Leave Management: Your 101 Guide for 2024
Most companies have policies and programs in place to address when employees need time away from work, and it’s often referred to as a company’s leave management process.
Employees feel like they are working more hours these days, and the unused number of vacation hours is telling of this. In fact, 768 million vacation days went unused, totaling around $65.5 billion in lost benefits to employees, according to research from the U.S. Travel Association.
A balance between work and personal life is important for many reasons, including helping employees avoid burnout and supporting productivity. This is where a company’s employee leave management process can help enhance an employee’s experience and promote wellbeing.
Contents
What is leave management?
Is leave management the same as absence management?
Benefits and challenges of employee leave management
The 5 key processes of leave management
Leave management software providers
What is leave management?
Leave management is the process a company implements to manage employee time-off requests. This includes various forms of time off, such as paid time off (PTO), sick or vacation days, bereavement, personal, military, educational, parental, FMLA, and unplanned leave.
Companies manage this process by implementing policies and procedures. The ultimate goal of a company’s leave management process is to allow for time off needs while minimizing disruption to the workforce — all while remaining in compliance with applicable laws and regulations.
Although leave management can be handled manually, going electronic is no exception when it comes to this process. According to a Facts and Factors market research report, the global absence leave management software market will grow by 9.3% from 2020 to 2026, reaching a staggering USD 0.95 billion!
Is leave management the same as absence management?
The terms leave management and absence management are often used interchangeably because they have many similarities; however, there are a few differences between the two, as noted in the table below.
Leaves are typically longer than 1 or 2 days.
Can refer to infrequent or non-consecutive time off, whether planned or unplanned. These types of absences are typically not covered under an employment law, such as FMLA. Excessive absenteeism, particularly unexcused absenteeism, can become attendance and performance management issues.
Extended time away from work (more than 3 days) may require supporting documentation.
May not require documentation (such as a doctor’s note, etc.) if the absence is just a day or two.
Often has a start and end date.
May not have a known or pre-determined start or end date.
Usually has a formal request and approval process.
May not require a formal or extensive request and approval process.
Benefits and challenges of employee leave management
Among the benefits to a company for having a leave management process in place include:
- Helps ensure compliance with employment laws and regulations related to time off from work
- Creates a uniform and consistent process across the organization
- Increases overall employee satisfaction and retention; employees know they have time off options
- Increases productivity and efficiency by allowing for workforce planning and minimizing disruption of operations in the workplace
- Helps recognize leave or absenteeism patterns and trends for employees and organizations.
On the flip side, challenges can present themselves in the process, such as:
- Inaccurate tracking of leave
- Payroll errors and delays
- Lack of education or clear communication to the workforce about the company’s leave policies and processes
- Disruption within the workplace if no effective leave process is in place or applied consistently.
The 5 key processes of leave management
Step 1. Define the scope of developing a leave management system
As a first step, the company needs to develop a strategy and goal for the employee leave management process. This applies to an organization that wants to either implement an initial process or enhance or update a current leave management process.
- Organize a committee to help develop a strategic vision and project plan on what they want the company’s leave management process to look like. This could include developing leave policies and procedures, implementing electronic leave management software, communication plans, and training on policies and systems.
- Include key players in the committee, such as department heads, executives, and legal counsel, to develop an initial strategy or outline
- With this information in mind, develop a project plan and timeline and drive the process of creating or enhancing the company’s employee leave management process.
Step 2. Understand the applicable laws and regulations
Understanding the legal requirements that apply to the organization is a critical component of a leave management process. Laws can differ by location, size of company, and industry.
A clear knowledge of applicable laws and their requirements will help the company remain compliant and minimize legal risks, such as employee disputes or grievances.
- Consult with internal or external legal counsel to assist with laws, changes to laws, and compliance-related requirements. While there is a cost to engage external legal counsel, it can save a company money in the long run by minimizing legal risks and subsequent legal payouts/costs
- Put a process in place to stay abreast of employment laws and regulations on a regular basis.
