Leave Management Guide

for 2021 & beyond!
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Meaning, Importance, Videos, Policies, Templates, Best Practices, and the implication in hybrid model!

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Leave Management Guide

Leave Management Guide

Timer35 Min Read


What is Leave?

Leave is simply taking an off from work day after informing the management formally and sometimes even informally.

Leaves are the days that every working professional is entitled to and paid for, apart from the holidays. Paid leaves are a part of benefits offered by companies apart from medical claim.

What Is Leave

Mostly, the earned leaves balance is carried forward every year till the time a person is employed in the same organisation. There is also a provision for EL encashment in most organisations at the time of leaving the organisation in case they remain unused.

But, after the leaves are exhausted, the employee can only take LWP i.e. leave without pay, also known as (LOP) loss of pay.

Did you know?

There was a time almost hundred of years ago when employees were not given pay for the leaves they took. However, now, all countries except for USA have made it mandatory for the employers to provide paid leaves to their employees.

Here is a snapshot of leave rules for people employed in Delhi State, as released by the government.

Leave Rules For Delhi Employees

What is Leave Management?

Leave management, as the word suggests, is all about managing employee leave requests. It can also be referred to as time-off management, encompassing, sick/ wellness leaves, parental leaves, period leaves, and more. The ultimate goal of this is to ensure employees enjoy their benefits in a hassle-free manner without letting the same impact the business functioning.

Time off management = Leave management

This s a major part of the HR department’s work scope. If done manually, leave management requires several mundane tasks to be completed and loads of paperwork to be dealt with. Needless to say, all the steps involved in the process are necessary and critical. So, to simplify and expedite the process, you must check solutions for HR functionalities in your software and use them to your benefit. They generally use a time and attendance management software to manage these requests while striking a balance between legalities and employee satisfaction. All this makes having a flawless leave management process imperative.

In today’s time, automating the leave management process is crucial to managing heaps of data better and deriving useful nuggets of information from it.

But, quite more than often, time and attendance management and leave management are considered each others equivalent. On the contrary,

Time and attendance management ≠ Leave management

Leave management is a part of time and attendance management. Timesheet , leaves, attendance all three are different but related to each other.

So, before we move on to understanding its importance and diving deep in the concept later, let’s get clear on the difference of these three.

Importance of leave management system

Leave management is important because of a myriad of reasons.

Few of the most crucial ones are as follows-
  • Record keeping: It is hard to enforce or implement the leave policy without having a record of leaves taken and remaining. Besides, paid leaves are an employee benefit and it’s their right to know their leave balance, and entitlements. Keeping a record also helps at the time of full and final settlement. Using mobile first HR solutions for employees can also keep the workforce informed in real-time about their leave stats.
  • Reporting and Analytics: This is important for staying compliant and management. It is difficult to get a holistic view and see the trend in leaves and attendance without a time off management software. Companies using one can easily see the analytics and take corrective or preventive measures, if needed.
  • Statutory compliance: Employers need to maintain record of paid leaves they have given to their employees not just because it’s nice to have it, but because they need it for compliance purpose. In most Indian states registers of these forms are kept. In karnataka the form names are form F and form 14.
  • Stop revenue leaks: If there is no track record, you can end up paying for the absences, non completed work hours. Above all, there can be disagreements between employees and the employer which is not good for brand image.
  • Smooth Business Functioning: While leaves are a benefit for the employees to use, to ensure that they do not become a reason for business losses is the responsibility of the approver, which is mostly the manager! A good way to go about this is to check the roster and approve or reject leave as per the same. Clearly, if too many people will be on leave from the same department on a given day, the work will get impacted.

Did you know?

As per a research conducted, employees consider paid vacation leaves as most important benefit at no.2 spot after healthcare benefits.

Benefits of leave management

The benefits of leave management are multiple, some of them are mentioned below-

  • A more streamlined attendance and payroll process
  • Better employee satisfaction and retention rate
  • Ensure enforcement and consistency of leave policy
  • Makes you better compliant with the employment laws
  • The error count in attendance drops significantly
  • Increases the productivity and efficiency

Challenges in leave management

If you end up choosing an incompetent leave management system that is certainly not the best fit for your requirements, you may end up facing the following challenges-

  • Low productivity
  • Poor customer service
  • Lack of proper /holiday planning
  • Low employee trust and motivation
  • Low employee satisfaction
  • Unauthorized absenteeism

What is the difference between leave management, timesheet and attendance?

