Speaker 1: 0:00

Is paid leave, just another line item expense, or can it become a powerful retention and engagement tool? We'll find out on this episode of Shift Shapers.

Speaker 2: 0:11

This is the Shift Shapers podcast, connecting benefits advisors with thought leaders and entrepreneurs who are shaping the shifts in the industry. And now here's your host, david Saltzman.

Speaker 1: 0:25

And to help us answer that question, we've invited Seth Turner, founder and senior advisor at AbsintheSoft. Welcome, Seth.

Speaker 3: 0:32

Thanks, david, excited to spend some time with you today.

Speaker 1: 0:35

It's our pleasure, and this is, I think, a part of the industry that a lot of advisors don't necessarily know a lot about, and it's become more and more prevalent, so it's a great time to be talking about it. Let's just jump right in. Paid leave is something that I think people used to think was kind of a nice to have. Has it really become a need to have?

Speaker 3: 0:55

It really has, david, I think you know. For years in the United States it's been short-term disability plans that are, you know, company-sponsored or employee-paid, and so what we've seen is a big shift that a lot of states are passing some version of paid leave that are causing employers to rethink how they structure their benefits. There's also been a big component of really using leave to attract and retain employees, particularly in certain demographics of your workforce, such as younger parents and those that are in a sandwich generation, that are caregiving for both children as well as, as in many cases, their own parents.

Speaker 1: 1:31

You know, part of what we're hearing is that there's a whole group of people who won't even apply to a company if it isn't part of the benefits package.

Speaker 3: 1:38

That's very true. We did a survey at Absinthe Soft that really talked to about 800 different employees and really looked at what they see as their benefits. 86% of them responded they are looking for some level of paid leave when they're looking at job descriptions and 42% of them wouldn't apply without it. So there's, you know, as we look at how to bring people in, we're also eliminating them if we don't offer some sort of paid benefit.

Speaker 1: 2:06

So, as advisors counsel their clients or their prospect, it's something that they really need to be aware of.

Speaker 3: 2:12

Absolutely.

Speaker 1: 2:13

So what is it? I mean, beyond the actual time off itself? What are those folks who won't apply without it, or the 86% of folks who actually, you know, want it in the first place? What are they looking for?

Speaker 3: 2:26

You know I think they're looking for, you know, a fair wage or really a benefit that that allows them to, that meets them where they are. So we have a lot of job seekers that are in certain stages of life and, whether that is, you know, they're planning to start a family in the coming years, and so they're evaluating ways that they can do that in a way that doesn't hurt them financially as they're going through. We also have a large portion of the population now that's in what we call the sandwich generation, that has aging parents as well as young children, and so having time and flexibility, both from a job protectedprotected stage, which is what we've had for a long time, but also then a way to protect their income so that they're able to do that and still retain their pay benefits.

Speaker 1: 3:13

I mean, you mentioned aging parents and managing their own health. Is there also a new, maybe hyped-up, interest in this because of mental health?

Speaker 3: 3:23

There is, I think, mental health's driven a significant portion of leave requests and also accommodation requests over the last few years, and so it is a holistic look at how do we support that employee through the conditions that they're struggling with in a way that both protects their job but also then protects their income from negative impacts.

Speaker 1: 3:46

We talked in the open a little bit about how this is really a retention and engagement tool in addition to all of the other reasons to have this. Can you talk a little bit about that?

Speaker 3: 3:57

Yeah, I think we all know that our employees are going to go through different life changes as they're working for us.

Speaker 3: 4:04

For example, at Absinthe Soft, we have an 18-week parental leave, whether you're adopting or having your own baby, and so being able to provide that benefit to give people time to bond, to spend that time with their newborn or with their newly adopted baby, then allows them to return and so I think you know, in a way, that they're prepared to come back. It doesn't rush them through the process and it allows them to stay financially whole. We've had great success of all of the employees that have taken that benefit return and they're more engaged and more committed to what they're doing at Absinthe Often. That data also plays out in the survey that we did with employees at other organizations that those that had a good leave experience, those that felt supported by their employer, were more likely to return and also more likely to promote that employer externally. So when we talk about HR really being focused on that attracting and retaining as a strategic objective, how you structure your leave benefits and particularly the pay component of that, can be a big piece of the success of them.

Speaker 1: 5:08

Can a bad experience actually push people out the door?

Speaker 3: 5:11

Oh, absolutely. I mean not surprisingly, those that had a bad experience, that didn't feel supported by their employer, were much more likely to look for another job, and also they were much less likely to really get our employees to talk positively and to get their friends and associates involved in the recruiting process. We see just much better results that way.

Speaker 1: 5:43

I know one of the questions that I'm sure most employers ask when an advisor starts talking about a paid leave program is okay, we're going to capture this pool of hours that have a dollar value to our company. What percentage of folks actually take leave in any given population during the course of a year?

