Developing integration points for coordination between programs should take place whether you have an insourced or outsourced model.

5. Is there a change management plan in place?

Changing leave policies and procedures impacts all employees. If previously all leave was automatically granted, the transfer to a consistent, fair and compliant leave program (which identifies leaves that have run their course or require additional supporting evidence) will be a significant, and potentially disruptive, change in your organization. Proper change management plans and effective employee communication will help ease the transition for employees and their managers as well as staff in charge of communicating the changes.

Managing leave under FMLA while ensuring compliance with ADA is more complex and challenging than ever before. Making the right choice about whether to insource or outsource is an important, and sometimes expensive, decision that can impact your entire organization. Careful consideration of your company’s needs and honest answers to the questions above can help ensure you make the right decision for your company and its employees.

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