Difference Between Leave Management, Timesheet And Attendance
Leave Management Timesheet management Attendance Management
Purpose To manage leaves To track work productivity To pay fairly
Inclusive of Leaves of all types Every detail of how the
work hours have been
spent daily
Combination of leave
management, timesheet+
absences and holidays
Done on As and when the need arises Daily basis Month end

Leave Management Best Practices

Building a leave management process that is fair to everyone is no ordinary task.

Here we share some of the best practices and tips to revisit your leave policy and make the required iterations.

Leave Management Best Practices

Understand the law

When you get on the pedestal to make a leave policy or revisit the existing one, you must read and re-read the labor laws- local, state and central. Making your policy compliant is the first priority. If your leave management falls short of any of the government expectation, your business can land into legal troubles unnecessarily. Being biased on the basis of the personal life circumstances of the employees may look like a good and humane step, altering the benefits will get you into legalities. This is why it is essential for the company to train its managers on how to keep leave benefits equal for one and all.

Outline leave policies-

Setting a transparent leave policy while ensuring you have taken every law impacting it into consideration is a prerequisite.

So, informing the employees for different type of circumstances and leaves you are giving the benefit of is the best. Here are a few things you must talk about in the policy-

  • The holidays you will observe
  • The way time is accrued at your company
  • The way to request a time off
  • The unused time, will it be rolled over or lost
  • The types of leaves you offer like parental leave, casual and sick leave, voting leave, and more.

Doing this and setting your leave policy right will truly help you in uplifting your company culture and making your employees more loyal and trusting in your company.

Communicate clearly

Making a just leave policy is a great start. But, leaving it there and considering your job done would make it bad and fruitless. Till the time the policy, or the new changes are being made but not communicated to the employees, they hold no relevance. Without the employees knowing that they are entitled to a particular benefit, they would not be able to use it. Send mails, use HR posts or announcements to communicate on your behalf. Further, you can ask your managers to spread the awareness in their respective teams.

Be humane

The policies must be uniformly and unbiasedly applicable to all but there are certain instances where exceptions can be made like pregnancy leave, emergency leave, period leave or disability leave. However, never base your decision on the basis of your personal liking, race, sex or work history.

Let them evolve

No matter how perfect your leave policy is, it would not remain the best forever. Changing as per the times is essential so make sure you make the amendments as and when required. Moreover, after implementation the policy you may even realise that a thing or two are not right for the employees and you. Keep identifying the flaws, learning the new and adding and omitting.

Leave Policy

The paid leaves, holidays, and other things related to leave, time and attendance management are something that every employee should be aware of and has the right to know. To make the protocol crystal clear and available to all, rather than communicating verbally once, it is documented. The elaborated document prepared by the company explaining the number, types, and procedure to avail leaves is called as ‘Leave Policy’.

The elaborated documented prepared by the company explaining the number, types, and procedure to avail leaves is called as ‘Leave Policy’.

Leave Policy

Did you know?

Employees who take a week or more of vacation, 65% feel about working for their organization a year from now, unlike 51% of those who don’t take a week off.

Importance of Leave Policy

Policies are being made to formalise a course or principle of action to be adopted by the employees. Leave policy is important so that the employee know the what , when, and how of the leave and benefits they are entitled to. It is there to make a balance between productivity, performance and satisfaction. We suggest you map the relevant leave policies to the new joiners from day first using the HCM software.

Benefits of Leave Policy

Some of the pervasive benefits of leave policy are as follows-

  • Minimises the leave benefits abuse
  • No chance of leave manipulations from employee or employer’s end
  • Increases the transparency and trust.
  • Simplifies leave process through automation of encashment, lapsing, rollover, restriction, holidays between leaves, accrual period and more
  • Smooth and timely integration of leave requests with attendance and payroll software and even timesheets

Moving forward, we will look at the leave types, rules and other important inputs that the leave policy requires. Let’s begin!

