Therefore this week’s article focuses on the importance of companies having a clear and concise annual leave policy in place, which will allow businesses to better budget and plan employee absences, as well as cut costs associated with unplanned leave. Having guidelines in place will result in a more involved, loyal and productive workforce.
Kronos, a workforce management company based in UK and USA, released a study last year about the Total Financial Impact of Employee Absences and the lasting effects that employee absences have on an organisation and its staff. Outcomes included how they affect fellow workers and supervisor productivity; the use of stand-in employees and overtime to cover absences; as well as direct and indirect costs of paid time off.
Results proved that the main reason of workplace stress is insufficient staffing, which leads to a loss in productivity, unfulfilled employees and higher turnover. Employee absence seems to affect colleagues the most with the following stats being reported:
- 69% of respondents stated unplanned absences add to workload
- 61% say it increases stress
- 59% believe it disrupts the work of others
- 48% state it harms employee morale
All staff members need to take time off for a variety of reasons, whether it is to go on holiday, take time to recover from sickness or even to just deal with unplanned emergencies. However, as the stats show, the impact this has on co-workers is high and should not be overlooked when approaching the issue of absenteeism.
So what are the factors to consider when planning an effective annual leave policy?
Paid leave should be substantial enough for any circumstances that may arise, as it is an employment benefit which can easily drive trust and engagement from employees. It’s important that staff can speak to managers about work-life balance whilst feeling that the company cares about them and their lives outside work. This in turn leads to a more willing and more engaged employee.
Depending on the industry, businesses should consider offering flexible work schedules, job-sharing and remote working options that give employees the chance to work responsibly without having to take paid leave. It’s important, however, to ensure that the industry the company is in, in particular healthcare and finance, supports certain work arrangements, or it could be leaving itself open to legal risks.
When discussing time off with staff members, communication is vital in working out how to develop a consistent and fair annual leave policy. This can only be done through staff interviews and feedback to find out what their priorities are.
Ensuring a time off policy is fair goes a long way when navigating complicated matters with managing staff absences and cutting costs. Staff members always notice co-workers who just happen to be absent Mondays or Fridays and often become disgruntled that they have to pick up the slack because certain employees aren’t pulling their weight. Whilst the issue is generally unavoidable to some extent, it’s important for companies to tackle the impact on co-workers by making sure policies are applied fairly.
Even with a generous annual leave policy, there may be instances where businesses have to deal with the under-performing employee and let them go, to prove to other staff that the attendance issues were unacceptable and won’t be tolerated in the workplace.
Ensure it is Automated and Measurable
Many businesses lack using a time off tracking system efficiently, which means that leave isn’t measured accurately and can be hard to manage. Companies need to allocate a specific number of days to employees for both planned and unplanned absences, including sick time, holiday time, bereavement time, potential jury duty and potential floating holidays, which will make budgeting simpler in the long run. Although, this won’t account for loss of productivity, impact on co-workers or missing project deadlines, it at least provides a base for estimating the overall cost and enables businesses to plan for them.
The impact to the business can be substantial, making it imperative that organizations have a strategy to successfully monitor the costs associated with staff absence.
Next week’s article will focus on annual leave entitlements and what companies need to know about employee rights when it comes to paid time off.
The contents of this article are necessarily expressed in broad terms and limited to general information rather than detailed analyses or legal advice. Specialist professional advice should always be obtained to address legal and other issues arising in specific contexts.