Employee Leave management is a simple task until an organization begins to grow.
With a few number of employees, spreadsheet and email requests will work; however, as the team increases, managing leave balance, approval, holidays, attendance, and payroll becomes challenging.
Leave management will ensure that organizations minimize mistakes and gain better visibility.
Why Is the Tracking of Leave Important?
Absences at work may be related not only to keeping track of attendance. If leave is not recorded appropriately, the consequences will include the following:
Miscalculations of leave amounts
Mistakes in payroll
Issues with scheduling
Too many workers taking leave simultaneously
Uncertainty regarding leave regulations
Problems with the audit process
This becomes especially evident in the case of small to medium businesses.
Problems Encountered With Manual Employee Leave Management
Many businesses continue to use spreadsheets, emails, and messaging apps in order to manage leave requests from their employees.
While this is a good solution for a small team, there are a number of issues that come up over time.
1. Manual calculations
The HR department might be required to make calculations of leaves, carry-forwards, and deductions manually.
An error in calculations might lead to an issue during the payroll process or limit the employee's leave.
2. Lack of visibility
A manager is unable to see how many employees on his/her team are on leave at once.
3. Ambiguous policies
Employees can ask questions like:
How many casual leaves do I get?
Can unutilized leaves be carried forward?
Does public holiday leave apply?
Do I require permission to go on leave?
What happens if I take unpaid leave?
If these questions are not answered quickly, HR departments waste time answering the same questions over and over again.
4. Challenges in combining attendance and leave records
It is often necessary to combine the attendance and leave records.
For instance, when the employee appears to be absent but his/her leave application is approved, it is not necessary for the HR department to resolve this issue manually.
What is the Absence Management Software?
An absence management software is an application that manages the leaves of employees using technology.
Based on the system, it may have components like:
Leave request
Leave approval
Leave balance
Holiday calendar
Leave accrual
Carry forward
Attendance management
Manager dashboard
Analytics and reporting
Leave approval workflows based on roles
Its primary objective is to centralize all information related to leave and reduce unnecessary manual tasks.
Leave Management Workflow
The digital workflow for managing the leave process may comprise of the following steps:
Employee initiates leave request
System checks the leave balance of the employee
Request is sent to the concerned manager
Leave request is approved or rejected by the manager
Confirmation is provided to the employee
Approved leave is added to the employee's attendance
Information can be utilized for the payroll process
Calculations on Public Holidays and Leave
Another instance where automation may be of great help is holiday calculations.
In case an employee wants to take leave from Friday to Monday, the weekends of Saturday and Sunday are not working days.
Based on the company’s policies, the system should only calculate the relevant working days.
The digital leave management system will utilize the calendar of holidays and working days set out by the company for leave calculation purposes.
There are fewer chances of making errors in manual calculations.
Leave and Payroll
The leave system might have an impact on payroll.
For instance, the calculation of an employee’s salary might require consideration of the employee’s leave that is unpaid.
When leave records and payroll records are stored independently of each other, there may be the need for manual transferring of the records between the two systems.
Assistance to Management in Planning the Team Availability
Leaves management is not just an HR issue.
Management needs to know about team availability too.
One of the tools that may be helpful for managers would be:
A simple calendar indicating approved leaves and leaves waiting for approval;
This way management will be able to foresee such scenarios as:
Several people asking for leaves at one day;
Key team members not available at once;
Fewer people working during holidays;
Possible delays of projects.
It could be helpful while planning.
Self-Services of the Employees
Self-services of employees are other useful elements of the leave management in the modern world.
In order to avoid contacting HR every time, employees can:
Apply for leaves;
Get information on leave balance;
Look through earlier requests;
See the status of approval;
See the leave history;
See leave policy.
Centralization of Leave Policies
One issue that can arise within companies is having leave policies scattered in various locations.
For instance, one of these versions could be contained in an employee handbook, another in a shared document, and another could be communicated via e-mail.
A centralized system ensures that there is only one location where the most recent policies can be accessed.
In addition, a centralized system makes it easier for HR to revise rules when changes in company policies are made.
Configuring Policies for Various Places
Companies that operate in various states or nations can have various rules governing leave.
For instance, leave eligibility, public holidays, and statutory provisions can differ depending on location.
The leave management system therefore needs to be flexible enough for organizations to configure their policies according to variables like:
Location
Department
Employee category
Employment classification
Applicable company policy
Use of Leave Information in Workforce Planning
There are many patterns that organizations can look at based on historical information:
Absenteeism in some departments
Increase in leave requests in specific time periods
Seasonal absenteeism
Short term absences
Leave demands during public holidays
This kind of analysis does not have to serve only as monitoring of the employees' performance.
For instance, if there are always less people employed by an organization during some time period, managers can prepare for this.
Leave Management and Shift Scheduling
Shift working businesses face the challenge of linking leave management with shift scheduling.
Suppose that there is a production/retail team which consists of several employees who work in shifts.
In case one employee takes leave, it might be necessary to find substitutes, rearrange shifts, check if the minimum number of staff is met and inform shift managers about that.
Connection of Leave Information with Shift Scheduling Can Help in This.
Final Thoughts
Leave and Absence Management becomes even more crucial as the company expands.
While spreadsheets may be enough for a small company, things might get too complicated as the number of employees increases, along with the complexity of leave types, locations, and policies.
A software solution for managing leaves would help structure employee requests, approvals, balances, attendance, and reporting.
The best way to handle the issue is not always automating everything right away – it is necessary to analyze the current process and come up with policies, and only then proceed with automation to eliminate redundant steps and minimize mistakes.
This approach will make leave management easier for HR, managers, and employees in SMEs.
Top comments (1)
A well-thought-out leave management system could help HR save a lot of manual labor in addition to increasing the level of transparency of processes for employees.
It is also very helpful to consider the points concerning automation, integration of attendance, and workforce planning.