Creating and implementing a successful time-off program requires employers to adopt a new paradigm—one that views employee health, absence and disability as interconnected and translates into the adoption of new strategies. The following steps are recommended to maximize the value of time-off programs:

Take inventory. Most time-off programs have been built in pieces over the years. Companies should take a holistic inventory of the current time-off programs they've developed over time and make sure the purpose of the overall program still meets the needs of their employee population. In some cases, the way in which various time-off program segments are combined can make a significant impact on costs and employee productivity.

Identify the totality of time-off program costs and establish a formal tracking plan. Because time-off programs are so complex, companies have found it difficult to identify and assess how these programs directly impact the bottom line. Once companies have a comprehensive inventory of their time-off programs, they need to take time to identify the total costs associated with those programs and establish a formal plan for tracking and managing future costs.

Review the design of your time-off program. Often, the high-level design of a time-off program can minimize unscheduled time off. As the workforce changes, employees are looking for more flexibility in their time-off programs. To accomplish this, companies may want to consider offering floating holidays or adding a PTO bank, which not only enables employers to manage time-off programs more effectively, but gives employees more freedom to choose how they spend their time off.

Consider outsourcing short- and/or long-term disability. According to a recent survey, more than half (51 percent) of companies that outsourced short-term disability and/or long-term disability experienced reduced disability duration, and just about half (47 percent) experienced more effective application of their return-to-work programs. More than one-quarter (27 percent) noticed reduced disability incidence.

Source: Hewitt Associates, http://www.hewittassociates.com