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Outsourcing Absence Management – HR Trends

There is an increasing trend among Australian organisations implementing an outsourced absence management program. This trend is due to the high levels of absenteeism in Australia, the effort and time it takes to minimise its impact, and limitations in internal capabilities and systems.

Recent organisational surveys in Canada and the US reveal that close to 15% of organisations have outsourced absence management, and a further 7% intend to do so in the next 12 months. This trend is likely to continue to accelerate in the coming years.

Rather than viewing it as outsourcing a problem, HR see it as implementing a better approach to managing an important human resource issue. Absence management is complex and hard to deal with, and Direct Health Solutions has developed unique and powerful capabilities to simplify management and get control of absence fast.

Most business leaders are aware of the cost of absenteeism, but ineffective or out-dated systems make it difficult to accurately calculate the real cost of absence and proactively intervene and address the issue. It is important to run the ruler over the true underlying cost of absenteeism – both direct sick pay and indirect costs such as excess headcount to cover leave, overtime, labour hire, and management distraction.

You can access our free cost calculator on this website.

Absenteeism also has a significant impact on employees, impacting morale, workload, stress and mental health, not to mention lost wages and financial burden. In workplaces that need to replace labour, the risk of health, safety and quality issues increase, and management workload becomes more demanding diverting leaders from their core functions.

Outsourcing can deliver many benefits to different stakeholders. When deciding to outsource absence recording, it is important to clearly articulate the program benefits to senior stakeholders, front line leaders and employees.

For managers, it will free up time, reduce administration, and provide a simplified system to manage employee absence. For employees, it can deliver 24×7 medical advice and referral to other health services such as your  organisation’s Employee Assistance Program (EAP). For HR, developing a centralised reporting process provides a consistent approach across the business, including comprehensive reporting and real-time absence data analytics.

Direct Health Solutions introduced nurse-led absence management to Australia 14 years ago and is the forerunner in this space. We are the only provider to offer this service, and it is powered by our proprietary leading-edge AbsenceTrack technology.

What Outsourcing Absence Looks Like

Direct Health Solutions handle initial absence calls from employees who are ringing in sick or for carer’s responsibilities. These calls are handled by trained AHPRA nurses skilled in providing health advice over the phone for employees and their family members. Managers receive real-time alerts through the system, and trigger alerts if employees are exceeding pre-defined levels of absence or have a concerning absence pattern.

When employees return to work, the program ensures that managers have back to work discussions with every employee, and HR have reporting to monitor, analyse and better understand the impact of absence and its underlying causes.  The service also provides HR and executive leader-level dashboards which graph hotspots, trends and causes to take remedial action.

Not Outsourcing The Problem – Implementing a Solution

One of the common factors holding companies back from outsourcing absence management is the misconception that it is “farming out” a problem which really falls within the manager’s remit.  The reality is, most managers tend to avoid the notification call because they are not confident in handling it, or they use it as a vehicle to performance manage the employee putting pressure on them to return to the workplace early. Direct Health Solutions advocates that managers focus on building the relationship with the employee and manage the absence upon the individual’s return to work.  Our approach provides a fair and consistent process, and effective real-time reporting that is accurate and informative, to help build employee engagement and wellbeing and optimise attendance outcomes.

“I hear this concern quite frequently from HR and Operations Managers. By centralising the initial notification of absence, employee calls are handled with care and consistency, and absence information is recorded in our proprietary absence management system in real-time. What our platform ensures is that managers have a proactive conversation with returning employees and if necessary address any concerning patterns, rather than avoiding the problem. Our program increases management accountability and employee engagement, and our customisable training modules build management confidence and skills to address absenteeism constructively.

Companies who partner with us are not outsourcing a problem, rather they are leveraging our unique capabilities to support their business to optimise the attendance, health, and productivity of their workforce.” (Paul Dundon).

Is This Approach Right For Your Business?

Direct Health Solutions is Australia’s leading absence management service provider, with clients of all sizes across all industry sectors accessing our health services. We enable organisations to reduce absence by 25%- 40%, and boost employee engagement and wellbeing.


Contact us for a chat to discuss your absence challenges now.


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