Navigating the leave management minefield without a leave management system is a tricky challenge. In an increasingly complex work environment where HR managers balance the needs of full-time employees, contingent workers, short-term contractors, and others staying on top of your workforce’s leave management need genuine planning.
When you’re equipped only with conventional tools like paper forms, emails, and excel sheets, the chances of survival are pretty low. Even minor missteps can cause disasters like resource crunch, payroll processing errors, and legal complications. Employees aren’t happy either when they can’t easily submit leave requests or when errors mess with payroll.
To stay clear of the administrative arsenic, legal landmines, and payroll pitfalls, you need a robust leave management system. Before exploring the software marketplace for an ideal leave management software, you’ll need to understand the ins and outs of the leave management process.
What Is Leave Management?
Leave management, also known as time-off management, is the process of managing employees’ time-off requests. This includes situations such as holidays, sick leave, vacation, parental leave, and emergencies. All of these time-off requests must go through a series of policies and rules specific to your business before they can be accepted.
One of the most important aspects of leave management is organizing and handling everything fairly and accurately so that your team members receive the benefits to which they are entitled. At the same time, your business continues to run smoothly when they’re gone.
Comprehensive leave benefits are important, but it’s just as essential to ensure that employees understand these benefits, can easily access them when needed. Also, the need to build a culture that supports the employee leave experience. And with the COVID-19 pandemic spotlighting the imperative to have robust and transparent leave policies in place, it’s becoming a priority.
Time and leave management is important for two main reasons:
- 1st reason: the law. As an employer, you are legally obligated to keep track of leave to pay your employees correctly.
- 2nd reason: the well-being of your employees. Having leave policies is essential to your employees’ work-life balance, as it allows them to explore non-job-related interests, relax, or spend time with their loved ones.
A Gallup study found that 23% of employees feel burned out at work very often or always, while an additional 44% of employees reported feeling burned out sometimes. With proper leave management, you can relieve stress and give your employees the time they need to rest and recharge.
Why Is Leave Management Important?
Managing employees’ days off has become an integral part of everyday HR operations. The majority of large organizations have acquired dedicated leave management solutions for their HR teams. These software and applications let them manage and track sick, annual, casual, and other types of yearly leaves of dozens and hundreds of staff without a glitch.
In contrast, many medium and small enterprises don’t consider leave management a standalone task. They don’t have any standing operating procedure to approve and reject leave requests. Most employee leaves in such organizations are processed on arbitrary grounds. Therefore, they don’t feel a need to bring in any particular resource/solution to deal with it.
Tips to Improve Employee Management
Improving employee leave management is crucial for both the employees and the company as a whole. A good leave management process increases employee satisfaction and retention, ensures compliance with labor laws, reduces the number of management mistakes, and creates policy consistency throughout the whole company.
If you’re looking for a way to improve employee leave management for your business, check out the tips below:
#1 Understand the different types of employee leave
Annual leave, a.k.a paid time off (PTO), is the first thing that comes to mind when discussing employee leave. Paid time off is often included as part of a benefits package that employees can use to attract quality talent to an employer. Considering that most workers say that a robust benefits package including paid leave is a more significant incentive than higher pay, establishing a solid leave policy can help reduce turnover and bring in high-quality new hires.
#2 Have a clear image of your business’s goals
Before you can implement a leave management program or make an existing program better, you must understand your business’s strategies and goals pertaining to time off. Once you set goals, you can formulate strategies — at the functional, business, and corporate levels — to make those objectives possible.
With this information in mind, you can then begin the process of creating or improving your leave management program.
#3 Have clear leave policies in place
There are several ways in which companies can improve their leave management policies and system.
One crucial step is to create a clear and concise leave management policy that sets forth the rules of behavior, expectations, and procedures for employees who take time off from work. Clear guidelines will also help ensure that all employees are aware of their rights or privileges while also keeping the interests of the business in mind.
Leave policies should be laid out in your employee handbook, which should, in turn, be required reading for all new hires. Policies need to be communicated clearly to managers and employees, including any updates or changes to established policy. Be sure to specify differences in leave policies for full-time employees and contingent workers to avoid potential confusion.
#4 Keep a close watch on the compliance
Another step in managing an efficient leave program is understanding the labor-related laws in the states where your workforce performs. Such customization will keep you from running afoul of any rules, ordinances, or mandates that apply to your particular business.
Many of these directives differ from state to state and industry to industry. To ensure that your leave management program is 100-percent legal, consult an attorney who is well-versed in laws that apply to your business.
Benefits of Leave Management Software
The pandemic required many employers to re-evaluate their company culture around leave policies to allow for pandemic-related leave, caregiving, and other accommodations. Whereas before, leave might have been discouraged or viewed as an obstacle, it’s often seen now as a benefit to support well-being.
HR departments have a lot of responsibilities when it comes to keeping track of employees’ time off. Imagine working for a large corporation with hundreds of employees, some of them working remotely, and having to keep track of all their time off during the holidays or other busy seasons. A good leave management software takes away the stress from HR shoulders.
A leave management system is essentially a way to streamline your leave request and approval workflow, which can save your company valuable time and money. There are various stages involved in the leave management process, and a leave management system simplifies them all for you.
