June 6, 2024

Leave management: A guide to employee leave

leave management

The lifeblood of any organization is its employees, so ensuring that they feel respected and have a healthy work-life balance should be a top organizational priority. After all, workers are human beings who occasionally get sick or need to take personal time off. Knowing that their employer has reliable methods to manage their leave requests can make all the difference in terms of employee experience.

But some organizations struggle to implement and maintain efficient leave management processes that support the needs of their workforce or positively contribute to their bottom line—especially if they still use an outdated, unspecialized, or manual system. Their inadequate tools and policies often result in payroll errors and inaccurate paychecks, poor communication between teams, inconsistent leave request approvals, and even noncompliance with labor laws, union collective bargaining agreements (CBAs), and internal policies.

To get it right, organizations need a thorough understanding of leave management, including how it works, potential benefits and challenges, key best practices, and how powerful tools can help. Below, we’ll take a deep dive into everything you need to know about leave management so you can develop a strong policy that supports your unique workforce.

What is leave management?

Leave management is the end-to-end process of handling employee time off requests—such as PTO, FMLA, holiday, and sick time—by processing them according to rules and regulations and accurately applying them to payroll and benefits reporting. Sometimes called absence management or accrual management, this process is vital to ensuring optimal efficiency and a positive work environment. To get the most out of their leave management process, organizations should always consider the needs of both the organization and its employees.

Benefits of an effective leave management process

At first glance, the idea of giving employees time off might not seem beneficial to employers who have concerns about its impact on output and revenue. But in reality, there are many ways in which employees and the organization as a whole can benefit from a policy designed to suit the needs of both parties. An effective leave and absence management process:

Boosts employee satisfaction

All work and no play makes a disgruntled, overworked, and undermotivated employee. If you’ve ever worked for an organization that makes taking time off a difficult or stressful feat, you undoubtedly understand the impact it can have on worker morale.

But when employers make it easy for workers to request leave and provide tools that streamline the process, it fosters a healthy work-life balance and shows they care about their teams. This can help eliminate the anxiety nearly a quarter of workers feel about returning to work afterwards because they feel their managers don’t approve of taking time off. Plus, well-communicated policies mean workers always know what to expect regarding their leave. Consistency around the approval and rejection of absence requests ensures fairness and promotes a more positive employee experience.

Establishes consistency

When submitting leave requests, employees want some reliability around whether or not their time off will be approved—and they expect confirmation or denial in a reasonable amount of time. Managers also need a consistent method for receiving requests, ensuring the requested PTO is available, determining whether they’ll still have adequate shift coverage, and applying the time off to payroll and reporting.

Tools with automated features can help organizations ensure consistency when maintaining a leave management process by providing total transparency. Employees can always see their accruals, the status of their leave requests, and easily submit their time off, while managers can streamline the approval process without having to dig for context.

Supports compliance

Organizations have a responsibility to adhere to internal policies, CBAs, federal workplace laws, and state labor laws to avoid both financial and reputational risk. Balancing employee leave and compliance can become quite complex when you consider the various regulations involved and the dynamic nature of most workforces. This is particularly true if you employ a mix of full-time, part-time, and contracted workers or if you have employees who work in multiple locations. Using automated tools makes creating a leave management process that supports compliance effortless for both employees and managers.

Reduces administrative errors and inefficiencies

Without a strong process or adequate tools for leave management, it’s a huge pain to track all of the records, pull up all of the paper slips, calculate hours on the fly, and access historical records for each employee every time they request time off. It’s a logistical nightmare that hinders employee productivity and creates unnecessary stress for the entire team.

But by leveraging helpful tools, such as automated software, organizations can completely eliminate the need for manual tracking and calculations. This reduces human error and boosts efficiency by decreasing the number of hours you’d otherwise waste on correcting these mistakes.

Increases productivity

By establishing policies that allow employees to seamlessly request time off, you can provide them with the opportunity to relax, recharge, and feel motivated to return to work. And taking time off work is essential to preventing burnout and increasing productivity. In fact, those who experience burnout are 63% more likely to take a sick day and 13% less confident in their performance than their counterparts.

When workers have complete visibility and access to their benefits, it makes them feel as though their employer values both their personal and professional needs. And since 82% of employees expect their employers to provide support in achieving a healthy work-life balance, investing in a process and system that enhances leave management is crucial to ensuring employees feel empowered at work knowing they can take time off when they need it.

Streamlines leave management for employees and managers

Even for organizations who want to offer an exceptional work-life balance to their workers by way of competitive time off policies, establishing a process for managing that time off can become a headache. To stay in compliance, accurately calculate payroll, and forecast employee accrual and time off, a manual process just isn’t going to cut it.

