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Opportunity gap: disconnect between absence and productivity programs and employer aspirations.

IN JULY 2013 PRUDENTIAL GROUP INSURANCE partnered with market research firm Greenwald & Associates to survey over 600 larger employers that offered either short- or long-term disability benefits, or both. The companies ranged in size from 100 to over 10,000 employees. Our goal was to gain a greater understanding of how employers are approaching employee disability challenges with:

* Benefit solutions

* Partners and services

* The type of disability benefits employers currently offer their employees

* The types of vendors they use

* What services affect their carrier selection decisions

The result was a better view of the carrier selection criteria larger employers have adopted.

The survey results highlighted that employers often experience a gap between their absence management and RTW goals and their actual capabilities in those areas. Producers and consultants can help groups close those gaps.


Many employers know that a robust benefits package can help attract and retain valued employees, which is critical for managing productivity and maximizing human capital. At the same time, though, companies must control benefit costs. Recognizing a company's cluster profile can provide insight into its goals and likely buying behavior and add value to a consultative relationship. Additionally, the information can indicate possible approaches to meet both the benefits-quality and cost-control goals that companies attempt to balance.

The survey results highlighted that employers often experience a gap between their absence management and RTW goals and their actual capabilities in those areas. Producers and consultants can help groups close those gaps.


Prudential defines "total absence management" as a comprehensive, integrated approach that incorporates formal absence management and RTW programs, streamlined reporting and administration of absences and claims, and compliance documentation. The practice of total absence management is twice as common with larger employers compared to small business. Larger companies' goals in this area are also more aggressive.

While employers of all sizes express some degree of need for absence management, the survey found a large divide between small and large employers. Small employers are not planning on adding many of the services available for total absence management. Large employers, by contrast, show a greater percentage of those who have implemented these services, plan to add these services and find these services critical in carrier selection.

Overall, fully half of organizations (55 percent) with disability benefits rate their level of total absence management as 4 or below on a scale of 0 to 10. On average, the largest companies (10,000+) are more advanced (they rate themselves 5.7 out of 10) versus the smallest companies (4.0 out of 10). This area offers substantial opportunity for advice and consultation since half of companies have a goal of improving their absence management programs within three to five years, with one-quarter seeking significant change.

Andrew Sullivan is Senior Vice President of The Prudential Insurance Company of America (Prudential).

The survey identified several distinct clusters among
respondents based on their criteria for selecting a
disability carrier. The three most significant clusters,
which Prudential labels as "Already Theres," "Aspirers" and
"Laissez-Faires," differ considerably from each other as the
following highlights illustrate.


Already    * Strongest focus on workforce productivity and leave
Theres       management. Most advanced in absence management
             practices. Already Theres are 63 percent more likely
             than Aspirers to have implemented absence management

           * Over half consider a carrier's ability to offer a
             suite of return to work services as critical or
             important compared to only 1 in 5 in the Laissez
             Faire cluster.

           * Nearly half of the companies surveyed with 10,000
             or more employees are in this cluster. Only a third
             of companies with 1,000 to 9,999 employees and 28
             percent of those with 100-999 employees are "Already

Aspirers   * Have high aspirations for what they want from a carrier
             but have not made as much progress in absence
             management and return-to-work practices as the
             "Already Theres"

           * Aspirers rate themselves 6 points lower than "Already
             Theres" in absence management advancement and 3 points
             lower in RTW.

           * Seventy-one percent of Aspirers consider a broad suite of
             RTW capabilities critical or very important but less than
             a third have those services in place compared to 61
             percent of Already Theres.

           * Smaller companies are more likely than others to be in
             this cluster. Only 16 percent of Aspirers have more than
             10,000 lives.

Laissez-   * Report below average achievement levels in absence
Faires       management and RTW efforts.

           * Over half of the Laissez Faire employers reported that
             they use only internal resources to administer their
             return-to work programs.

           * Laissez Faires are half as likely as Aspirers to look
             to a carrier to help them improve workforce management.

           * Larger employers are less likely to be Laissez-Faires.
             Only 16 percent of Laissez Faire employers have more
             than 10,000 employees, compared to 48 percent of
             Already Theres.
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Author:Sullivan, Andrew
Publication:National Underwriter Life & Health
Date:May 1, 2014
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