Leave types you are offering

Several leave types are deemed mandatory by the company and several are being provided by the company as a caring gesture. Some of the most common leave types that you should specifically talk about in your leave policy are-

  • Earned Leave (EL) or Privileged Leave (PL)
  • Casual Leave (CL)
  • Sick Leave (SL)
  • Compensatory Off Leave
  • Bereavement Leave
  • Leave Without Pay (LWP)
  • Maternity Leave

Did you know?

In the wake of 2020 several other leave types have also started to emerge like period leaves, burnout leaves, mental health leaves, time in lieu, self quarantine leave, amd Covid Care Leaves, etc.

Weekend policy of your company

How many offs would there be in a weekend. Will your office be off on alternate Saturdays and every Sunday or will it be 5 days, 6 days working. Never forget to document the weekend off policy of your company.

Rules for each leave type

The rules in the leave policy are its foundation, set by government or by the company, they cover various leave aspects. Hence, mentioning eligibility, quantum, frequency of leaves (annually and monthly), rules for availing, getting approval, reasons for rejection, and carry forwarding rules, is a must.

Did you know?

In HROne leave management software, numerous of leave rules/ customisations are available per leave type thereby giving you the flexibility to configure leave policy of every industry and company type.

Company’s Public Holiday Calendar

Businesses are ought to declare 8 to 14 general holidays for their employees. The state governments release the office list at the end of every year and later align it with the government holiday calendar. The difference between the two is that on public holidays companies remain shut and it’s an off for everyone. The companies also release restricted holidays or optional holidays that let the employees take leave as per their religious beliefs. The company remains open on such holidays. For instance, Onam holiday.

Presenteeism- Reason For Toxic Work Culture?

Just like absence of employee impacts productivity, presenteeism also does. Still, presenteeism is never seen in that light. Culture can be considered one of the major reasons for presenteeism. Now, let’s get into the details to know what is presenteeism, its causes, impact and ways to overcome the same.

Presenteeism- Reason For Toxic Work Culture

What is presenteeism?

Presenteeism is said to be when a employee is burning themselves out or coming to the office in adverse situation when they should rather be at home resting. The reasons for high presenteeism can be any or a couple of these.

  • On average, a shift worker costs a company $2,660 in absenteeism costs each year (Circadian, 2014)
  • Taking leaves is frowned upon
  • The unrealistic deadlines
  • The greed to get that incentive
  • Being ill but still coming to the office due to high sense of duty

Did you know?

As a matter of fact, a workplace where employees are discourages to take leaves or not given the timeline for completion of the work accordingly sees a staff that is less motivated to work. Employees end up becoming more and more resentful, and overworked.

How are presenteeism and absenteeism impacting work and culture?

While you know absenteeism is about a habit of being absent, taking unplanned leaves and taking more than the permitted limit.

Did you know?

On average, a shift worker costs a company $2,660 in absenteeism costs each year (Circadian, 2014)

You also know how it impacts the business- the work gets hampered, other employees start feeling demotivated and differentiated. But, when it is about presenteeism, employers barely see an issue. Because coming to office daily is a good thing for their business! Right?

Not really. In all ways, presenteeism leads to loss of productivity and work quality.
Presenteeism Leads To Loss Of Productivity

When the employees bring baggage of what’s impacting their or their near and dear ones health, they remain physically present in office but not mentally. It is in best faith of the employees and you to let them take an off instead of letting them and the work suffer.

How to encourage employees to take leaves and be okay with it?

The real problem lies in the culture and the way top management reacts when asked to grant a leave. Here are some ways to correct it-

  • Presenteeism rises from a culture problem, it all starts from the top. Senior managers need to understand that they are propelling things. People see them as an example. So, when a manager is sick, he should also take leave. This will encourage the employees to take off when required. The managers can use the Google like search filter in HROne to check presenteeism and absenteeism, in HR solutions for managers option.
  • As a measure to motivate employees, you should also provide them with enough sick leaves so that they can use the leaves without any worry of running out of their leave balance.
  • To help recover the employees sooner and reduce number of leaves taken, the organisation should keep an insurance plan in place so that the employees can seek medical help without any money worry. You can easily map the health benefits in the HR software you use for increased transparency.

Did you know?

