The Importance Of Leave Metrics
Is your leave policy driven by customers, culture or staff? The importance of leave metrics is using a strategic approach that combines all three is not hard. Understanding customer demand is based on customers per day, per hour, per week? Is it particular times of the year based on certain deadlines if you’re a service entity? For example, most accountants pretty much don’t allow staff to take leave during various times depending on their client base and workload.
What is it that drives this metric? Understand it. Plan it out for 12 to 18 months. Have a calendar, make sure it is visible, have policies, and work with your team. The other aspect too from an employer and the more economic component is what happens with leave when it starts to build up and people have not taken leave, it creates a liability for you on your balance sheet. That means at some point you will need to pay for that labour. Imagine you had a brand-new team; you work for a whole year and you all work 12 months. Then in the 13th month, everybody takes holidays and the business shuts down. It doesn’t work, but you see my point there, what builds up is a leave liability. If you had a process where after six months people were taking chunks of that leave so that you are never carrying more than six months’ worth of leave on the balance sheet, then your businesses is in a sound position. Not only that the issue to do with “leave creep” in pay terms is something to consider, when staff have an accrued leave balance and then they have a 5% pay rise or a 2% pay rise in the current environments. That leave instantly goes up. If you don’t have a policy to manage your staff leave, you could cost the company more money in the future. Now granted, I know some staff like to bank their leave at a period of time and use that as a safety net. Once again, back to the leave policy and the importance of leave metrics. Set your expectations early. If you have a shut down during Christmas or you’re the kind of business that has a certain period where it is dead quiet, make that clear. Now under the various legislative instruments of fair work and so forth, there are criteria around leave. But once again, meeting those requirements, having the conversation early, sets the expectations. The other thing too is just from the admin perspective, have a leave calendar that is visual so that the team members know who is going on leave and when. This is another important aspect of managing your leave policy.
If you look at managing staff leave from a more strategic HR perspective, make the rules clear, have a good and effective policy, and review it every 6 to 12 months. Also make sure everybody is aware of it. Even if you are coming up to a leave period, pre-emptively recirculate it as an email or point to an intranet site internally. Don’t make assumptions that people will remember. Many staff are caught up in doing what they need to do for you to make your business profitable. Set the ground rules and have a constant conversation and a review process in your policy. You need to give some flexibility especially if you are going to hold yourself out as a work-life balance organization, you need to walk the talk. Not to say, “Hey, that is a motto we have on our website”, but we don’t actually practice it. Finally, rethink through what is your demand periods. Get that down, publish that calendar, make things work. If you want help with doing this well, Eagle Shared Service, we have massive amounts of experience or ultimately, we have tools on the website and free resources you can download. Once again, this is for more training nature as opposed to a solution. Do not try and plug a square peg into a round hole. Be bold, take the time to think through the process of managing staff leave. I have also got some conversation starters to use at a team meeting. If you are not sure, why not leverage the power of your team. Have a meeting and say, “Hey guys, I want to set up a leave policy, what are your ideas?” Then they too can take ownership of that and remember the importance of leave metrics and getting the values of your business and the people who work for you aligned.