Having control of employee attendance is very important. However, it is equally important to be able to manage their absence. Learn why and what the consequences are if you are not able to.

Many companies have already seen the value of having a digital solution for registration of time & attendance, supporting employee clock-in and clock-out, overtime and supplements to ensure the correct payroll basis. The solution might even support registration of which tasks and projects the working hours are spent on. This saves time for both employees, payroll administration and finance, and provides accurate data for planning and follow-up.

However, it is not only important to have control of employee attendance. It is equally important to be able to manage their absence – planned as well as unplanned.

Most T&A software solutions support the ongoing registration of sickness, holiday and other types of absence for payroll calculation purposes.

But what about the underlying administration of the different absence reasons? Why is it important to have control of it? And what are the consequences of not having it?

Structured follow-up on sickness absence

Every year, sickness absence costs companies billions of pounds. This does not only lead to lost production but might also result in expensive overtime payment to colleagues who must work extra. Thus, there may be a great financial gain in focusing on this particular area.

#1: Complete overview of sickness absence in real time

However, many companies do not have a complete overview of the total sickness absence. This means they lack knowledge of:

• Absence reasons and which departments that are most affected
• How much the sickness absence costs the company right now
• Whether the trend is upward or downward
• If the company has more absence due to illness compared to the rest of the sector

This makes it difficult to structure the follow-up on sickness and work dedicated to reduce the absence and strengthen the work environment. But that is not all …

#2: Control of absence talks and sick pay entitlement

The lack of overview also makes is hard for companies to:

• Have an overall view of which employees to call in for absence talks and when
• Manage various periods of illness where the employee is entitled to different kinds of pay or no pay resulting in incorrect remuneration of the employees
• Control if an employee exceeds the entitlement of company-paid sick days over a rolling 12-month period

Correct holiday management in time

Most employees who work 5 days a week are legally entitled to 28 days’ paid holiday per year. The annual leave begins to accrue as soon as the employee starts his/her job. The leave year can vary from company to company but usually runs from January to December or financial year April to March. If an employee cannot take all of the leave entitlement, he/she can carry over some or all of the untaken leave into the next leave year.

#3: Correct holiday entitlement calculation

It is important to be able to calculate and manage accrual of holiday leave, also according to length of service, age or part time employment – as well as keeping track of whether the accrued holiday is with or without pay – to ensure that the employee gets the holiday leave he/she is entitled to by law and company-specific policies.

#4: Planning of holiday leave in time

Usually, both the employee and the company are interested in getting holiday planning done in due time. This provides the best preconditions for ensuring the necessary staffing in relation to the tasks that must be solved. Thus, it is important to have a precise and updated overview of the employees’ holiday balances. In this way, employees, managers and HR can keep an eye on that holidays are taken in time. Correct registration and follow-up become crucial! Otherwise, it will cost the company …

If the follow up is inadequate, the company might end in a situation where several employees have (too) many days left at the end of the leave year. This will put the company’s production under pressure. Thus, it is important that the company and the employee agree on what should happen to the untaken days well in advance. Should they be transferred to the next year or paid out?

#5: Correct carry-over of leave

If an employee gets 28 days’ leave, a maximum of 8 days can be carried over. If he/she gets more days, the company may allow the employee to carry over any additional untaken leave. However, different rules apply if the employee was unable to take annual leave because he/she was off sick.

In many companies, the process for carrying over unused holiday is typically based on forms or emails between employee and manager. This is not only time-consuming for all parties but might also give rise to errors. And if there is no agreement in place, then the employee will lose the holiday completely.

#6: Consistency between registered and taken holiday

If registration of holiday leave is inadequate, the company might end up transferring or paying out non-used entitlement that the employee has actually taken. This means that the company will pay double for the holiday.

Digitalise the processes!

But it doesn’t have to be like this … By digitalising your absence management processes, you can reduce a number of manual workflows in the company. It will not only save time for all parties and ensure that you comply with rules and policies. It will also make vital information available to employees, managers and HR to ensure relevant follow-up in time. This will provide financial gains that will affect the company’s bottom line results.