Absenteeism costs our economy billions every year. In fact, a recent report by the Conference Board of Canada stated that it costs the Canadian economy $7.4 billion per year in direct costs alone.
What happens when we throw indirect costs in the mix? It adds another $20 billion in costs per year.
Approximately 48% of companies say that employee absences cost them 1% to 2% of payroll, and 27% report these costs in the range of 3% to 5% of payroll. When indirect costs are factored in, absenteeism related costs can account for as much as 15% of payroll.
How much of this cost is avoidable? In these economically challenging times, increasingly, companies are looking for ways to increase their efficiencies and effectiveness. Managing their absence related processes is an important way to drive down direct and indirect costs as well as increase employee productivity and engagement.
By aligning health and productivity initiatives, companies can leverage integrated disability management programs in order to manage costs and show the importance of the health and well-being of their employees.
What does that look like for employers? It begins with the building of an overall wellness strategy that factors in all of the absence related processes, documentation and programs. The strategy looks for ways to eliminate stand alone and fragmented procedures. When an employee's illness or injury leads to a disability claim, the last worry the employee wants is having to deal with all the paperwork and processing of a claim; however, the burden of proof for a disability claim rests with the claimant.
By designing an integrated disability management program, employers can reduce absenteeism in duration and frequency, educate employees about wellness and streamline the disability claim process, when required.
Join me for Part 2 of this series as I explore the core components of an Integrated Disability Management Program.
Our world is full of universal truths. One that impacts us all is ageing. With four generations working together, we see the impact of economic forces as more Baby Boomers delay retirement. In addition to the legislative changes we’ve faced recently, our demographic realities affect how we approach saving for retirement.
The economic recession of 2008, changes to *OAS and **CPP along with the demographic shift that sees Boomers deferring retirement create pressure on employers in various ways. What changes employers consider to their pension plan design is mixed. Some may move from a Defined Benefit arrangement to a Defined Contribution (DC) plan. Smaller plans may consider moving from a DC arrangement to a Pooled Retirement Pension Plan (PRPP). Others may want to mix up their arrangements through a combination of tax-free savings account (TFSA) along with a group RRSP.
Along with the needs of plan members, investment management fees (IMF) play a part in the plan design decision-making process. Fiduciary responsibility, additional service support and plan features also demand consideration.
As a trusted advisor, I can help with these considerations as well as analyze the IMFs from different pension providers. In running a business, employers face many demands and challenges. Worrying about whether the pension plan is CAP compliant or if the IMFs are too high shouldn't be added to the list of concerns.
*Click here for details related to the 2012 changes to Canada's Old Age Security Plan
**Click here for details related to the 2012 changes to the Canada Pension Plan (CPP)
Dave Dickinson, B.Comm, CFP, CLU, CHFC
Experienced Benefits Specialist ready to optimize your group benefits and pension plans.