July 22, 2021
What is an Unlimited PTO Policy, and is it Right for Your Business?
You may have heard that companies like Netflix, LinkedIn, and Oracle are providing unlimited paid time off fo...
When it comes to the benefits that employees care about the most, time off consistently ranks near the top.
Providing your team the time they need to recharge can do wonders for their productivity. But you must do it in a way that doesn’t disrupt your workflow so you can meet deadlines and complete projects.
The good news is that you can do both with the right time off request policy for your team.
In this guide, we’ll cover what you need to consider when managing time off requests, the different types of employee leave, and how to manage the leave request process in a simple and efficient way.
Regardless of the size of your business, you should create clear and consistent processes around managing time off requests.
It will boost employee morale, help make sure you’re always adequately staffed, and reduce the time spent on leave management by HR.
Here are some factors to consider.
Not all time off requests from all team members have to require HR approval.
For example, there might be members of the team who handle their own responsibilities, and do not need to submit time off requests.
But you may still require them to inform HR about their absence, so the rest of the team can plan accordingly.
Your time off policy should make it clear how far in advance someone can request leave. It would most likely depend on a number of factors, but most importantly, your workflow.
You need to consider how much notice you need to be able to plan for an employee’s absence.
You may also have different policies based on the number of days being requested.
If it’s only a couple of days, then maybe a week or two is enough. But if someone needs to be on leave for more than a week, then you might want longer notice.
How frequently do you allow your team members to take time off? Or is there a limit to how many days they can take off within a specific period?
Whatever your policy, your employees should be clear about it so they can plan their requests accordingly. You should also keep your rules consistent for all your team members.
Whether you can deny a time off request will depend on the type of leave, and if there are any labor laws regulating that specific type of leave in your country.
For example, in the unfortunate situation there is a death in your team member’s family. Or if an employee gets sick or injured. In other cases, you might need to approve a time off request to make sure you remain compliant with labor regulations.
You should plan for these unexpected absences beforehand and have some contingency plans.
In other cases, if someone requests time off to go on holiday, you should be able to deny it if the leave would affect productivity or disrupt work.
But if you do have to deny a request, be sure to provide an explanation. Your team members should perceive your decisions to be fair and consistent to avoid internal conflict.
There might be times during the year when too many people request time off for the same period. It could be the holidays or summer vacation time, for example.
Ideally, you’d be able to approve all the requests that come your way. But sometimes, if you do that, you might end up short-staffed and it could disrupt your work.
Decide on the criteria to prioritize requests if you aren’t able to approve them all.
You could do it based on the number of days someone has already taken off during the calendar year. The employee with the least number of prior leave days would get priority in this case.
Or you could prioritize based on the type of leave requested. For example, someone requesting medical leave should probably get priority over someone who wants a casual vacation day.
Whatever your policy, make sure it’s clear and consistent, to avoid accusations of unfairness or bias from your staff.
Despite your best planning, sometimes you might find yourself unexpectedly short-staffed.
An employee might have a family emergency. Or someone might quit out of nowhere.
Regardless of why you’re short-staffed, the work still needs to get done. And this is why it’s a good idea to have some back up plans for unexpected absences.
For example, you could maintain a list of contractors or freelancers that can temporarily fill in until your employee returns, or you hire a new team member.
There isn’t one specific type of time off policy that would apply to every business.
You have to consider factors like the size of your company, the labor laws where you’re located, a time off policy that helps retain employees, and more.
Here’s a list of leave types to help you decide which ones make sense for your team.
People get sick. That’s just a fact of life, and something you need to plan for in your business.
However, sick leave isn’t always only for your employees to recover from illness. Some companies provide time off to allow employees to care for others in their immediate family.
Sick leave can be paid or unpaid, or a combination of both. In some jurisdictions, it might be mandatory to provide a minimum number of medical leave days. You may also allow your sick days to carry over if unused.
Parental leave includes maternity and paternity leave, and falls under the category family leave. It’s time off taken during the birth or adoption of a child.
Like medical leave, there might be regulations around family leave based on where your company and team are located. Be sure to check the local laws when deciding on your policy.
One thing to note is that even if not required by law, you should take note of your competitor’s family leave policies. If you offer more parental time off, it may help attract high performers to your company, or vice versa.
Paid time off (PTO) is a benefit that allows employees to take a certain number of days off from work but still get paid.
Generally, people take PTO for personal reasons, vacation days, self-care, to recover from illness, etc.
In the USA, there’s no minimum PTO requirements by federal law. But in the EU, companies must provide at least 4 weeks of PTO each year.
A typical PTO policy would depend on where your company is based and what your competitors are offering.
In the United States, a typical PTO policy can range anywhere between 10-30 days.
Here are a few other factors to consider for your PTO policy.
You need to plan for the unfortunate situation when a team member loses a loved one and has to take an unplanned leave of absence.
Some businesses only allow bereavement days for specific family members, usually within the immediate family.
There may be different laws around the minimum number of days, depending on where your company or your team members are based. Be sure to check local labor laws when creating your bereavement leave policy.
Standard policy in the United States is to allow 3-7 days. Try to have backup plans on how to manage your workflow without key team members for this period, if necessary.