Modern, automated systems can streamline the entire process for employees and managers alike. These systems track and centralize all the key details associated with the organization’s leave management rules and offer 24/7 self-service access via multiple devices. That way, operations aren’t held up by sticky leave policies or lackluster tools, and employees can get back to doing what they do best: their jobs.

While the right leave management process offers plenty of advantages, there are some common obstacles some employers must overcome before reaping those attractive benefits.

Challenges of leave management

Many HR and people managers face challenges when trying to leverage a leave management system that works for their teams. Many applications on the market today are one-size-fits-all, and they simply don’t offer nuanced support for a dynamic, growing workforce. These generic processes can prevent the organization from achieving productivity, profitability, and a positive employee experience. Some challenge you might face include:

Avoiding payroll errors

Ensuring accurate payroll reports is crucial to distributing accurate paychecks, staying compliant, and preventing employee turnover. But insufficient tools, human error, and poor policies all threaten an organization’s ability to avoid these costly mistakes—and getting it wrong can be catastrophic.

With approximately 60% of Americans living paycheck to paycheck, even a minor error can cause significant financial issues and negatively influence an employee’s perception of their employer. And as employee expectations continue to rise, more than half say they’re already looking for another job. If your organization fails to establish a leave management process that ensures accurate payroll and correct paychecks, your top talent will likely jump ship to competitors who have already prioritized these initiatives.

Maintaining effective communication

When it comes to any internal policy, communication is king. Yet, many organizations’ methods fall short. When employees have to spend significant time searching through documentation or browsing clunky software to find policy information, they’re effectively slowing down operations and likely getting frustrated in the process. And ineffective means of communicating about leave requests and approvals makes it even more difficult for employees and their teams to plan for their absences.

Giving employees and management teams quick, easy access to leave requests and approvals is key to preventing miscommunication and maintaining an efficient leave management process. Additionally, communicating changes to leave management policies is crucial to ensuring all employees are updated on standard operating procedures (SOPs). When employees are left to discover changes on their own, their misunderstanding of the policy can lead to issues like inaccurate accrual calculations, confusion about when and how to take leave, and perceived unfairness.

Tracking leave accurately and efficiently

Manual systems and outdated software platforms that aren’t designed to handle leave management don’t ease the burden of tracking employee leave. In fact, they make it even more complex and challenging for already-busy staff and managers, leaving much to be desired in terms of accuracy and efficiency.

If your teams still rely on tedious, time-consuming methods and tools to track and manage leave, they’re wasting precious hours that could be spent on higher-value initiatives. Plus, your organization is at-risk for manual errors that can cause issues of incorrect paychecks, noncompliance, litigation, and turnover.

Managing the complexities

Here’s the thing: Leave management is hardly ever a straightforward process that can be easily handled by spreadsheets or other tools that aren’t purposefully built for dynamic organizations. Employers often contend with complicated or layered policies they must abide by to stay compliant and maintain efficient operations. Organizations often have multiple policies for various types of workers based on factors like the number of hours they work and their seniority.

When you stack on all the different pieces and parts, you can unintentionally build a Frankenstein’s monster of policies that are nearly impossible to manage without the right tools for support. The best solution to these challenges is a leave management process and system that fits the specific needs of your organization and its workforce.

When it comes to leave management, both your employee experience and your bottom line matter. Use our ROI Calculator to see how much you can save with a leave management solution from TCP.

When it comes to leave management, both your employee experience and your bottom line matter.

Use our ROI Calculator to see how much you can save with a leave management solution from TCP.

Best practices for creating a leave management process

Developing a leave management process can be difficult if you don’t have the right tools and guidance, but following a few general guidelines can help your organization build the perfect policy for your team’s unique needs. Try implementing these best practices to get started:

1. Understand relevant employment laws

Before anything else, it’s crucial to gain a deep understanding of the employment laws that apply to your organization and employees. Depending on where your organization is located, you’ll need to ensure your leave management process complies with a set of rules around wages, number of working hours, PTO, and more. Be sure to double-check these laws through The U.S. Department of Labor (DOL) and other state-specific sources to confirm your processes are fair and compliant.

2. Establish clear guidelines

A muddy process that’s difficult to comprehend or leaves room for interpretation isn’t helpful to anyone, so make sure you set forth clear, actionable guidelines that address any potential questions or concerns. It can be helpful to create a first draft of your policy, then gather feedback from a small group of employees by encouraging them to share the areas in which they feel they need further clarification. Continue to revise your policy until you’re confident it’s crystal clear, then avoid making unnecessary changes down the line to mitigate confusion.

