February 13, 2024
What is Discretionary Time Off? (DTO)
We’re in an age where new workplace terms are being thrown at us from all angles. One you might have heard ...
Leave management – tracking and managing employees who take time off from work – is a part of running a successful business that not enough people think about.
We get it. It’s not fun. It’s not sexy. Leave management is not as exhilarating as doing something that brings your business new customers, or boosts profit margins.
But as a business owner or HR manager, not tracking your employee vacation calendar can lead to a stressful situation down the road.
You might end up in a position where too many employees take a leave of absence at the same time causing you to miss client deadlines. Or it might result in your customers having a bad experience.
And with remote work on the rise, you may now have employees across many locations. It adds a layer of complexity when it comes to requesting, approving, and tracking leave for your team members.
The good news is that you can take control of your vacation calendar with a leave management system.
In this article, we’ll discuss what leave management is, why it’s important, best practices when creating a leave management system, and more.
You can think of leave management in HR terms as a navigation system for managing and tracking employees’ time off.
Leave management includes setting up your company’s leave policies, tracking absences and vacations, and making sure the business runs smoothly when people take time off.
It can act as a dashboard that allows you to set a leave policy for your organization across multiple locations.
The policies are then reflected in every interaction between your team members and the HR department when requesting and approving vacation days.
A well designed leave management system allows you to accomplish a few vital objectives.
It allows you to provide a benefit that is important for your team’s happiness, productivity, and morale. Leave management also lets you plan for absences ahead of time so the work isn’t disrupted.
For remote teams, a leave management system can make sure that you remain compliant with local labor laws and avoid any costly legal issues.
On the other hand, poor leave management can affect your business negatively in various ways.
Here are a few examples.
If you mismanage employee absence, you’ll likely end up short-staffed at some point. The workflow could suffer, putting you at risk of missing deadlines or your customers having a negative experience.
If you’re short-staffed, it falls upon the remaining team members to compensate for the work that isn’t getting done.
They might get stressed and be less productive than usual. And you might have to pay them overtime even if they’re too burned out to perform at their best.
Employees care deeply about the time they can take off to be with their families, pursue their passions and goals, or simply to recharge and rejuvenate.
If they face uncertainty over vacation days, it might disrupt their plans and cause them a significant amount of stress.
Over time, poor leave management might cause them to become disengaged and unhappy to the point that they quit.
Not only could you lose your most valuable team members, but you’d also have to deal with the expensive process of hiring and training new employees.
The specific leave types would depend on your agreements with each employee, local labor laws, etc., but some of the major ones are listed below.
When requesting time off, your leave management system should allow employees to specify which type of leave, so it’s easier for your HR manager to keep track.
Team members should also be able to easily check how many days they have remaining for each leave type.
Medical leave days can include sick days for your employees, or the time they need to help an immediate family member recover from illness.
Depending on where your team is based, there might be regulations on the minimum number of sick days for employees. Be sure to check your local laws when planning medical leave days.
Unpaid leave, as the name suggests, is time your team members can take off from work without pay.
Typically, unpaid leave is used for self-care (separate from sick leave), to deal with a family emergency, for the birth or adoption of a child, just to name a few reasons.
In some cases, employers can issue mandatory unpaid leave (also known as furlough) to lower expenses during a difficult economic period.
Paid time off, or PTO, is any time in which your team are compensated, despite being off work.
Your paid time off policy may vary depending on where your company is based.
For example, the EU mandates that all employees in member states must be granted four weeks of annual paid leave. On the other hand, in the United States, there are no federal requirements for paid vacation days.
Even if not required by law, providing PTO as a benefit might help you recruit and retain high performing employees.
Vacation days generally come under the larger umbrella of paid time off. Though some businesses may make a specific distinction for vacation days.
Sometimes your employees just need time off to recharge and rejuvenate. It is good for their morale and job satisfaction.
Happy employees also tend to perform better, and they create a fun and positive work environment, which improves overall productivity.
Depending on your leave policy, vacation days can be paid or unpaid.
Again, depending on your jurisdiction, you might be required to by law to provide a certain number of paid family leave days per year.
But just like paid time off, you could provide paid family leave to show appreciation for your employees, and to attract top talent to your company.
Remote teams have their own particular struggles when it comes to leave management, compared to teams based in one location.
Communication is a big thing that many remote companies struggle with, as discussions are not as easy as taking a trip down the hall to your boss’s or coworker’s office.
In terms of leave management, the barriers in communication sometimes lead to uncertainty and disruptions within the business, and unhappiness on the employee’s part from the added stress of trying to organize time off.
There’s also the potential for confusion when a team member is on vacation, or sick, or on leave for any other reason, but it hasn’t been adequately communicated to the team. It’s not as easy to notice that person X is not in the office today.
Then there are issues with team members in different locations. Some locations have their own labor laws, paid time off or sick leave laws, and their own public holidays. That’s why leave management systems for remote teams need to take into account the different needs of team members in different locations, and make sure there is a leave policy (or policies) that’s fair and appropriate for everyone in the team.
