HR Query

HR Query: How to Manage PTO Effectively in 2024

According to a recent Forbes Advisor study, 40% of Americans plan to travel more in 2024, which means employees may request more time off from work than usual. This is a concern for many workplaces as time off requests and management can put a strain on an entire company.

In this week’s HR Query, Tiffany Gamblin, Director of HR Business Services at HR software provider Paycom, discusses how time off requests and management impact an entire company, why time-management platforms are critical to keeping staff engaged and happy, and more.

Here’s what she had to say.

What are the main concerns employees have when making time-off requests?

TG: When making time-off requests, employees are often concerned about how much paid time off they have available or how long approvals will take so they can start planning their vacation. According to a recent Pollfish survey commissioned by Paycom, nearly half of U.S. employees want their managers to approve PTO requests within one business day, showing just how important it is for supervisors to provide timely decisions around time-off requests. Many businesses are still using outdated systems (or no system at all) where staff cannot easily see their accruals, have little insight into the approval timeline and have no official record of the request. These systems can leave workers feeling confused and frustrated and, overall, create a lack of trust between the employee and employer. The best time-off management provides staff with instantaneous decisions so they can plan their time off accordingly, which can help businesses avoid the costly consequences of coverage gaps and even reduce concerns of bias and discrimination by ensuring time-off policies are applied uniformly to everyone.

What are the key considerations for managers, HR and payroll, and C-suite when it comes to approving time-off requests?

TG: All company leaders should be encouraging staff to use their time off; it is a part of an employee’s overall total compensation package. However, managers must confirm work needs will still be met and teams are properly staffed when reviewing time-off requests. Managers may consider the minimum coverage threshold for their team with special attention to the busyness of the company around the time-off request period.

For some companies, their peak business season can align with busy travel periods. When several employees ask off at once, supervisors may also make decisions using criteria like seniority, who submitted first, the number of days requested or give priority to the employee with the lowest amount of time taken throughout the year. Every company and team has different staffing needs, which makes auto-decisioning software with unique criteria so impactful to a company’s productivity and bottom line.

For companies that use a manual PTO process, how much does a PTO review or approval cost the company?

TG: Each manual PTO review or approval can cost a company an average of $11.22 in labor, according to a recent Ernst & Young study commissioned by Paycom. This expense alone may seem minor, but several time-off requests over time from every employee at a company can add up quickly. Plus, these manual time-off approvals take time away from other managerial responsibilities — such as strategy or culture building — that cannot be automated.

How can HR leaders prepare for busy travel moments in the year?

TG: A 2023 Pollfish survey commissioned by Paycom revealed nearly half of Americans take at least three days off during the holiday season. Therefore, it’s critical managers and HR teams set expectations and put the necessary processes and technology in place to ensure teams feel supported and work is covered while several employees are out. Leaders can set themselves up for success by using the right HR technology that automates time-off decision-making to meet appropriate staffing levels. Employees also gain visibility into their time-off policy and can immediately understand why their time-off request will be approved or denied.

Encouraging time off throughout the entire year can also mitigate the waves of employees trying to use up their extra PTO before the end of the year, also making certain each employee is prioritizing time off throughout the year.

Why is having a clear and transparent time-off policy important for companies?

TG: Inconsistent time-off request management can cause staffing shortages, payroll inaccuracies and a negative workplace culture. It can also result in employees losing the opportunity to take their earned vacation time, leaving them feeling overworked and burnt out. Having a structured time-off policy in place and clearly communicating it to staff is critical in ensuring a fair and transparent process. In return, companies will benefit from a more productive and engaged workforce.

What are the latest tech advancements that help to ease the administration of time-off requests?

TG: Automated time-off decision-making and management platforms are the latest advancements in HR technology that help ease the administrative duties stemming from time-off requests. Solutions like these platforms make informed, automatic decisions that allow teams and departments to maintain appropriate staffing and ensure broader business needs aren’t being overlooked. Automated time-off management is especially helpful during busy travel moments when many employees are requesting time off simultaneously, as it allows HR and managers to almost eliminate the tedious review process completely. It also helps payroll teams with accurate record-keeping, thereby reducing disputes, errors, and compliance risks.

What are some unique benefits of implementing time-off management platforms?

TG: By implementing time-off management platforms, businesses can automate time-off decisions to best fit their staffing needs. Some platforms even have intuitive features that contain highly customizable criteria for time-off approvals, including coverage thresholds and consecutive days requested, as well as individual employee hours worked and level of seniority. This establishes an upfront and consistent process around time off and increases transparency in how scheduling decisions are made, boosting employees’ happiness levels and trust in their employer.

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