Leave Management: The Five Reasons Why You Need It
Your employees need to go on leave, what happens next? Leave management is the process of helping employees know how to plan, book, approve and take their leave.
Annual leave is a tricky subject in general, but a proper leave management system can help. In this guide, we help you know what to consider (and what to avoid) when choosing.
Carry over annual leave automatically with an absence management solution.
Contents
What is leave management?
Leave management involves managing a variety of time-off requests across an organisation. This might include holidays, bank holidays, sick leave, compassionate leave, emergencies or parental leave. There's a wide assortment of options.
The best organisations are prepared with a collection of policies, guidelines and rules that help employees figure out how to take time away properly. For many, this involves introducing some kind of leave management system or software.
A leave management system is a solution, often digital, that helps organisations centralise every type of leave. Employees can make requests, log days away, upload fit notes and keep track of any relevant balances. All from one place.
What is a leave management software?
Your average SME is likely going to face no less than hundreds of holiday requests every year. So, how do you manage them all? Leave management software is a type of HR software used to make time-off requests for all types of leave easier for everyone.
A great leave management software will do four things exceptionally well:
It will make it easy for employees to book a wide range of leave types.
It will give line managers or HR the opportunity to quickly review and approve them.
It will come pre-populated with relevant regional bank holidays and allowances.
It will automatically factor in accruals and carrying over annual leave.
Here's a quick example: In the UK, England, Scotland and Northern Ireland all have different numbers of bank holidays. A proper leave management software will already account for them, and showcase them in every employee's respective calendar.
Does your team need a leave management system?
If your organisation is having a tough time tracking absences, you may need a leave management software sooner rather than later. Many of our own customers have struggled in the past with managing absences over email, spreadsheets or communications tools.
That's where Personio comes into the equation. We have helped busy teams approve 4,850,796 absences with our system (and counting). Your leave management system will only be as strong as your HRIS. Make sure you choose the right one for you.
The business case for leave management software
In 2021, the Office of National Statistics in the UK reported an estimated 149.3 million working days were lost because of sickness or injury.
That is equivalent to 4.6 days per worker. According to research from the CIPD, the median yearly cost of employee absences is somewhere around £522.
Even in an organisation of 50 people, that can amount to £26,100! But, the costs head even higher when you think about the pure cost of ‘managing absences.’
Ultimately, absences in an organisation are a fact of life. People get sick, take holiday or may need away off for a host of reasons. While you can take steps to address employee absenteeism, absences will always remain.
Let’s talk about how absence management solutions can make this easier…
How does leave management software work?
The purpose of great leave management software is to make the requesting, reviewing and tracking of absences as simple as possible. This is often achieved through layers of automation and with a software that enables automation at scale.
In Personio, for example, all employees have to do is open their laptop (or their phone) and:
Click on ‘Request absence’
Select their type of absence (let’s say ‘Sick Days’)
Add the relevant dates, a potential substitute or a note
Click ‘Request’ – and we’re done!
That request is then automatically routed to a pre-defined manager or HR manager, who is able to review the request and easily approve it. They should also get an automatic notification of the request, so no one is left out of the loop.
Once approved, the requesting employee’s status (if you use something like Slack or MS Teams) would then be automatically updated to say they are sick for the day. Now, they can focus on getting better rather than writing messages to their team members!
Sounds simple, doesn’t it? The point of any absence management solution is that it should be easy to use. Especially when an employee isn’t feeling their best, the last thing your business should be doing is frustrating them further.
Five benefits of leave management systems
When it comes to managing leave across your organisation, here are five of the most important questions you should answer before you consider any solutions…
1. It saves up to 80% of your team's time
Most HR professionals would agree that processing leave requests is no fun at all. But, even if it’s not ideal, a great annual leave management software will at least help save time.
By automating the process, Personio saves HR teams 80% of their time processing these requests. How? By helping do a lot of the upfront work.
By defining people’s managers in the system, all messages and approvals go to the right people, at the right time. They receive emails and notifications, which only require a couple of clicks until they are approved.
From there, they are fed into the system directly, saving everyone valuable time.
2. It easily tracks holiday entitlements
Manage holidays efficiently and clearly with Personio
A good one will! For instance, Personio automatically tracks all vacation entitlements to the day for organisations in the UK. This even includes special vacation entitlements, like self-care days, volunteer days or any type of absence your organisation might want to track.
3. It integrates with your suite of other tools
Before you consider any of the absence management solutions out there, you need to know whether they integrate well with the tools you are already using. In our previous example, we mentioned how, when an employee is sick, their Slack of MS Teams status is automatically updated for them.
Without this kind of integration, you may be getting all of the functionality, but you are losing the critical visibility that makes leave of absence software great – alerting teams and saving time, for employees and HR managers, letting people know their colleagues are sick from work.
So, before you go any further, make sure any solution you are using offers a host of integrations that match your team’s present or future needs.
4. It offers reports that help you run your business
For HR to really take control, being able to generate reports with leave management software is a must. Given the fact that all of your information is packed tidily into one HRIS, you should have a wealth of data at your fingertips.
If you’re using Personio, that means you can not only keep a calendar overview of who is in and who is out, but you can also generate reports on leave trends in various teams, departments or across your entire organisation.
No longer needing to rely on the Bradford Factor, your HR team can actually dive deep into why people are sick, where they are sick or if absenteeism is at play. These are indicators that can lead to deeper discussions and strategies, and you can generate them in an instant.
5. It can store fit notes and other documents
For any extended period of absence, a fit note is a must. We won’t get into why they are mandatory here, but not having an easy place to report them can quickly turn into a massive headache for HR managers working with sick leave and illnesses.
To take Personio for example, employees are able to attach fit notes to their absence request at the moment, or retroactively, which the HR manager is then able to easily review and approve the absence. This is done automatically based on the length of absence.
Essentially, if your leave management software can’t account for fit notes easily and flexibly, then you are missing out on an absolutely critical component of absence management.
What kind of leave management solutions exist?
There’s a host of absence management solutions and leave management software that exists out there in the market. When you are deciding on one, we’d recommend asking yourself the following:
Is it part of a larger HRIS?
Can it integrate with other tools you use?
Will your employees be able to easily use it?
What can you do with the data it holds?
Ranked in order of importance, we recommend honing in on whether your leave management software is part and parcel of strong HRIS software. One that can house employee data in a compliant fashion, can track performance cycles or can onboard and offboard employees.
Managing leave more effectively with Personio
Personio is an all-in-one HRIS that can meet the needs of many organisations. But, we’d much rather show than tell – so, you can book a conversation with an expert today, or even kick off your own free trial and start tracking absences right this minute
