November 30, 2022
Leave benefits matter in attracting and retaining the talent you need, optimizing employee engagement and well-being, and ultimately thriving as a company. Employees and employers alike are becoming aware of the impact time away has on mental, financial, physical, social and community health. Likewise, well-being initiatives provide alternative, preventive solutions to problems that keep employees away from work. As employers prioritize health and well-being, leave needs to be central to their strategy.
No time is better than now for HR leaders to lean into this important relationship. The warning signs of an economic downturn are flashing. When it hits the bottom line, employers will be asked to identify what’s essential in the benefits package. With health and leave benefits frequently ranked as the top benefits employees want and need, they are the essentials to focus on. Reductions to these benefits may cost employers more in lower productivity, burnout and lost talent than the anticipated savings.
What exactly does leave have to do with well-being? The following sections explore this mutually beneficial relationship.
Impacts of Time Away on Well-being
Time away offers a remedy to many well-being challenges. A timely example is the recent trend to counteract burnout through paid company closures and mental health days off. To further support mental health and eliminate the guilt some employees experience about taking time off, many large employers are actively encouraging leave use to unplug and recharge. A recent survey found that 89% of employees feel refreshed after taking time off, but not all leaves are equal. When employees stay connected to work while away, they are significantly more likely to think about quitting.1
To maximize benefits, employers need to offer time away, encourage its use and create a culture that emphasizes the value of stepping away. Beyond paid time off, companies are experimenting with new low-cost ways to offer schedule flexibility, from schedule swapping and relaxed attendance policies to the 4-day work week. Allowing employees to adjust their schedules rather than missing work fosters better work/life harmony and can be a financially beneficial alternative, particularly for hourly employees.
Bereavement leave is another common employer benefit that reduces the mental health impact of grief. Leading employers are expanding bereavement leave policies in duration and scope and allowing intermittent use so employees can take time away immediately after a loss, as well as on difficult days that follow, such as birthdays or anniversaries.
Without paid leave, employees are often forced to choose between taking time off and their financial security. Employers and employees are becoming wise to the financial benefits of leave. Access to sick leave to care for oneself or a family member can reduce personal and employer health care expenses through preventive care and early diagnoses and treatment. In fact, 17.5% of employees without paid leave have an unmet medical need due to cost compared to only 11.4% of those with paid leave.2
When employees experience a medical emergency, short-term disability benefits provide a safety net by replacing a portion of their paycheck. And that safety net is needed more often than expected—one in four employees experience a disability before they retire.3 Additionally, paid parental leave allows new parents to bond with their little one without the financial stress of living without a paycheck. Moreover, delayed childcare costs offer significant savings.
Beyond the financial benefits, leaves can enhance physical health. The pandemic led many employers to embrace leave as a powerful tool in reducing the spread of COVID-19 (and other communicable diseases). Access to sick leave has also been shown to reduce emergency room visits for adults and their children.4 Similarly, parental leave has a compelling health and well-being case, with evidence showing it can decrease rates of infant mortality and maternal depression and anxiety while increasing immunization rates and extending breastfeeding duration.5 On the other side, not offering an attractive parent leave benefit can be expensive and cost employers current and future employees.
Lastly, time is crucial to connect with colleagues, community and one’s purpose. One lesson the pandemic reinforced, which will be hard to forget, is that social connectedness is essential to well-being. Leave benefits give employees the opportunity to enjoy and strengthen relationships with family and friends outside of work, and conversely, reenergize them so that upon their return, they can fully engage and build connections with colleagues. Employers are also expanding leave benefits to cover purpose-driven activities like community service and social justice engagements. With the backdrop and stress of a looming recession, a little time to reset and focus on what matters most is a powerful gift employers can give their employees.
Impact of Well-Being Initiatives on Time Away
The relationship between leave and well-being goes both ways. Just as leave benefits support employee well-being, emerging health and well-being benefits show promise in reducing undesirable absences, such as unscheduled days off or disability leaves. Mental health is a good example. It is a common reason for short-term disability claims and last-minute leave requests. Large employers aim to get in front of the problem and help employees before they need to step away from work by providing evidence-based care, ranging from resiliency programs to digital cognitive behavioral therapy. In fact, expanding access to mental health services is a top priority for large employers.6
Likewise, solutions that prevent and treat physical health conditions, such as cancer, musculoskeletal disorders, heart disease and diabetes, reduce sick and disability leaves. Promising strategies large employers are implementing include centers of excellence (89%), advanced primary care (60%), virtual health (54%) and on-site clinics (53%). Benefit navigators can also save employees, particularly working caregivers, a significant amount of time by directing them early to the right benefits or treatments.
Financial stress can also lead to employees missing work. With inflation at an all-time high and recession predictions coming from every direction, it’s not surprising that employers are turning their focus to benefits that help employees with their day-to-day financial priorities and challenges. Initiatives being implemented range from one-on-one financial planning to emergency savings programs (e.g., savings accounts alongside the 401k). Leading employers are also rolling out assistance specific to employees earning lower wages. In 2022, 9% of large employers offered programs targeted to this population through low-cost loans or programs to raise credit scores, and another 9% offered programs to enable early access to earned wages.7
Proactive supports for health and well-being free up employees from the burden of spending time on preventable problems. What’s more, time away is a proactive tool and needed safety net for overall health and well-being. Business Group on Health explores this relationship with large employers through the Leave Optimization Forum and ongoing work to expand employers’ collective understanding about how time away and well-being can be strategically integrated.
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- 2 | Konish L. ‘The disruption for a person’s financial security is enormous.’ Gaps in access to paid leave may lead to financial hardships, report finds. CNBC. July 28, 2022. https://www.cnbc.com/2022/07/28/gaps-in-access-to-paid-leave-lead-to-financial-hardships-report-finds.html. Accessed August 29, 2022.
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