How to set up an effective time off management system

Imagine a project manager being away until just before a major product launch or a lead developer on parental leave during a website revamp. Unplanned time off like this can create havoc in your business if not managed properly.

Pleasing everyone in these situations is impossible. Time-off requests must be managed carefully, which can leave some employees disappointed.

There’s no getting around it. Or is there?

A fair, transparent time-off management policy, supported by an effective system, helps keep operations smooth, ensures employees get their well-earned PTO as expected, and minimizes disruptions from unplanned absences.

This guide will show you how to design and implement a time-off management system that prevents burnout, ensures compliance, and improves your organization’s productivity.

Common Challenges in Time Off Management

HR leaders face several common challenges when managing time off requests:

Balancing productivity and employee needs

Balancing the desire to give your hard-working employees their deserved time off and making sure there are enough hands on deck that things get done is a tricky balancing act.

The use of a time-off management system can let you visualize team schedules and stagger planned time-off requests in a way that covers key project deadlines without disruptions.

Unplanned absences

Handling unexpected absences like sick leave can throw a monkey wrench into business operations.

A time-management system with real-time updates and alerts helps adjust staffing plans with minimal disruption.

Ensuring fairness

Being inconsistent with how and why you approve or deny PTO requests can lead to resentment and dissatisfaction from perceived favoritism.

Have an automated system in place to automatically log and track time-off requests so all employees are treated equally.

Core components of an effective time off management system

Before choosing a time-off management system, understand what makes it effective and whether it aligns with your larger HR strategy.

1. Automated systems: Time-off management systems reduce human error in tracking time-off, speed up the approvals process, and send you reminders when an employee or manager is about to go on time-off.
2. Clear and transparent policies: The system should ensure that policies are easily understood and accessible to everyone. The policy should cover all leave types e.g. vacation, sick, and unpaid leave.
3. Legal compliance: Any system you use should be compliant with federal laws like the Family and Medical Leave Act (FMLA) in the U.S., which mandates 12 weeks of unpaid leave for eligible medical and family reasons. Automated systems help you stay up-to-date on state and regional variations in labor laws.

Susan Andrews, an HR Consultant at KIS Finance, says that a time-off management system makes life easier – both for you as the HR leader and everyone involved. She’s seen how something as simple as handling leave requests can turn into a huge headache if you don’t have the right system in place.

“I look for systems that offer real flexibility,” says Andrews. “Different types of leave need to be tracked separately—vacation, sick days, parental leave, you name it…Having that customization option made a huge difference because it fit our culture and our policies, rather than us trying to force a one-size-fits-all solution.”

Step-by-step guide to implementing a time off management system

The time-off management system you go with should be accessible, and intuitive, and automate as much of the time-off request process as possible. Here are the steps to take when implementing one in your organization.

Step 1: Define Policies

First, you should have a time-off policy in place that the time-off management system should execute and serve.

Outline the types of leave and paid time-off offered—such as PTO, sick leave, and unpaid leave—and specify how they accrue, whether by hours worked or yearly.

Set blackout dates for critical periods like holiday seasons or peak business times to make sure you have enough people on standby.

Step 2: Select the right software

Now that you have a policy in place, now you need a system to automate and execute it.

When choosing the best time-off management platform, consider:

• Ease of use: Employees and managers should be able to navigate the platform with minimal handholding
• Mobile accessibility: Remote teams need a way to manage requests via smartphone. A time-off management platform with a mobile app allows employees to request time off from anywhere.
• Integration capabilities: The platform should integrate well with your payroll, HR systems, and compliance tools
• Customization: The management system should ideally let you make custom policies for different departments, locations, and teams

Step 3: Communicate to employees

Now that you have your time-management system in place, it’s time to announce it to the organization.

Communication is key here. Explain how the platform benefits employees and how they can access it.

Explain the process for making time-off requests, including the steps they should take.

Provide training sessions that cover how to use the platform, check PTO balances, and submit time-off requests. Address any Q&A follow-up sessions to address any concerns or clarify any confusion.

Step 4: Train managers

It’s not just employees that need training, managers need to learn how to administer the platform too.

Training should cover how to handle time-off requests fairly and consistently. They should also learn how to manage schedule conflicts, overlapping requests, or an influx of requests during high-demand periods.

