Leave management is one of those important, yet often neglected, tasks any company must look to when it comes to keeping operations running smoothly. Many people think of long leaves, such as parental leave, but leave also accompanies much shorter periods of time. This includes bereavement leave, sick days, and even vacation time.
When you begin to consider all of the different forms of leave, it becomes apparent just how important leave management truly is for your company. Good leave management should be a goal for every business owner and HR manager.
Poor leave management affects you in more ways than you may think. Here are a few of the effects poor leave management can have on your business.
1. Lower Productivity
Have you ever walked into a restaurant or retail store and found it very busy? When you approach the checkout, you hear the cashier apologize. “We’re short-staffed today,” they say.
What happened? Why wouldn’t a business schedule enough people? While there are many different factors at play, including unpredictable periods of busyness, a common reason is someone calling in sick or otherwise unexpectedly being away. In some cases, the leave was even planned, but poor management led to a situation where there weren’t enough hands on deck.
While you can’t necessarily plan every sick day or bereavement leave, poor leave management and planning leaves you with too few staff members. In turn, your business’s productivity will be lowered. If the situation continues unchecked for some time, this could eventually cut into profits. A single day may not hurt, but taken together, they all add up.
2. Overtime and Burn Out
If leaves are poorly managed in a company, it often falls to the remaining employees to “pick up the slack.” Employees may be asked to take on overtime shifts, work double-shifts, or forego their own off-time.
Overtime costs are clearly a concern for business owners and HR managers, but your employees’ wellbeing should be a top priority. If employees are constantly being asked to work overtime, cover additional shifts, or “pick up the pace” because you’re short employees on a shift, they have a higher risk of burning out.
Burned-out employees may be disengaged, have lower productivity, and have higher absenteeism. They may be sick more frequently. They may also decide to leave the company. A cycle begins to establish itself, and it becomes more difficult to establish good leave management as more people take leaves.
3. Increasing Costs
Overtime costs and lower productivity have already been mentioned as some of the consequences of poor leave management. Other factors also push the costs associated with leave management higher.
One of these expenses is the cost of turnover. More disengaged employees may cost you more through absenteeism and lower productivity, but they may also decide to leave the company. Turnover costs are usually higher than the employee’s salary alone. They can also include the cost of hiring and training. If you have high turnover, you might want to look at your leave management practices.
What other costs are there? One is increasing benefits costs. Employees who are burned out may take more sick days or they may even qualify for short-term disability. They may be more likely to be injured on the job, which can increase workers’ compensation costs. Another cost is potential compliance penalties. If you’re not giving your employees proper leave or scheduling them properly, you could be handed a penalty.
4. Unhappy Employees
Perhaps the subtlest effect of poor leave management is unhappy employees. Employees may become disengaged or they may be unhappy if a leave is denied. You may not notice until the other signs begin to mount.
Pay attention to your employees and look to your leave management practices. There are many ways to improve leave management and overcome the hurdles associated with it. Both your employees and your business will benefit.