Strategic Benefits of Online Leave Management System

Leave Management is one of the most important HR processes, that consumes a small but significant portion of managerial time. While managers are usually overloaded with projects & hunger for resources, approving subordinates leaves is a tight rope walk. On one hand HR has to ensure compliance with leave policy & ensure availability of sufficient resources for business continuance; while on the other hand it has to improve employee satisfaction. Most of us have witnessed bitter manager-employee relation on issues of leaves. Thus, leave management becomes an important strategic task for the organization.

Strategic Value of Leave

While many companies may take the leave management “not so seriously”, research shows that poor leave management has had bad impact on business performance. It can impact project deliveries and employee morale negatively. Here are some of the critical business issues, that are directly related to leave management.

1. Meeting Project Delivery Deadlines: Availability of manpower directly impacts the project delivery schedules. While committing Project Delivery dates managers need to keep in mind the general availability of sufficient resources. They need to know what are the peak leave months/ weeks and should commit the delivery dates accordingly. Also, while crucial projects are nearing dead lines, they should approve leaves prudently.
2. Legal Issues with Leave: Each country has legal rules for employee leaves. Like FMLA (Family and Medical Leave Act) in United States - with its broad definition of medical conditions and generous leave provisions -it can scare employers, especially smaller companies who rely on a handful of key employees. Failing to comply with the complicated requirements of this law can result in serious liability for both companies and individuals. Similarly, in India THE FACTORIES ACT CHAPTER VIII, Annual Leave with Wages, lay clear guidelines for leaves. If organizations do not comply with these rules, they risk being sued by the employees and penalized by the Government Authorities.
3. Emotional Factors related to Leave: Getting leaves in time is a major employee satisfaction factor. Employees have several personal needs which requires their absence from work. Read our another post denying leaves can cause emotional stress, where we studied a case of mismanaged leave request.
4. Financial Implications of Leave: Accrued leaves are financial liabilities on organizations, especially Paid Time Offs and Privileged leaves which are to be reimbursed at the time of separation (or as and when required by employee ) according to the leave policy. If employees do not take enough leaves, the financial liability of organization increases and the HR should report this to management at regular intervals.
5. Performance Vs Leaves: Work Life Balance have a direct impact on an employee’s performance. Employees who do not take enough leaves (and suffer from stress) or the employee who takes too much leave (and is careless towards job), both have negative impact on their performance. Both type of employees need to be monitored carefully and coached on maintaining a productive work life balance.

Important Leave Metrics/ Dashboards that HR should keep an eye on:

Organizations need to capture and know several leave metrics at frequent intervals for a better understanding of its human resources.  

Read the rest of this entry on my blog Talent Junction »