Step 5: Monitor and adjust

There will be an adjustment period where you get feedback from employees, work out the kinks, and customize the platform to your specific workflows and processes.

Set up quarterly or bi-quarterly evaluations to see if the system is achieving the goals you outlined in the first stage.  Get feedback from employees and managers to understand any challenges they have using the platform.

Employee Time Off Policy Template

Your time off policy is an extension of your HR strategy and a reflection of how your organization values its employees.

The rise of remote work has led to a need for clearly defined PTO policies to make sure employees take adequate breaks to recharge and recover. More companies are adopting and flexible and unlimited PTO to attract and retain talent, especially in tech and startup environments.

Here’s a time-off policy template you can use as the basis of your own, which you can implement using your time-off management system.

[Company Name] Time-Off Management Policy

1. Introduction

At [Company Name], we value the well-being and work-life balance of our employees. This policy outlines our approach to time off, including various types of leave, accrual rules, and the process for requesting time off.

2. Types of Leave

2.1 Paid Time Off (PTO)

[Choose one option and delete the others]

1. Option A: We offer [X] days of PTO per year, accrued at a rate of [Y] days per month.
2. Option B: We provide unlimited PTO, trusting our employees to manage their time responsibly.
3. Option C: Employees accrue PTO based on their tenure: [List tiers, e.g., 0-2 years: 15 days, 3-5 years: 20 days, etc.]

2.2 Sick Leave

Employees are entitled to [X] days of paid sick leave per year. This can be used for personal illness, medical appointments, or caring for an immediate family member.

2.3 Bereavement Leave

We offer [X] days of paid bereavement leave for the loss of an immediate family member and [Y] days for extended family.

2.4 Unpaid Leave

Unpaid leave may be granted on a case-by-case basis. Employees must exhaust all paid leave options before requesting unpaid leave.

2.5 Mental Health Days

[If applicable] We recognize the importance of mental health and offer [X] mental health days per year, separate from sick leave.

3. Accrual, Carryover, and Forfeiture

3.1 Accrual

[Customize based on your chosen PTO system]

1. PTO accrues at a rate of [X] hours per pay period.
2. Accrual begins on the first day of employment.
3. Part-time employees accrue PTO on a pro-rata basis.

3.2 Carryover

Employees may carry over up to [X] days of unused PTO to the following year.

3.3 Forfeiture

Any PTO exceeding the carryover limit will be forfeited at the end of the calendar year unless otherwise approved by management.

4. Requesting Time Off

4.1 Submission Process

1. Employees must submit time-off requests through [specify system, e.g., HRIS, email] at least [X] days in advance for planned absences.
2. Include the dates of absence and type of leave in the request.
3. For unplanned absences (e.g., sick days), notify your manager as soon as possible.

4.2 Approval Process

1. Requests will be reviewed by the employee’s direct manager.
2. Approval will be based on team coverage, project deadlines, and business needs.
3. Employees will receive a response within [X] business days.

5. Blackout Periods and Limitations

5.1 Blackout Periods

[Customize based on your industry]Time-off requests may be limited during the following periods due to business needs:

• [List specific dates or seasons, e.g., End of fiscal year (June 15 – July 15)]
• [Holiday season (December 15 – January 5)]

5.2 Busy Season Limitations

During [specify industry-specific busy seasons], employees are required to coordinate closely with their teams to ensure adequate coverage.

6. Special Considerations

6.1 Flexible Work Arrangements

[If applicable] We offer flexible work arrangements, including [list options, e.g., remote work, flexible hours]. Discuss these options with your manager.

6.2 Extended Leave

For leaves extending beyond [X] weeks, please refer to our separate Extended Leave Policy.

7. Policy Review

This policy will be reviewed annually and updated as necessary to ensure it meets the needs of our employees and the organization.

Last updated: [Date]

Make a time-off policy that gives your team enough time out

A solid time-off management system helps keep your employees happy and your business running smoothly. When you create a policy that’s fair, compliant, and transparent, and have a system to implement it, you can reduce the burden on your HR team and make sure you stay compliant with labor laws.

Workable’s detailed time-off management features can help you make custom policies and approval processes tailor-made for you and your organization. Start a free trial today.