FedEx Express - Health Risk Reduction and Cost Reduction Program (2002)

Description

As a global enterprise, all FedEx Corporation companies strive to develop mutually rewarding relationships with our employees. FedEx Corporation companies are consistently recognized for our progressive and innovative policies, programs, benefits, and stimulating working environment. Our culture fosters an environment where a person's performance is what counts and productivity is highly rewarded.

Over 200,000 individuals who work in the FedEx family of companies were each hired for their unique blend of talent, enthusiasm, and ambition. They are the reason that FedEx Corporation companies are truly global and diverse and deserve credit for the company's impeccable service to our customers.

In the words of the founder, Fred W. Smith, “Our Company is built on the rock solid foundation of employee commitment.”

With annual revenues of $19 billion, FedEx is the premier global provider of transportation, logistics, e-commerce and supply chain management services. The company offers integrated business solutions through a network of subsidiaries operating independently, including FedEx Express, the world's largest express transportation company; FedEx Ground, North America's second largest provider of small-package ground delivery service; FedEx Logistics, an integrated logistics, technology and transportation-solutions company; FedEx Custom Critical, the world's largest provider of expedited, time-critical shipments; and FedEx Trade Networks, a provider of customs brokerage, consulting, information technology and trade facilitation solutions. More than 2.5 million customers are connected electronically through the FedEx information network and approximately two-thirds of its U.S. domestic transactions are now handled online.

Rising health care costs, a tight labor market and the need to increase productivity are the driving forces that fuel our innovative health promotion, injury prevention and disability management efforts.

In the mission statement of FedEx Corporation, safety is to be the first consideration in all operations. Supporting that element of the mission are various programs that have been described in the following pages for your review.

Human Capital Management

Human Capital Management is a strategic initiative with many different components that all have interactions with each other. Many different departments within FedEx “own” part of the system - Safety, Risk Management, Health and Wellness, Disability, Human Resource Services and Operations.

There are approximately 60 HCMP Managers within FedEx that coordinate and manage employees on a medical leave of absence. We have had tremendous success in keeping disability claim duration lower than the transportation industry average.

Results indicate the expected average duration for a FedEx disability claim is 61 days, compared to 107 days for the transportation industry. Total disability claims have decreased 28 percent since FY94 and from FY99 to FY00, disability claims have declined 7.2 percent.

Disability claims costs have decreased by 2.5 percent in the five fiscal years from FY96 to FY00, and at the same time, employment has increased by 20,000 employees.

The FedEx Temporary Return to Work (TRW) Policy has been instrumental to the success of the Human Capital Management Program by allowing our employees to return to work and remain productive during a partial disability. The employees work in a temporary assignment performing duties within the temporary restrictions specified by the physician.

Our own research and experience at FedEx shows the TRW Program works, particularly when we return the employee to TRW quickly. Employees who return to work TRW return to full duty sooner than employees who do not work TRW or return to TRW later in the leave.

The FedEx TRW Program:

• Encourages and facilitates earlier return to full duty

• Helps speed the recovery process

• Helps employees maintain a sense of belonging in the work group

• Allows employees to continue to contribute to the productivity of the company during the time they are unable to perform their full duties

Full-time employees in the FedEx TRW Program can work a minimum of 15 hours but no more than 28 hours per week. Part-time employees are allowed to work not less than 7 hours and no more than 70% of their average hours worked for the last 12 weeks not to exceed 21 hours.

The FedEx Temporary Return to Work Program is not a voluntary program. Employees released to return to work with restrictions must participate except where limited by State or Federal law. Work assigned to employees on TRW must comply with the restrictions specified by the employee's releasing physician. The employee's physician provides a document indicating temporary limitations and a release to light duty.

TRW hours are limited so that an employee's earnings do not exceed the 70% maximum disability allowed eligible employees based on the FedEx Short Term Disability Plan and 60% for employees who have transitioned into the Long Term Disability Plan. Limiting the earnings an employee can receive while working TRW provides an incentive for the employee to return to full duty as soon as possible.

Since 1997 our Leave of Absence Days/100 Employees has been reduced by 28.4 days, while our TRW utilization has increased from 32.4% to 54.9% (employees on a medical leave of absence).

The FedEx Human Capital Management Program has proven to be good for both the employee and the company.