4 Ways in Which Poor Leave Management Affects Your Business
Leave management is one of the important but often neglected tasks that every company has to take on when it comes to keeping operations running smoothly. Many people think of long periods of absence, such as parental leave, but leave is also associated with much shorter periods of time. These include bereavement leave, sick days and even leave periods.
When you start to consider all the different forms of leave, it becomes clear how important leave management really is for your business. Good leave management should be a goal for every business owner and HR manager.
Bad leave management affects you in more ways than you might think.
Here are some of the effects that poor leave management can have on your business:
Have you ever walked into a restaurant or retail store and noticed that there is a lot going on there? As you approach the checkout, you will hear the cashier apologizing. "We are understaffed today," they say.
What happened? Why should a store not have enough people? While many different factors play a role, including unpredictable periods of activity, a common reason is that someone calls in sick or is otherwise unexpectedly absent. In some cases the leave was even planned, but poor management led to a situation where there were not enough people on deck.
It is not necessarily possible to plan every sick day or bereavement, but bad leave management and poor planning has resulted in too few personnel. In return, the productivity of your company decreases. If the situation continues uncontrolled for some time, this could ultimately lead to lost profits. A single day may not do any harm, but taken together they all add up.
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When leave is poorly managed in a company, it is often up to the remaining employees to "fill the gap". Employees can be asked to take over overtime, work double shifts or give up their own free time.
The cost of overtime is clearly an issue for business owners and HR managers, but the well-being of your employees should be your top priority. If employees are constantly being asked to work overtime, take on extra shifts, or "pick up the pace" because you're short on staff in a shift, there's a higher risk of them burning out.
Burnt-out employees can be busy, have lower productivity and higher absenteeism. They may be sick more often. They may also decide to leave the company. A cycle is beginning to establish itself, and it becomes more difficult to establish good leave management the more people take leave.
Overtime costs and lower productivity have been cited as some of the consequences of poor leave management. Other factors also drive up the costs associated with leave management.
One such cost is the cost of sales. More dedicated employees can cost you more through absenteeism and lower productivity, but they can also choose to leave the company. The cost of turnover is usually higher than the salary of the employee alone. They can also include the cost of hiring and training. If you have a high turnover rate, you may want to look at your leave management practices.
What other costs are there? One is the rising cost of benefits. Employees who are burnt out may take more sick days or even be entitled to short-term disability. They may be more likely to be injured at work, which can increase the cost of workers' compensation insurance. Another cost factor is possible penalties for compliance. If you do not give your employees proper leave or do not schedule them properly, you could be fined.
Perhaps the most subtle effect of poor leave management is dissatisfied employees. It can happen that employees are no longer committed or that they are unhappy when they are denied leave. They may not notice it until the other signs increase.
Pay attention to your employees and pay attention to your practices in leave management. There are many ways to improve leave management and overcome the obstacles that come with it. Both your employees and your company will benefit.
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