One of the first questions asked by employees during onboarding is about the process of taking leaves.
The questions could be regarding leave policies or merely applying for sick leaves. But it certainly is one of the prime benefits employees want to know more about.
No matter how exhaustive your leave policy may be, it needs to be conveyed, and a leave management system needs to be in place to make leave approvals easier for both employees and management.
What is Leave Management?
Companies are going out of their way to provide employees with a variety of leave types that are customizable to the employee. These could range from more exotic varieties like bereavement, and sabbatical leaves to the simpler paid sick leaves.
Leave management is the process of managing time-off requests so that productivity isn’t hampered and the employee can take time off when they want.
What is a Leave Management System?
A leave management system is a process by which employees apply for leaves; managers approve them and leave balances are tracked.
Initially, most companies opt for a manual process that involves a lot of busywork for the HR department.
Traditional leave management looks a little like this:
- The employee checks their leave balances using a view-only Excel sheet managed by the HR department
- The employee drops an email to their manager
- The manager looks through the work calendar and other absences of team members to approve or reject the leave
- On approval, the HR manager is also looped in who then adjusts the leave balances accordingly
On the surface, this seems pretty simple and straightforward for a few employees. But what if you have over 20 employees who work from different offices in different time zones and are eligible for different kinds of leaves?
As more variables are thrown into the mix, the leave system begins to start eating into a significant portion of the HRs bandwidth. This is when an automated leave management system can begin to look useful in terms of money and time spent.
What is an Automated Leave Management System?
An automated leave management system allows employees to track their leave balances, coordinate their leave periods with that of team members, and efficiently apply for leaves. Ideally, this leave system should be housed within instant communication platforms like Slack and Teams instead of emails to make the process painless.
When must a Business Transition to an Automated Leave Management System?
We wish we could tell you that there is a magical number here. That as soon as you hit the 20 employee mark, you need to immediately transition to a leave management system. But the truth is that it depends on what your actionable HR metrics are.
Irrespective of the size of your company, hiring HRs and using them inefficiently is a crime.
According to Ultimate Software’s Satisfaction of Work Study, 75% of employees would stay longer at an organization that listens to and addresses their concerns. HRs can do so much more with their time for value-added activities like employee engagement and retention that day to day leave follow-ups to seem trivial in comparison.
What Are the Advantages of an Automated Leave Management System?
Saving Time and Mental Bandwidth of HR Managers
Current manual leave management systems are rife with inefficiencies. As mentioned above, the HR manager is tasked with following up on each leave request and updating each employee’s leave balances. As the company grows, the time taken for collating these requests will also get larger.
According to Salary.com, the average Human Resources Manager in the United States earns $105,358 annually. Assuming that an HR manager spends around 7 hours per month tracking leave requests and updating balances for a team of 50, this adds up to 84 hours annually. That’s over two weeks of work right there, which will cost the company around $4500 for just one HR personnel.
AttendanceBot is a leave management system is priced at $2-$4 monthly per user.
I’ll let you do the rest of the math yourself. But it’s clear that there is a significant ROI in automating leave management.
No Manual Data Entry Errors
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.
The process of leave request creation in modern absence management systems:
- The employee needs to look at the team holidays to see when they can take their leaves without impacting team productivity
- The employee applies for the leave
- Depending on the approval workflow, the manager and other decision-makers are notified for approval
- The decision-makers approve or reject the leave
- The leave balances are updated automatically
- HR Managers can pull up analytics reports at will. They can also sent periodically to track employee absenteeism.
With a leave monitoring system, an employee applies for leaves straight from Slack/Teams, the manager is notified, and they approve/reject the leave. The software automatically updates the leave balances and cues up team-wide notifications for leave announcements.
Legal Compliance Requirements
If an employee at an organization for a year and has worked at least 2040 hours, they are eligible for up to 12 weeks of unpaid leaves, for self-care, or that of a family member under the Family Medical Leave Act. It also requires that their group health benefits be maintained during the leave.
A leave system allows employers to guarantee the leaves that employees are entitled to and create a culture of trust within the workplace.
Most US companies also provide additional paid-time-off, but that isn’t a legal prerequisite.
Collaborative Leave Planning
Self-service HR leave management systems empower employees to see their leave balances in real-time. They also display the leave calendars of team members through integrations with apps like Google Calendars. This information allows employees to plan leaves in advance proactively, and managers to plan shifts accordingly.
We’ve all been in positions where we’ve had to work our rear ends off to compensate for the lack of a team member. By collaborative leave planning, no one needs to work extra hours to pick up missing teammates’ slack.
Accommodate Complex Leave Policies
Leave policies for employees in the United States are often complex. There are leave accruals basis tenure, hiring negotiations, and even religious holidays. Your leave management system must be smart enough to accommodate complexities like the following without much manual intervention:
- Leaves Entitled To- If these are company-wide rules, they will be auto-populated and if they are employee type-specific rules can be set.
- Approval Workflows- Sick leaves may just require reporting manager approval, but childcare leave could require a 2-step approval process. Your FMLA tracking system will be able to create complex workflows for specific leave types.
- Carry Forward Eligibility- At the end of each year, only a certain number of leaves can roll over to the next, and that can be dealt with by an absence management system.
- Clubbing of Holidays with Weekends- Some companies do not allow employees to take leaves before long weekends to extend their holidays. Most annual leave management systems can recognize these and prevent misuse.
These are just the common complex leave policies that companies can opt for if you need help with your specific leave management system requirements reach out to us here.
Leave Analytics
Any HR process, once automated, can be used to get actionable insights and rich 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.
- 27% of U.S. respondents indicated the annual cost of administering FMLA leave for the organization was between $10,000 and $19,999. This included dedicated staff time, outsourcing expenses, legal support, internal audits and so on.
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.
What Leave Management System Should You Opt for?
AttendanceBot is the one-stop solution for all your leave tracking requirements.
Employees can just dm @attendancebot messages like ‘PTO today’ or ‘Vacation from 3rd Nov to 21st Nov’. AttendanceBot will send the PTO request for approval to the manager and update the approval status for the employee. Subsequently, it will also set up the vacation on the employee’s calendar, and cue vacation autoresponders too.
HRs can create vacation types, set up accruals, and extract powerful reports, while also letting employees view their leave balances. All absence analytics are available on a rich external dashboard that can ingest local holidays and integrate with Outlook, Google, or Apple Calendar.
Let us help you with your absence management needs, sign up for a demo today.