Some of the main benefits of using a leave management system include:
Elimination of manual, paper-based processes
Leave management software automates the core functions of employee absence management and offers more functionality than you can achieve with spreadsheets. Managers, employees, and HR have access to a central hub for all time and attendance activities. You can say goodbye to manual absence tracking for good because time-off requests and reporting happen in the cloud.
Tip: If you aim to have a paperless office, we have some tips.
Real-time leave reporting
A leave management system gives you complete access to all employee leave data, including accruals, leave balances, and information about particular cases.
Furthermore, real-time access to employee leave data allows you to see who is approaching their leave limit and who has not taken any leave and may need encouragement to take time off. And with complete visibility into which employees have time off scheduled in the future, you can take steps to arrange shift coverage and temporary staff replacements.
Compliance with regulatory leave requirements and collective bargaining agreements
Managing your workforce requires keeping track of applicable leave laws and obligations under any established collective bargaining agreements. A leave management system allows managing leaves for all employees, whether they are working hours or on shifts, unionized, and working under a collective bargaining agreement. They have the same or different vacations each year.
Alignment of leave requests with organizational policies
With a robust leave management system, you don’t have to manually keep track of carryover rules and policies for leave exceptions. Instead, you can embed your leave policy requirements into the software. As a result, managers don’t have to worry about approving requests that fall outside of the policy, and you don’t have to wonder if accruals have been appropriately applied.
Automated notifications for more efficient leave management
Customizable notifications let you know when employees submit time-off requests, when requests are approved, and when employees are approaching time-off limits. You can also configure the software to remind managers when an outstanding request requires their attention. Instead of requests slipping through the cracks or sitting too long without a response, you can resolve requests and take quick action when there are exceptions in need of immediate attention.
Better analytics with a leave management system in place
Any HR process, once automated, can be used to get actionable insights and rich people analytics. Leave management systems are not any different in this case. With employee-specific and company-wide reports, HR managers can analyze leave data to make smart decisions.
Business leaders often underestimate the impact of absenteeism and leave analytics data on the company’s bottom line. According to an SHRM survey, the average cost of leaves taken is equivalent to 36% of an employee’s salary.
Another inference is that employees who take frequent unplanned leaves are on their way out of the organization.
Managers can easily access the collated leave analytics provided by leave management systems for analysis, reporting, and estimating the implied costs associated with leaves.
Enhanced capability of workforce management systems
Through seamless integrations with existing payroll, employee database, attendance tracking, or team’s calendar, you can ensure employee leave data syncs with other critical areas of workforce management. For example, instead of completing manual payroll calculations, you can automatically have your leave data flow to your payroll system for more accurate statements each pay period. Any process that has manual data entry is prone to errors and fudging. Once the HR managers set up leave policies and approval workflows, the process of applying leaves and updating quotas is a simple task for the software.
Improved communication between managers and employees
Leave management isn’t just about what goes on behind the scenes in HR. Your employees want and need to understand your leave policies and procedures so they can use their benefits.
When employees have an easy-to-use portal for requesting time off, leave tracking, and seeing their balances, they don’t have to run down the hallways to get their manager’s approval. Moreover, with leave bidding tools and the ability to put requests on standby, managers can enjoy a stress-free process for managing future planned leave requests. Managers also have access to historical time off data for their team, so they can easily see who is taking time off - and who isn’t. With this data, managers can speak individually with employees about using their available time off and avoiding burnout.
Main Features of Leave Management System
A leave management system automates the leave request process, making it hassle-free for both the management and the employees. The solution of your choice should be robust enough to seamlessly handle all the stages involved in a leave management process: application, approval/rejection, filing leaves, managing leave balance, and analysis.
A good leave management system should have at least the following functionalities:
Employees have access to their leave balance and check their co-workers’ days off while applying for leave. Supervisors and HR staff must have access to employee leave balance, holiday lists, department schedule, and workforce coverage to evaluate leave requests better.
Policies and procedures vary from one organization to another. A stringent leave management system with a ‘one size fits all’ mantra may not suit your needs. Look for a product that lets your staff customize the fields to fit your organization’s policies.
A cloud-based leave management system will offer multi-channel, on-the-go access and remove hassles like software installations and updates. Your staff will be able to access work-related details, manage leave, and gain insights using leave management web-apps from their mobile devices, anytime and from anywhere.
Auto-Update Leave Balance
Purchasing leave management software is useless if your HR staff has to compute and update the leave balance of your employees manually. Your attendance management system must track the leave history of all employees and display it to both employees and their managers.
Customizable Approval Workflow
You must create customizable workflows and set up a department-wise hierarchy to ensure a streamlined process. If the leave workflows are not transparent, your organization will face lower productivity, negative employee performance, or failure to follow employment laws.
The standalone software is archaic, outdated, and creates data silos. Cut repetitive tasks, save time, eliminate silos, and enable cross-functional reporting with smart integrations. Need to know who is out today? Just open your Outlook 365, and you have all the info at hand. Are you requesting a leave of absence? Open Slack. Need to approve someone's request? Another Slack notification pops on your main channel.
Your product should include a built-in reporting module that creates interactive reports based on the employee data. With employee-wise and company-wide reports, organizations can easily analyze patterns and gain actionable insights.