Employers Create More Flexible, Less Traditional Workplaces

The new Mercer Survey on Absence and Disability Management found that employers continue to embrace workplace flexibility, in part demonstrated by a migration from traditional vacation/sick plans to paid time off (PTO plans). PTO plans are now in place in 63% of the organizations surveyed, up from 50% in 2013 and 38% in 2010. PTO plans provide employees more flexibility and reduce the need to determine (and track) what type of day off is being taken.

But despite their focus on time off, many employees do not use all of the days available to them: 44% of participants report that their employees take less than 80% of their allotted PTO time. And for the growing number of employees who work remotely, time off may not truly be time away from work. Employers are rethinking time-off program design to take into account all of these dynamics and help employees to achieve a healthier work/life balance.

Some employers -- more than one in 10 respondents -- have taken the step of offering unlimited vacation, at least to executives. However, most employers that have implemented unlimited vacation have found that employees take about the same time off as they were allotted previously under a standard plan. 

But other types of paid leave -- particularly parental leave -- are increasingly important as well. Generous parental leave policies implemented by a number of companies, particularly in the tech industry, were covered widely in the press and drew national attention. While for most employers, disability benefits are still the only official company-sponsored paid leave for new moms that are provided, 24% of respondents provide paid parental leave for bonding to the birth parent.

In addition, 25% of employers reported providing a paid parental leave benefit to the non-birth parent. Whereas parental leave for the birth parent begins when the disability ends, parental leave for the non-birth parent usually begins upon the birth of the child. For those providing a paid parental leave benefit, the median number of weeks offered is six weeks for the birth parent and four weeks for the non-birth parent. In the vast majority of cases, the paid parental leave benefit covers 100% of the employee’s pay. 


Additional findings from the survey include:


  • Employers grapple with increasingly complex federal and state leave requirements
    • More employers are choosing to outsource FMLA administration. In 2015, 40% of respondents outsource or co-source FMLA, up from 38% in 2013.
    • Improving FML administration and reducing the impact of absence on operations are respondents’ top priorities for their absence and disability programs (cited by 44% and 42%, respectively).
    • Nearly two-thirds of respondents (65%) have experienced an increase in leave requests over the past two to three years, and about a third reported an increase in the number of ADAAA leave accommodation requests (32%).
  • Clinical management and formal return-to-work (RTW) programs for non-occupational disabilities remain a largely underutilized strategy for managing disabilities.
    • Only about a third of participants formally communicate objectives and expectations regarding occupational or non-occupational absences or disabilities to managers and supervisors -- and of those, about half formally communicate objectives for occupa­tional injuries/illnesses only.
  • The Americans with Disabilities Act Amendments Act (ADAAA) has caused employers to revisit their treatment of disabled employees. Employers are now more likely to end employ­ment after determining that return to work is not feasible and conducting the required discussion about accom­modations. Historically, employers waited for Medicare eligibility to terminate medical coverage for disabled em­ployees.
    • Nearly half of respondents have revised (or are considering revising) their policies on terminating disabled employees as a result of ADAAA.

Mercer recently published a report on our 2015 Survey on Absence and Disability Management, a survey of over 450 US employers. The complete survey report, which includes data tables with results broken out by employer size, region and industry, is available for purchase here. We also will post survey highlights periodically on select topics here.

Rich Fuerstenberg
by Rich Fuerstenberg

Senior Partner, Health, Mercer

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