Keeping track of all the leave options for all your staff can be a challenge, whether you’re accounting for the maximum amount of paid annual leave days or questioning what seems to be an unlimited number of sick days. Read on for classic leave tracking mistakes and tips on how to avoid them.
The key point is obvious: as an employer, the law demands that you track leave. For example, the Fair Work Act 2009 requires all Australian employers to keep accurate records of employee hours worked and any leave accrued and taken, including:
Community service leave
Long service leave.
The Fair Work Act prescribes how much leave is required in each case and whether it’s paid or unpaid leave. Of course, each country has different laws. Read more about the various leave types in New Zealand and the UK. It’s very important for all HR managers to keep track of the various types of leave, who’s taking it and when, and ensure that all leave payments are correct.
Apart from the legal jeopardy you may be in if you fail to track leave correctly, including fines, there could be reputational damage to you personally or to your business. A New York Times report claimed widespread problems with Amazon’s system for handling paid and unpaid leaves, in what has been described as “one of its gravest human resources problems”. In addition, in other parts of the world such as Australia, absenteeism is a significant problem and a major cost to businesses. One study suggests that absenteeism costs, on average, $3500 per employee per annum. So, what are the most common mistakes in leave tracking?
Outdated technology - or using manual systems such as spreadsheets - is one of the most common problems in keeping track of employee leave. Complex processes and opaque rules can result in admin delays and make employees rightly frustrated: research shows that as many as 44% of workers feel that way in ‘technology laggard’ businesses. If you’re using spreadsheets or any leave system that requires you to manually process information, you’re vulnerable to making data entry mistakes. These old solutions are also unnecessarily complex. Conditional formatting, inflexible templates and access issues are some of the problems with manual systems. Employees can find it all too hard to navigate, and time spent dealing with their problems is just another burden for the HR team.
Any log-in system for employees that only records log-in time — and not log-out time — can count employees as present for the entire day when they may have only worked a half-day or even a few hours. If employees are aware of this data weakness in your attendance system, some may choose to manipulate it. If you think this is a minor issue, think again. The 2019 Absence Management & Wellbeing Survey discovered that Australian companies lost 92 million working days to absence at a cost of $35 billion. In the UK, a study by health insurer and wellbeing solutions provider Westfield Health found that absenteeism cost UK businesses £14 billion in 2020 alone.
Paper-based systems are vulnerable to confidentiality breaches. There are too many opportunities for prying eyes to see information that breaches your legal requirements. Digital systems can also be problematic if security and access protocols are not well established. Confidentiality in employment is implicit, even if employees haven’t signed an agreement to that effect. Your employees are not allowed to disclose information or data about your company or employees without consent, including how many vacation days are owed, employee names, or any data on leave types and holidays. Should your employees violate this implicit agreement, the penalties can be severe, including:
Termination of employment
Civil lawsuit damages
Standing trial in a criminal case.
HR managers must clearly communicate company leave management policies to employees, as poor communication remains widespread in business. Employees often need to ask questions about how to find basic leave data like:
What is my leave balance?
How does time off accrue?
Are leave benefits unpaid or fully paid?
When employees have to chase this data, they waste time and lose productivity and the HR team gets drawn into mundane and unnecessary admin tasks. A manual leave tracker doesn’t always reveal how many days of leave are owed. Employees may overestimate how much time off they have and may find their leave applications being denied. The result can be a HR headache of queries and complaints that is entirely unnecessary.
Digital HR technology, software solutions and mobile apps have revolutionised and automated many of the tasks around leave management. The result is faster and more accurate reporting so that both HR teams and employees can operate with improved efficiency and clarity. That means productivity gains for your business. It’s time to retire paper-based and manual systems. Not only are they outdated and frustrating to use, but these days they’re unnecessary when HR software can do it all so much better. Modern, digital leave management solutions will:
Ensure legal compliance
Improve performance management
When employees, even deskless or shift-based employees, can check their leave balance on their mobile phones, many of your leave problems will disappear. Suddenly, leave allocations are transparent, clearly communicated and backed up with policies that can be accessed easily by all staff. If you want to speak to us about how the Humanforce software can streamline your workforce management efforts, including enhancing your leave tracking capabilities, please schedule a demo or contact us here.