Step 3. Develop and communicate leave policies
Well-defined leave policies will help ensure a uniform process. These policies and procedures should be reviewed on a regular basis. Changes in laws, the size of the workforce, and other business drivers may warrant policy changes and updates.
- Develop company policies related to the employee leave management process with the legal team
- Consider developing associated leave procedures that outline a step-by-step process on the various aspects of leave. This could include types of leave offered, how to request various types of leave, how to handle unplanned leaves, how PTO or time off is accrued, the appeals process if leaves are denied, and whom to contact with any questions or concerns
- Most importantly, follow your company’s policies consistently across the organization.
Step 4. Implement or update leave management software
Most companies now use some type of electronic leave management software. This helps automate the overall process, provides reporting capabilities, reduces labor costs and associated errors that occur in a manual or “paper” process, and provides consistent application throughout the company. Leave management software should provide the ability to:
- Define leave eligibility
- Streamline leave requests and approval/denial process
- Maintain time off balances
- View and manage employee leave cases
- Track, maintain, and provide auditing ability for leave cases
- Configure leave workflows
- Offer reporting capabilities.
- Once have developed a “short-list” of potential LMSs, schedule demos with the LMS vendors. This is also a critical step in the process, as the LMS needs to deliver functionality based on the company’s needs. Get a clear understanding of what type and level of technical support the LMS vendor provides after implementation.
- Facilitate the request for proposal process from the various LMS vendors and ultimately decide which system to implement. Consult with any other key departments on budget and contract development, as required.
Step 5. Test and train
Before an LMS is rolled out, a testing period, training, and communication initiative will be necessary to help ensure a smooth and organized implementation.
- In partnership with the vendor, determine a target implementation date for the LMS
- Coordinate the LMS testing, training, and implementation with the vendor. A testing period is recommended to ensure the product works as expected and helps identify any unforeseen technical issues or limitations.
- Vendors usually offer initial training on the LMS as part of the contract. Identify who needs the training and develop a training plan and schedule.
- Lead the communications process and keep key players updated.
Leave management software providers
There are many leave management software providers available. The best systems offer all the tools needed to support the company’s goals and handle and manage leave requests while being cost-effective. According to Forbes, below is a list of 5 of the best leave management software products in 2024.
Name Target businesses Key functionality Calamari Best overall for multinational leave management Software is customizable by country. Timetastic Best for charities and certified B corporations (B-corps) Dedication to helping unemployed women get back to work by providing them with interview coaching and other interview necessities. In addition to its own dedication to charity and corporate citizenship causes, it offers a 50% discount to all charities and certified B-corps dedicated to social responsibility, transparency, and accountability. Absence.io Best for midsized and multilingual companies Offers several different packages with varying functionality. The leave management tools are in seven languages. Kissflow Best for large businesses Interactive reporting offers in-depth insights into leave trends. Automatic validations, enterprise-grade calculations of accruals and leave balances, balance updates, and reporting make recording, monitoring, and managing large-volume leave requests instantly. Integrations with other business systems. Vacation Tracker Best for customizable leave management Helps its users meet their environmental-friendly goals. For every 100 leave requests, Vacation Tracker plants one tree.
HR tip
Include a small group of managers from different departments in the new LMS user testing process. This will help get broad input into the process and will also help managers gain a better understanding and “hands-on” experience of how the leave process works.
Key takeaways
Employee leave management is crucial in keeping a department running smoothly. It allows for properly managing staffing levels and legal compliance. While leave management can be handled manually, leave management software is commonly used as it automates the process and keeps the process consistent.
The ability to take time away from work is an essential part of an employee’s wellbeing. It’s in the company’s best interest to make employee leave management a positive experience, as it helps employees when they need it most.
Weekly update
Stay up-to-date with the latest news, trends, and resources in HR
Learn more
Related articles
Are you ready for the future of HR?
Learn modern and relevant HR skills, online
