Online leave management system offers strategic benefits

July 29, 2022

Management of leave is an important HR process that takes a significant amount of managerial time. While this process is not time-consuming, it can be not easy to approve leaves. HR must ensure that leave policies are followed and that there is enough funding to continue the business. On the other hand, it must improve employee satisfaction. We have all witnessed the bitter relationship between managers and employees when leaves are issued. This makes leave management a crucial task for an organization.

Strategic Value of Leave

Research shows that even though many companies don’t take leave management seriously, it has a negative impact on business performance. This can negatively impact employee morale and project delivery. These are the most important business issues that directly relate to leave management.

Meeting project delivery dates: 

The availability of the workforce directly affects project delivery times. Managers must ensure that they can meet the delivery deadlines. Managers should be aware of peak leave periods so they can set delivery dates. They should also approve leaves when critical projects are approaching deadlines.

Legal issues:

Every nation has its laws regarding employee leave. Employers, particularly smaller ones, can be scared by the Family and Medical Leave Act (FMLA) in the United States. It has a broad definition of medical conditions and extensive leave provisions. Failure to follow the complex requirements of this law could result in severe liability for both individuals and companies. The Indian FACTORIES Act Chapter VIII, Annual Leave with Wages, also outlines clear leave guidelines. These rules are more difficult to follow and can result in employees being sued or penalized by the government.

Emotional factors:

Timely leaves are a key factor in employee satisfaction. There are many personal reasons that employees have to be absent from work. We have another post on how denying leave can cause emotional stress, where we examine a case of a poorly managed leave request.

Financial implications: 

Accrued Leaves are financial liabilities for organizations, particularly paid and privileged leave that must be repaid at the time of separation. The financial responsibility increases if employees don’t take enough leave. HR should inform management at regular intervals.

Performance vs Leaves:

A person’s work-life balance can affect their interpretation. Employees who don’t take enough leave (and who are stressed), as well as employees who take too much (and who neglect their jobs), can have a negative effect on their performance. Both employees should be closely monitored and coached to ensure a healthy work-life balance.

a) Leave trends 

Employees are more likely to take leave during holidays. The HR manager should be aware of when employees are applying for leave. These metrics aid senior management in making decisions, especially regarding project delivery dates.

b) Employee availability 

Indicates the number of employees available to work during the current quarter.

c) Employee leaves balance

This displays the left balance for all employees, department-wise and company-wide. This allows the finance department to estimate the accrued leave liabilities of the company at any given time.

d) Leave rejection

This shows the number of leaves that the manager rejected during the last quarter/six months. Rejections are becoming more frequent and can have a negative impact on employee morale.

e) Leave Acceptance

This indicates the number of leaves managers have approved for a particular duration.

f) Employees who took no leave during the quarter

This gives you a list of employees who did not take any leave during the quarter. If employees are under stress, HR managers should investigate the possible reasons and counsel them.

Technology’s role

The use of HR technology can simplify and improve leave management. It can also streamline the data within an organization. Excel or manually managing leave data and compliance can prove difficult. These are the key issues that an automated leave management system could solve:

  • Accurate Information:

    Provides precise information about leave trends, balances and leave amounts. This allows you to project available resources at any time.

  • Conveying leave policy rules:

    Utilizes in-built systems that give leave policy rules such as maximum and minimum days, holiday calendar management based on location, etc. Before applying for vacation days, employees can refer to the leave policy at any time.

  • Leave policy compliance:
    Often, managers and employees are unaware of organizational leave policies. The Leave Management System has inbuilt rules that prevent managers or employees from ignoring rules when applying for or appraising leaves.
  • Get instant information about employees’ leave history:

    Allows managers and HR to view the leave history of applicants. You can also extract the leave history of the company or department immediately.

  • Time-saving:

    Online visibility of leave balance can relieve a great strain on HR, where up to 15% of their time is spent on employee queries about leave balance.

  • Increases discipline:

    Leave can be combined with attendance to improve accuracy and build a field within any organization. Some companies might have a policy that requires employees to take a leave of absence without permission from their manager.

  • Multilocation holiday management:

    Leave can be used with specific holiday calendars to calculate the number of days an employee has been absent.

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