93% of employees say paid time off is an important or very important contributor to their job satisfaction (SHRM, 2016)

But, in today’s time the line between presenteeism and absenteeism are quite blurred since the time employees have started working in a remote or hybrid work model. Gradually it has escalated to giving rise to presenteeism. The concept of taking leaves and day off to rejuvenate is seeming to lose its relevance. In the next section,we talk about the same.

Leave Management In Hybrid Work Model

As a repercussion of the pandemic and lockdown that followed, employees started to work from home and got accustomed to ‘Living at work’ all day long. Now that we are slowly seeping into hybrid work model, leaves are considered vain, both by the employees and the employers. While employees want to opt for work from home option in place of taking a leave, employers also seem to dislike the idea of taking a day off and would rather have their employees work from their homes if they don’t feel well or want to take a leave.

Leave Management In Hybrid Work Model

Did you know?

Encouraging wellness in office can increase employee morale.

The Repercussions Of Hybrid Work Model On Leave Management

The reason why employees have been productive from homes is simple. It’s because they mix their personal and work hours and end up extending the work to later hours. What everyone needs to understand here is that even when the professionals are working from home, their mind is not getting the rest it needs. There is a change of place, not the work. Maybe this is why in 2020, companies like Razorpay and Zomato introduced mental health leave, period leave, burnout leave and such.

Did you know?

Encouraging wellness in office can increase employee morale.

The Bright Side- Unusual leave policies for a better future of work

The Hybrid Work Model may have affected the whole leave management process; however, many companies have also implemented unique leave policies to reflect upon a culture of their own.The Hybrid Work Model may have affected the whole leave management process; however, many companies have also implemented unique leave policies to reflect upon a culture of their own.

Here are some of the most unusual and delightful ones.

Leave Policies For A Better Future Of Work
  • Mandatory leaves-HSBC offers 2 week mandatory leave that is to be taken at a stretch. In this, they are not allowed to reply to any work calls or emails. Companies that offer these leaves believe in letting the employee rejuvenate and take break from their hustling and productive self. These leaves can be availed at any time in fiscal year after informing the manager.
  • Unlimited vacation- Such leave policy is still a distant dream for Indian Companies to implement. As the title itself tells, in this leave, employees are allowed to take unlimited leaves till the time they are getting the results expected out of them. Virgin Airlines and Netflix provide unlimited leaves to their employees. This is done with an aim to focus on productivity rather than the hours put in.
  • Uncapped Sick Leave- As you might have already guessed, in this, there is no limit to taking sick leaves. Employees can take as many as they need. This can lead to absenteeism and abuse of the advantage. But still Godrej has offered uncapped sick leave to its employees. They trust their employees and say that illness doesn’t come with a count.
  • Negative leave- In this leave type, the employees are allowed to take more leaves than they are allowed to take in a year, if need be. The negative balance is adjusted in the next year’s leave balance. McKinsey is one of the companies that allows the employees to take leave above their yearly balance. In turn, this also makes the employees with the company for the long term.
  • Leave pooling- Leave pooling involves sharing or lending your leave to someone who needs it. Accenture calls it ‘Hours that help’. It is a great way to build friendships and increase the sense of belongingness, empathy and compassion.
  • Family Leave- Family leave is a great benefit offered by Deloitte. It offers 16 weeks paid leaves to new parents or the one who is caring for an ailing family member. This policy shows how invested employer is in the personal life of their people and well and how much they truly care and look beyond numbers!

“Creating a considerate leave policy helps you build long term reputation with the talent and thrive your brand as an employer.”

– Karan Jain, Co-Founder, HROne

Lastly, while like the past year, there might be times when as a company you would need to minimise spends and get ready for the worst. When you take cost cutting initiatives, don’t let it impact your employee experience negatively. Your paid leave policies will impact your employer brand.

Remember, your business can go under the weather for sometime, and employees only can actually help the company survive and come out gracefully out of the crisis.

Managing the millennial workforce is not easy. Nowadays, the mantra is to get on track with the best approach or get left behind!

So, it is high time for companies to be more and more radically transparent and honest with their employees, the HR and management must look at paid leave or leave policy issues from the lens of ethicality. Otherwise, the employees would not care, and when the bad times would be over, the wrongdoings of the company would continue to impact their employer brand and relationship with employees!