Speaker 3: 6:02

Yeah, that's a great question, David, because it really varies by industry.

Speaker 3: 6:06

So you have some industries that have a very high utilization rate just due to the nature of the job and you have others that have a much lower request rate.

Speaker 3: 6:15

I think we've started to see that, normalized, anywhere between 10% and 40% of employees will take a leave on a given year. So it really is organization by organization and, honestly, when we talk about paid leave, it can be so broad in the reasons that people take it that we really encourage conversations with the employers about their specific employee population and what types of leave benefits will help them attract and retain those employees. It doesn't, you know, if I have an aging workforce, it doesn't do me a ton of good to roll out a new parental benefit because those employees won't see that benefit. And the same case is, if I'm rolling out a parental benefit, I don't want to forget about those employees that are past that time period in their life. So it's really about how do we establish an equity and a parity in the benefits that we offer so that we can attract and retain the employees that we have based on our own demographics?

Speaker 1: 7:09

You mentioned that some industries have higher utilization than others. Could you give us a couple of examples?

Speaker 3: 7:14

I think you know we see high utilization in health care and we see high utilization in others. Could you give us a couple of examples? I think you know we see high utilization in healthcare and we see high utilization in hospitality. You know those tend to be some of the higher retail has. You know higher utilization as well.

Speaker 3: 7:25

You know, I think anywhere where you know anywhere where there is a real need for that employee to be at the office, there's much more likelihood to request to leave versus more of the white collar jobs where people can kind of work around sometimes in there and be creative in scheduling. It doesn't make it less important to offer the benefit or to track the time, but it just seems to drive down those formal requests a little bit. But I do think you know certainly where we've got situations such as in a hospital where you've got to have a certain number of nurses, from a legal standpoint, to cover a certain number of beds. There's a huge need to be able to actually capture who's on leave and where and make sure you're managing those effectively.

Speaker 1: 8:07

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Speaker 3: 9:23

There certainly are. I think the legislative landscape continues to get more and more complex and for many years it was the FMLA and then very similar state laws to protect the time off, to protect jobs very similar state laws to protect the time off, to protect jobs. What we've seen in the last probably five years is a proliferation of these state laws with paid leave. So, you know, we had California state disability insurance early on, but we've seen New York and Washington and Oregon and some others roll these out. So I think we now have 13 states that have their own version of a paid family leave that are requiring employers to comply with that. And it's, you know, it's more than a payroll issue in that it many of these laws bridge between job protection as well as the pay protection, and so it's really caused employers to have to rethink you know how they manage that, how they track it and to both integrate systems but also be much more aware of the compliance piece of it.

Speaker 1: 10:16

Is that something that you just build into the system as the states come online?

Speaker 3: 10:25

Yeah, that's. I mean, compliance is a cornerstone of what AbsintheSoft does. It's monitoring all the federal laws, all the state laws, whether that's a paid leave, whether that's a family type of leave, whether it's military, any of those types, sabbaticals. You know we see a huge, you know a huge variety within all of our clients as to what they offer from a company standpoint and then how they blend that in with the ones, the laws and the regulations that they're legally required to comply with.

Speaker 1: 10:50

Are you expecting more states to come online with these kinds of mandates?

Speaker 3: 10:54

I really am. I think it's something that we're seeing. We're seeing many that are sitting out there ready to be passed or being proposed. We're not seeing a lot of action at the federal level to put a more broad umbrella across it. And ultimately, what we've seen with FMLA is, you know, it is a federal law but yet states are still passing it. So I think you know, for those of us in the industry, we're just expecting that there will be more complexity continued to be introduced over the next few years and that you know that's going to just continue to cause employers to be challenged by that. And then we're also seeing that employers are looking at it and saying, okay, just because my employees aren't in the state, don't I want to be more holistic in how I support everybody that works for me outside of just what I'm legally required to do.

Speaker 1: 11:40

How does this impact HR departments? I know a lot of advisors. Sometimes the sale is made in two different parts of the business. It's made to the C-suite and then it's made to the HR folks or the HR folks who are involved, and I know, you know they always will tell you and to a large extent at least, in my experience, it's true that they're understaffed and overworked. How does this kind of a thing help them?

Speaker 3: 12:03

Yeah, so you know, from an APSA soft standpoint, we're helping them maintain compliance, we're helping them with the administration, so we're streamlining the day-to-day work, so ultimately we're enabling them to do more with less. But what I like to say is, you know, in many cases teams are so overworked, we're allowing them to do the same amount of work, but just in compliance and efficiently, and ultimately what that benefits, then, is it enables our HR teams to be able to have those conversations with employees, to support them, to understand what that employee is going through, and that not only improves the employee experience and the satisfaction the employee has with their leave experience, but it also allows employers to be more effective in how they get people back to work and really helping there. And I think at the end of the day that drives to bottom line of attracting retaining but also productivity. And so we're helping both the HR team be more effective and efficient in how they're doing things. We're also helping the C-suite achieve those business objectives they're trying to do.

