A Brief Guide To The Leave Management Process

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A good leave management process ensures your daily operations continue to run smoothly while giving employees the time off they need. It’s a balancing act. You manage both business and individual needs, all of which contribute to how well your company functions and thrives overall. Leave shouldn’t be taboo. It’s a fundamental part of any business’s success as it’s crucial to maintaining your employees’ wellbeing and sense of value. That’s why we’ve put together a brief guide to leave management, its frequent pain points, and why clear processes and leave management partners can be essential in supporting your People teams.


[Read more: Caring For Your Team In The COVID-19 Pandemic]


What Is Leave Management?

Leave management includes the processes of managing employee leave requests and the policies that interact with them. Whether it’s parental leave, medical leave, family caregiver leave, or any other leave, your HR team needs to have an accurate handle on company policies, available benefits, and the various state and federal regulations that may apply to your employees.

The goal of leave management is to handle time-off requests reasonably, ensuring that neither business nor employee suffers. It’s a primary component of your HR department’s responsibilities, but it can be painful without an effective process. Managing staff requirements and employee satisfaction while ensuring you are compliant from a legal perspective is easier said than done, but it’s certainly not impossible. It can even prove to be an enjoyable and rewarding experience for all involved with the right processes and guidance.

The Challenges of Leave Management

Tracking Leave

Tracking employee leave is a fundamental part of leave management, but it’s the biggest challenge for many businesses. On average, companies can expect that 6-10% of their staff will take a leave of absence each year. Depending on the size of a company, that’s a lot of leaves.

Without a system in place, it’s easy to lose track. Your employees will have different leave types, be eligible for other benefits, and have shifting start and end dates. On top of that, if your company has employees in multiple states, your HR department must be well versed in various state regulations and offerings. As a business, you need to have clear records for time off and knowledge of applicable policies to make informed decisions when requests come in, and a blanket approach won’t work.

Payroll Errors

Payroll goes hand in hand with leave management. If there is an error or miscommunication regarding leave details, payroll will be affected. Some leave types are unpaid, and others have state and insurance benefits associated with them. If you don’t account for all of the various ways you compensate employees during leave, you may over or underpay them. Not only does this put you and your business in a tricky situation, but it can easily lead to employee dissatisfaction.

Clarity and Inclusivity

Communication is crucial for your leave management process. Without explaining your company policy clearly to your employees, you run the risk of confusion and mismanagement.

While your HR team and managers must understand how leave works, the employees themselves must grasp the policy too. They need to know what types of leave are available to them, what benefits they are eligible for, and what processes are in place to support them through the process. Further, employees should feel that their company leave policy is inclusive and represents them and their unique situation. Failure to convey company policies to employees is a recipe for frustration.

Absenteeism and Presenteeism

Two common problems associated with leave management among employees are presenteeism and absenteeism. Presenteeism refers to employees who come to work despite being sick or otherwise. On the other hand, absenteeism occurs when employees take advantage of a company’s leave policies to miss work extensively. Every year in the U.S., $36.4 billion is lost from employee absenteeism (CDC, 2020). The most common reasons for unscheduled absenteeism are personal illness (30%), family issues (20%), personal needs (27%), and stress (12%) (Circadian, 2014).

Both absenteeism and presenteeism, if not managed, can lead to a toxic or unproductive work environment for both the employees and the company. To prevent these issues, your HR team needs the proper tools and systems in place to manage and track employees’ leaves while incorporating checks into your leave management to identify these issues early on.

Why Leave Management Systems Make Sense

Given the various challenges associated with the leave management process, a robust leave management system makes sense. It would easily allow you to track and manage your employees’ leaves while helping your employees understand your leave policies better. It also ensures all legal compliance with federal, state, and local leave laws.

Rather than creating leave management systems from scratch, one alternative could be outsourcing leave management to companies with experience developing, maintaining, and tracking leaves. Businesses like Sparrow work with companies to manage the end-to-end process of an employee’s leave, including the administrative, legal, and financial aspects of leave management. 86% of respondents who use outsourcing management systems have reported very high satisfaction with their plans (SHRM, 2017).

5 Ways A Leave Partner Can Help:

1. Ensure Everything Is In One Place

Introducing a leave management system like Sparrow means you have access to an all-in-one dashboard. Employees and employers can view leave dates, payroll plans, paperwork, tracking changes, and action items as they occur. There is no margin for error. Everyone has an accurate overview of who is out of the office and when. A dashboard encourages accountability and ownership and allows for better workforce evaluation and communication.

2. Provide Customizable Leave Plans

Sparrow’s leave management system allows you to track leave requests, build a leave approval workflow, and customize each employee’s leave plan based on their specific situations. It ensures legal and internal leave policy compliance.

3. Improve Employee Experience

Going on leave, especially for extended periods, can often be stressful for employees. A smooth leave management system can help employees feel supported throughout this period, reducing any unnecessary stress.

Failure to properly manage leaves can negatively affect employee satisfaction and retention rates. 93% of employees say paid time off is an important or very important contributor to their job satisfaction (SHRM, 2016). An integrated system like Sparrow that communicates leave policies clearly, automatically updates leave balances, and integrates with payroll systems ensures that employees are cared for on every level.

4. Save Time and Money

Utilizing a leave management system allows you to streamline your processes, saving you time and money. By automating the federal, state, and local filings for both employees and HR teams, Sparrow saves between 20-40 hours per leave request.

5. Eliminate Compliance Headaches

Sparrow’s customized leave plans account for each employee’s unique needs while ensuring everything is compliant with federal, state, and local policies. Not only are employees taken care of, but your business is protected. Sparrow ensures you are up to date with any new laws or adjustments, keeping everything above board from the word go.

Leave Management Matters

Introducing a thorough leave management process will be a game-changer for your business. It will help you manage project delivery and employee output, ensuring your growth isn’t impacted. Incorporating a system like Sparrow that streamlines the process from start to finish will help you manage the details and empower your employees and make them feel valued.

To learn more about how Sparrow can help you better manage your leave, click here.