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Time Off Management: How to do it right

time off management
7 minute read

Time off management is a term that encompasses the entire process and all of the systems that a particular company uses to track and manage employees' time away from work. 

The way companies manage this will greatly depend on local laws and various company policies (like the attendance policy). The main goal of time off management is to ensure that employees use the time off they are entitled to (either by law or company policies) while maintaining the overall productivity of teams and departments.

Time off management is there to ensure that employees taking time off work doesn’t negatively affect the company’s operational efficiency.

Four Main Types of Time Off

While time-off policies can vary between industries, companies, and countries, generally speaking, there are four main types of time off.

Pre-Approved Time Off

Pre-approved time off is scheduled in advance, usually in direct communication with HR personnel or through the HR systems and solutions the company uses.  

Pre-approved time off allows employers or relevant personnel to manage a company's workforce more efficiently and minimize the disruptions to the overall workflow (which can be brought on by employees taking time off from work). 

Some examples of this type of time off include holiday and annual leave.

Volunteer Time Off

Volunteer Time Off (VTO) is a type of time off that some businesses use when they need to balance or reduce staffing. For example, in a situation where more employees than necessary are available to cover a specific shift, employers might decide to let some employees take a day off. 

This time off can be unpaid or paid, depending on the exact circumstances. If an employer is looking to reduce payroll costs for a said shift, there’s a higher chance that the employee who takes the day off won’t be paid.

Unplanned Time Off

This category includes all the unplanned reasons for taking time off that companies are obligated to grant, either by law or their internal policies.

 Unplanned time off includes the following types of leave:

  • Sick leave
  • Maternity leave
  • Military leave
  • Bereavement leave

Flex Time Off

Flex time off offers a certain degree of flexibility to employees in choosing their work hours. 

For example, let’s say that employee X needs the morning off but has no PTO days left. With flex time off, X can take the morning off but needs to compensate for that absence sometime in the future.

Additionally, flex time off can also serve as a means to more efficiently manage workloads. Let’s say that a certain retail store is always empty (or almost empty) during Monday mornings, but is then completely full during the afternoons. 

In this case, employers can give Monday morning off to some employees (because the workload is low), but then require them to pick up a shift in the afternoon (when the demand is much higher).

How Does Time Off Management Work?

Time off management is a process that involves three key steps:

  • Employees requesting time off from work
  • Managers or HR departments reviewing and then approving or not approving the request
  • Companies keeping accurate records of employee’s leave (used and remaining)

At first glance, these steps don't seem too complicated. But, they can become very difficult to manage as the number of employees working in a company grows. 

For that reason, many medium-sized and large-sized businesses chose to go with an automated time-off management software that allows them to easily carry out all of the above-mentioned steps.

With software, companies can ensure their employees have a clear and transparent way to request leave and that HR departments have a clear overview of current and future workforce capacity (which will allow them to better plan and manage available resources).

Tips for Effective Time Off Management

Creating and maintaining an efficient time-off management process can be challenging, so it’s important to keep a few key things in mind.

1. Have Clear Policies

Establishing a clearly defined time off policy and effectively communicating it with employees is key to effective time off management. Make sure that your time off policy includes: 

  • All types of leave available to employees (e.g. holiday, sick, annual, maternity, etc…)
  • The exact criteria that make an employee eligible for a specific type of leave (e.g. for sick leave employees are required to bring in documentation from their doctor)
  • The notice requirements employees have to fulfill before going on leave (e.g. employees need to give at least one month of notice before going on annual leave)
  •  Whether there are blackout periods in which employees are not allowed to go on annual leave? Include the exact dates or time frames of those periods.

2. Use Digital Solutions

Digital solutions and automated time-off management software can streamline the entire process. A lot of them have self-service features that allow employees to easily submit time off requests online (without having to be in the office). 

Another prominent feature of these types of solutions is real-time updates that give managers or HR departments a clear overview of all time off requests (requested and approved) in one easy-to-access location.

Bonus tip: Make sure that the digital solution you go for has features that allow for smooth integration with your payroll processes, systems, or software. This will help you accurately calculate payroll based on up-to-date and real-time leave balances.

3. Create Channels for Employee Feedback

The best way to ensure your time off management process is efficient and sustainable in the long run is to have employees share their thoughts on it. 

Try to open new communication channels in which employees are encouraged to give their honest feedback on current time off management systems as well as ways to improve them. 

This will not only help your employees feel more valued but can also aid you in creating a process that equally benefits the company and its employees.

Main Benefits of Effective Time Off Management

Less Workflow Disruptions

With a good time off management system, employees can effortlessly plan their leave in advance. 

This allows managers, HR departments, or employers to proactively plan work schedules and allocate resources more efficiently, which can significantly lessen the negative impacts of time off on the overall workflow.

Increased Employee Satisfaction and Work-Life Balance

A clear, fair, and transparent time off management system will allow employees to balance their work and personal obligations easily. 

When employees know exactly how and when they can take time off work, it can work wonders for their work-life balance and overall job satisfaction.

A lot of countries have specific labor laws that govern how many days off employees can take per year. 

Good time off management will ensure that a company is compliant with all of those laws while avoiding any and all legal issues.

Accurate Payroll Processing

An effective time-off management process allows companies to track employees’ leave balances accurately. 

This, in turn, allows managers, HR departments, or employers to have an accurate tally of remaining, accrued, and used leave days. With that information, they can ensure their payroll calculator and processing are always accurate.

Promotes Data-Driven Decision-Making

The data from the time-off management process can be collected and analyzed to identify trends and patterns. 

This can help employers make data-driven decisions about staffing, resources, workforce management and planning, policy changes, and more.

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