Speaker 1: 13:01

Are you also helping them to create these policies? Is that something, a service that you guys offer?

Speaker 3: 13:06

I think that's what we see a lot of advisors doing are the policies. We can help them benchmark what others are doing. But I think you know what I see is a lot of organizations. It's you know the how they want those policies to interact with their business strategy. I mean, it's it's really a you know, organization by organization, so we can tell them a lot of what their peers are doing. But ultimately it goes into what your people strategy is and what your employee demographics look like as to how you want to structure those policies.

Speaker 1: 13:35

How big a part do you feel this plays in building and maintaining employee cultures?

Speaker 3: 13:40

I think it's a huge part of the culture, especially as we look at. We have five generations in the workforce right now, and certainly Gen Z and Gen Alpha and some of the others are much more in tune with how their you know their personal relationship with their organization. So it's no longer we kind of went through lifetime employment and then we went through the job changers and now we're into the groups that really do identify with their employer. You know the company mission, and feeling that the organization supports their employees and is, you know, invested in them as people is as important as the job itself, and so, to me, structuring these benefits and helping the employees use them and support them is really important in the kind of culture you create and the success you're going to have in retaining your employees.

Speaker 1: 14:26

Other than perhaps keeping track of all the different states and their mandates and sorting those out for employers. I suspect that technology plays a big role in what you guys do.

Speaker 3: 14:36

Well it's, I mean, it is what we do.

Speaker 3: 14:39

It's providing that technology to be able to provide you know whether it's, you know chatbots to be able to do intake of requests, whether it's providing resources to be able to allow employees to understand what their benefits are, but also then, just you know, I call it administrivia, but the leave laws are very paper intensive, they're very process intensive, and so making sure that they can quickly get the right information to employees, that they can process through the workflows that need to happen, that they can make decisions in a timely manner you know, with FMLA there's the two, five, 15-day kind of timelines that are all from a compliance standpoint, mandated, and so by automating those through the technology, or at least prompting users to be able to do those on time, it enhances the compliance, but it also then enhances that ability for HR to spend the time doing the things that add value, which are the interactions with employees and the more strategic or the more complicated decision-making around what looks like a leave or how to accommodate an employee's request, and so those types of things are really important from not only compliance but also from an employee experience and satisfaction standpoint.

Speaker 1: 15:50

Well, I was going to follow up on that employee satisfaction. From an employee self-service standpoint, what are the things that employees are looking for? What do they want in a system?

Speaker 3: 16:00

You know, I think they want what they get from every other system out there, and HR systems have traditionally been slow to respond to that, which is they want usability, they want the information they need when they need it, and they don't, you know they don't want.

Speaker 3: 16:13

They want it to clarify things instead of confusing things, and so those three things, I would say, are the big ones. It's also just having ability to access it when they need to access it, versus having to do it when they're in the office or where they are. And so we're, you know, we're seeing even uses of technology, not just from a self-service of requests and viewing status and uploading documents, but also just in communications, of using text and some other. You know I don't want to call them new technologies, but in many ways the leave space is stuck in faxes, and so text is a new medium of communication for a lot of people, but it's one that's been incredibly effective for getting to employees when you need information, as well as that employee's manager, because I think we often lose sight of them in the leave process that they're looking for when that employee's coming back or how to plan and how to deliver on their business results, and so by communicating clearly with them, using the technology, you can also drive just more satisfaction there.

Speaker 1: 17:08

Has AI impacted?

Speaker 3: 17:08

you guys, the technology, you can also drive just more satisfaction there. Has AI impacted you guys? It has. I think it helps with just making sure we're communicating clearly. It helps with some of the basic Q&A intake, some of those pieces. It helps a little bit with analytics. I think we're still in some ways, you know, we're very much looking at how we best utilize it. I think the DOL and, you know, department of Labor and the EEOC have been kind of clear on how you can and can't use AI. So there's still a lot of room for people in the leave process. But there are certain pieces of automation, certain pieces of communication that we can use AI to make more efficient and effective in how we get to all the people that need to consume the information.

Speaker 3: 17:52

Seth if anybody in the audience wants to reach out and learn more. What's the best way to reach you? You can just reach us at absensoftcom there's a way to get us there. Or you can contact me, seth, at absensoftcom. But we'd love to talk more about how we're helping employers stay compliant with the leave laws and manage their leaves more effectively.

Speaker 1: 18:13

And that's a great place to end our conversation for today. Seth Turner, founder and senior advisor at Absinthe Soft Seth, thanks for a really interesting discussion.

Speaker 3: 18:18

Thank you, david, it's been fun.

Speaker 2: 18:23

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