Streamline Leave Management Process and Save Costs

In the past decade, Leave Management has become a top challenge for organizations.

Tracking employee absences, managing leave data, analyzing leave trends, and accurate calculation of accrued leaves are few challenges faced while managing employees leave. It becomes more stressing when employee requests for Paid Time Off goes unnoticed and further complexities arise.

Reports suggest that employees consider Paid Time Off as one of the most prevalent benefits offered by an employer. According to a report by Bureau of Labor Statistics, nearly 84% of private industry workers are allotted vacation, holiday, or personal leave, and 72% of employees receive both paid vacation and paid holidays. The cost for providing these benefits to employees is $1.98 per hour worked, and these benefits make up 6.9% of total compensation.

While offering Paid Leave is a good way to build a happy and satisfied workforce, the costs of managing leave process and overpaying employees for time that they shouldn’t be paid, add up to a big amount.

What Causes the Problem?

1. Organizations that manage their leave process manually often face challenges in tracking employee leaves accurately. Paper and spreadsheets become cumbersome for managers and HR to continuously track paid time off requests and manage leave data. The increasing number of undocumented paid leave transactions in each department results into inaccurate payroll calculations and financial leakages. This significantly impacts a company’s bottom line.

 2. Due to time constraint, managers underestimate the need to analyse and prioritize personal urgencies of employees and project delivery commitments, before denial or approval of a leave request.

The fear of missing project deadlines and performance pressure, constrain managers from freely granting leaves to their subordinates. Denying employee leave requests cause emotional distress to an employee, or even affect work relationships, employee morale and productivity. Reports suggest that employees abuse Paid Time Off by reporting false sickness (or some other pretext) in such situations. Lost productivity directly causes financial losses to an organization.

How Can a Company Save Costs in Leave Management and Avoid Overpaying Employees?

Excessive employee absences and undocumented leave transactions cannot be tolerated for longer time. A company managing leave process manually is prone to payroll errors.

Absence of an automated leave management system constrain employees to document their absence, managers to take action on leave requests and analyse employee leave data, and HR to manage leave data efficiently.

Automation helps in streamlining leave management process and saving costs involved in it. Experts suggest that 55% of payroll errors caused due to manual process, can be reduced with automation.

With an automated tool, an employer can make company’s leave policy accessible for all stakeholders. A customizable leave management software allows an employer to set up validations and conditions that needs to be duly followed when applying for a leave. This can help in lowering the number of excessive paid leaves taken by employees.

Leverage a reliable leave management system that can be easily integrated with payroll tools to easily export leave data without causing errors. This may reduce leave transactional load and increase accuracy in employee leave calculations and payroll processing.