3. Communicate policies clearly

A leave management process is only effective if it’s clearly communicated to every employee. Set your organization up for success by ensuring your policy and process is well-documented and always available to workers, regardless of where they are. Employees should be able to access these policies and their own accrual details 24/7, and you can enable this by using automated tools that make communicating about leave management policies and requests easy.

4. Use specialized software

At this point, you might be wondering how you’re going to accomplish building an effective leave management process with your current setup. Perhaps you have several disjointed or out-of-date systems that your team uses to keep track of leave, calculate accruals, submit payroll, request time off, and communicate with one another—making a strong leave management process seem out of reach.

The good news is, specialized software eliminates siloed tasks, making every step of developing and maintaining a leave management process a breeze. A one-stop solution automatically applies relevant employment laws, applicable policies, and customizable rules to every part of your leave management process—and it offers seamless 24/7 self-service access to workers across multiple devices. That way, employees always have everything they need to understand leave management policies, view their available PTO, and request time off.

5. Keep accurate records

Manual or ineffective methods for tracking leave put your organization at risk for inaccuracies or misunderstandings, which can lead to legal troubles down the line. By investing in powerful tools that automate the process, you gain an accurate, transparent record of every detail surrounding employee leave. Plus, you can easily generate reports that give great insight into leave management and help you to continuously improve your processes for a happier, more productive workforce.

6. Be consistent

Poor leave management practices often result in inconsistencies, which tend to ruffle employee feathers. For example, if Jane’s manager approves her leave request, but rejects John’s based on an accrual miscalculation, there’s likely going to be some contention in the air. The same is true if one employee or team feels their process for requesting time off is more complicated than another’s.

To keep everyone on a level playing field and avoid accidentally playing favorites, create policies that ensure fairness and promote a positive employee experience. Automated software can help with this, too. Using your policy as a baseline, they can eliminate the inconsistencies in policy management that typically result from human error.

7. Align your process with your organization’s needs and goals

No two organizations are exactly alike, so it’s essential to build a process that works for your organization’s distinct needs, goals, and priorities. You’ll need to abide by federal and state employment laws, CBAs, and internal policies, all while considering your organization’s culture, your employee experience, and your customers’ demands.

Start by determining the rate at which your employees will accrue time off, how far in advance they’ll need to submit their requests, and when they can expect to receive a response. Among others in your process, these details should help support your higher-level needs and goals. Be sure to spend adequate time evaluating how they might impact operations, the employee experience, and, of course, your bottom line.

8. Make your process part of your standard operating procedure

Once you’ve created a leave management process that’s uniquely tailored to your individual organization, it should be relatively simple to include it as part of your standard operations. This is especially true if you invest in modern tools that integrate with your existing systems and centralize all things related to time off.

Seamless integration means employees won’t need to spend extra time re-entering data into a separate system of record to ensure accurate payroll reporting or correct paychecks. Instead, the leave management process simply becomes part of the bigger, more holistic operational picture, with total transparency, accuracy, and compliance for more efficient processes.

Part of creating the best leave management process for your organization is choosing an automated platform that configures to your specific needs, so don’t waste your time with outdated tools or single-point solutions that don’t stack up. Find the solution that’s designed to fit the requirements of your team and your operations.

Simplify your leave management process with TCP Software

Fragmented leave management tools and manual processes just don’t offer the accuracy and efficiency required to maintain compliance or a positive employee experience. To create the ideal leave management process, organizations need effective procedures and structured policies—all backed by a powerful software platform. As part of a holistic time and attendance solution, the right tool will help you manage leave and compliance complexities, automate employee accruals, and ensure complete consistency without placing unnecessary burden on staff and managers.

TCP’s TimeClock Plus takes the guesswork, uncertainty, and error out of the leave management process. Our platform makes it easy to manage multiple policies at once, match legal, internal, and CBA compliance requirements, and configure your process based on complex rules. It also automates accrual calculations for different types of leave policies—including flat accrual rates, accrual based on hours worked, and configurable distribution periods—and offers accrual forecasting based on employee hours, accrual rules, and existing leave requests.

We believe that even organizations with the most complex leave management needs shouldn’t have to choose between meeting operational goals and providing a positive employee experience. With TCP, you can implement and manage a leave management solution that maximizes your bottom line by improving accuracy, efficiency, compliance, and the employee experience.

Learn more about leave management tools that flex to meet your organization’s unique needs, or speak to an expert today to see how TCP can help you streamline your time and attendance processes.