Public holidays are days that are designated as holidays by the government. Usually all government offices, schools, banks, etc. are closed.
In the United States, examples include Labor Day, Memorial Day, Independence Day, etc.
If you have international team members, be sure to include any public holidays in their countries, so you can plan for their absence on those days.
Sometimes your employees just need time off to recharge and rejuvenate. It is good for their morale and job satisfaction.
And happy employees tend to overperform. They also create a fun and positive work environment, which improves overall productivity.
Depending on your leave policy, vacation days can be paid or unpaid.
Unpaid leave is the time your employees can take off without pay.
Typically, unpaid leave is used for self-care (separate from medical leave), to deal with a family emergency, for the birth or adoption of a child, just to name a few reasons.
In some cases, employers can issue mandatory unpaid leave (also known as furlough) to lower expenses during a difficult economic period.
Some companies (particularly remote teams) opt for unlimited vacation days.
The idea is that you allow your team members to take off as much time as they want, as long as the work gets done.
In many cases, neither the managers or the employees track vacation, because it becomes irrelevant as long as objectives are met.
The benefits of such a system is that it fosters an entrepreneurial mentality, and the team becomes more focused on results. It also demonstrates a certain level of trust, which helps build stronger relationships within the team.
Consider if providing your employees greater flexibility might be beneficial for your team’s performance.
Now that we’ve covered some tips on how to manage time off requests, and the different leave types, let’s talk about your time off policy.
Defining your policy is essential for creating a process to manage time off requests.
Your policies will act as the foundation upon which you can create leave management systems and efficiently handle time off requests.
Managing leave is a vital function of HR because your team is your most valuable resource.
You need to define a leave policy that optimizes your team’s availability, happiness, and productivity.
Your policy should help you accomplish the following.
Take these objectives into consideration when defining your time off policy.
Then go through all the leave types mentioned above to see which ones make the most sense for your team.
When creating your time off policies and leave management process, one critical factor to consider is fairness and consistency.
You should create SOPs for requesting and approving leave in a way that is fair and consistent for all your team members.
All of your employees should be familiar with your leave policies, and they should know the process of how/why you approve or deny time off requests.
If you have to deny their leave request, they should be able to refer to your leave policy and easily understand your decision.
Having clarity and consistency in your policies will promote fairness, and avoid any internal conflicts due to perception of favoritism or bias.
Once you’ve defined your leave policies, and established time off request and approval rules, you’ll need to create a system that manages the process of requesting leave.
This is known as a leave management system, or a time off management system.
Here are some of the tasks that would be part of your employee time off management process.
One of the ways your employees can request leave is by filling out a time off request form and submitting to HR.
Here’s what the form should include.
Although commonly used, there are several drawbacks to using time off request forms.
It adds to more paperwork and clutter. For larger teams, there’s a fair amount of human input involved, which could lead to errors when tracking leave.
Not to mention, with remote work on the rise, time off request forms are no longer a viable option for many companies.
A better solution might be to use a time off management software.
You can think of a time off management software as a navigation system for tracking your team’s absence calendar.
It can act as a dashboard that allows you to set a leave policy for your organization across multiple locations.
The policies are then reflected in every interaction between your team members and the HR department when requesting and approving vacation days.
Here are some of the benefits of using a time off management software over manual processes like paper forms, or even email and Excel sheet calendars.
A good time off app would allow you to set your organizations leave policy within your admin dashboard.
You can specify the types of leaves, and how many days, that are available to your employees.
You can also set guidelines that implement your time off request policy. For example, you can set how many days in advance someone has to apply for a leave, or how often they can request leave within a specific period.
A leave tracking software can simplify the time off request workflow.
Instead of each employee separately emailing your HR team, or handing in time off request forms, everyone can access the same system and request leave with a few clicks.
An app can make the approval process equally easy for your HR team. They’d be able to access all the necessary information within the system and quickly make a decision.
By streamlining the entire leave management process, you’d reduce expenses and eliminate any errors arising from human input.
Your team is your most valuable resource. Managing your team’s availability will improve your performance.
A time off management system will let you plan your staff availability in a way that helps you meet deadlines, complete projects, and meet your business objectives.
On the other hand, poor leave management can disrupt workflow and cause you to miss deadlines.
A leave management system is the ideal way to track absence for remote teams.
Many leave tracking software systems integrate with popular remote team tools like Slack, Microsoft Teams, Google Calendar, and others.
If you have international team members with different local holidays, a leave management app will let you track different holiday schedules in one company-wide calendar, so you can plan your staff availability more efficiently.
If you don’t manage your team’s time off schedule the right way, it can lead to a stressful situation down the road. You might end up short-staffed, miss client deadlines, or the quality of your work may suffer.
The good news is that you can prevent these things from happening with a leave management system.
One of the vital aspects of a well functioning leave management system is defining your time off request policies.
Review the tips and leave types listed above to come up with the best leave policies for your team.
Remember to create policies and processes in a way that is fair and consistent for all your team members.
If you have to deny a time off request, your employees should be able to easily understand the reason based on your leave policies, and not perceive any favoritism or bias from HR.
And consider trying a time off management software to implement your policies, and make the process of requesting and approving leave a breeze for your team.