Excel spreadsheets and email strings simply won’t cut it, says one business leader – HR must start monitoring PTO more effectively.
Managers and HR professionals know that managing Personal Time Off (PTO) involves more than covering for an employee and making sure work is completed. Still, most companies track PTO using ineffective, outdated and inadequate tools. Memory, hallway conversations, Excel spreadsheets, sticky notes and email threads are fairly common.
PTO should be managed with the same care and precision the finance team uses to look after the company bank accounts. Firms don’t allow employees to make unapproved or unauthorized withdrawals from the company till; unauthorized or unaccounted for PTO should be treated similarly.
Some firms specializing in HR services (e.g. Unicorn HRO and Checkpoint HR) estimate there are, on average, three untracked PTO days taken every year, by each employee. If we assume an average salary of $1,000 per week, that’s $600 you’ve lost, per employee, per year. Add in indirect costs, such as project delays or potential overtime pay for covering employees, and the impact could be substantial.
Tracking PTO effectively helps companies and managers make better scheduling decisions and reduce conflicts between project demands and time off requests. Managers need to know – in advance – who has scheduled time off so they can adapt and plan accordingly. They need a comprehensive view to compare pending time off requests against project schedules so key project milestones are achieved and customer service objectives are met. Vacation requests that exceed an employee’s available ‘bank balance’ should be made carefully, and only by managers with full knowledge of the details.
Managers also need to know about changes to existing schedules – when there is unexpected PTO or when an employee cancels a previously approved PTO day.
Unanticipated events can prevent employees from taking scheduled time off or can cause them to have to work during scheduled vacations. An effective PTO tracking system should notify HR that there is a discrepancy between scheduled PTO and the timesheet entry.
Employees need tools that allow for easy requests or reviews and visibility into their accrued PTO days. Better visibility and more accessible information benefits all parties across the company. When employees and managers know who is out and when, frustration at unreturned phone calls or unacknowledged emails can be avoided. At a minimum, employees should be able to make requests online. Ideally, employees should be able to make, and managers review and approve (or reject), PTO requests from their smart phone or tablet.
Leveraging technology is one way to accomplish the aforementioned goals. Several tools are available on the market today; however, effective PTO software should have:
- Multiple, seamlessly integrated components that provide managers with the visibility they need to make informed PTO approvals and intelligent project staffing decisions.
- Automatic and immediate notification when someone calls in sick so personnel can be shifted to cover the absent employee’s duties.
- An easy-to-use interface. A confusing, complicated and cumbersome PTO tracking tool that no one can or likes to use will defeat the purpose.
- The ability to define rules for different PTO types based on the company’s policies and support different accrual methods.
- A simple process for year-to-year balance carry forwards.
- Integration with other applications such as your HR and email system.
About the author
William Cornfield, CPA, MBA, is president and founder of WSG Systems Corp, manufacturer of Empire SUITE, the award-winning business management and automation software for professional services organizations. www.empiresuite.com.
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