Your system should be as user-friendly as possible so that your employees and HR manager can navigate it with ease.
It should also allow you to implement the leave policy that best suits your business and team.
Let’s take a look at a few things to consider.
An easy-to-use system would save your team a significant amount of time and hassle.
If you have a small number of employees that all meet in the same office, then a manual system of requesting and tracking leave might work.
But if you have a larger team, and especially if they’re in different locations, then email and Excel sheets can cause the system to be more error prone.
A better solution might be to use a leave management software, as we’ll discuss further below.
Labor laws vary not only internationally, but they may also vary within your country.
For example, regulations on paid family leave or vacation days might be different in Colorado than in California, if you’re in the USA.
Align your leave management with the regulations in each location where your team is based to avoid any legal issues down the road.
For remote teams, you may also need to include the local holidays for your international team members when planning your vacation calendar.
For example, if you’re based in the United States, Diwali or Lunar New Year might not be on your radar when planning a leave calendar.
Listing all major holidays in each country where you have employees will allow you to plan your vacation calendar the right way. You will avoid unexpected absences, and keep your business humming along.
Many HR managers use a combination of Excel sheets and email to maintain a leave management system.
Team members request leave through email. The HR manager checks the team member’s vacation days status, the rest of the absence calendar, and they respond via email to notify the team member about their decision.
If approved, the leave days are updated and tracked in the Excel vacation calendar.
The problem is, excel, spreadsheets and email creates a lot of legwork, even for smaller teams. Furthermore, it’s a system that is wide open for human error, where a small error on someone’s part creates confusion and disruption in the team.
Your leave management system should, ideally, be automated as much as possible though the use of software tools.
The goal of your leave management should be to minimize/eliminate errors when tracking vacation days. You want the system to help avoid stressful situations like human resource crunch, or payroll processing issues.
If you have a larger team, imagine your HR manager receiving 10 different leave request emails.
They’d have to check 10 different employee vacation profiles, respond to 10 separate emails, and all the while making sure that they’re not short-staffing the company at any point in the calendar.
Not to mention, responding back and forth with multiple employees if there are questions or disputes.
A leave management software can streamline the entire process and make it much easier to navigate for both your HR manager and employees. It drastically reduces the risk of human errors when approving and tracking team absences.
Ideally, you’d want a leave tracking software that integrates with tools you’re most likely already using, like Slack and Microsoft Teams.
Here are some of the things to look for in a lave management software that would make things a lot easier for your team.
Implements your policy – Your leave software should allow you to set leave policy. For example, how many days of leave for each team member, broken down by leave type. Your policy would then guide the request/approval process for your employees and HR.
An intuitive UI for your team – The point of a leave management software is to minimize friction. It should make it easy for your team to request leave, as well as for your HR manager to make a decision that doesn’t end up disrupting workflow.
Easy vacation tracking – One of the biggest disadvantages of manual vacation tracking is that it is more likely to cause errors during human input, leading to negative outcomes for your business. Your leave software should allow you to easily and accurately track your team’s absence calendar.
Allows communication – Ideally, your leave tracking system would also allow your team and HR manager to communicate within Slack, or any other tool you’re using. It would keep all the vacation related communication in one place, making it easy to look up at a later time.
Let’s take a look at some of the key benefits of using a leave management software, especially for a remote team.
A leave tracking software makes it a breeze to request and approve leave. It eliminates the need for complex paperwork or having to keep track of emails and excel sheets.
Instead, your team members and HR manager can use one system, all within tools they’re already using like Slack or Teams.
A leave management software provides clarity and peace of mind to everyone in your team.
Every employee is clear on their vacation days status, how to request leave, and how the approval process works. It minimizes stress and uncertainty, which is beneficial for their performance and productivity.
For the HR manager, the decision of approving or denying leave requests becomes equally simple. Your leave policy makes it clear to them the different factors to consider when making a decision, removing ambiguity from the process.
When using a manual system, the total time spent between all your employees and your HR manager to request, approve, and track leave can add up. You end up wasting valuable human resources on needless busy-work.
And it can quickly become very expensive if there are mistakes that lead to payroll or legal issues. Not to mention, the loss of productivity if you end up short-staffed.
You can essentially eliminate all of these unnecessary risks and massively cut your vacation tracking expenses by using a leave management software.
Remote work is on the rise, and it is here to stay. That means new ways of communication, project management, as well as managing leave for your team members.
You might be able to manage the entire process through email and an Excel schedule if there are only 5-7 people in your organization.
But if you’re running a larger remote team and you have employees in multiple locations, then it might make sense for you to check out a leave management software tool like Flamingo.
It will streamline the process, reduce the risk of costly errors, and allow you to manage all leave-related communication in one place.
To try out Flamingo, and fix the way your company does leave management, click here.
Flamingo makes managing your team’s paid time off a breeze.