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Why accurate leave management is so important

Taking a relaxed approach to leave management can put your business at risk of making costly errors.

When it comes to managing and recording employee leave, it might be easy to take the “she’ll be right” approach. But there are some really good reasons why you should diligently manage, track, and pay leave.

Proper leave management means your business can operate more effectively, you meet your employees’ need for time-off, and you satisfy your legal obligations.

Managing employee leave might seem like quite a basic task for many businesses – especially smaller ones with only a few employees – and it can be tempting to take a relaxed approach.

But unless you diligently track, manage, and pay leave for every single employee, your company could be at serious risk of making costly errors. There are plenty of high-profile cases of large Australian employers not staying on top of leave entitlements and payments, highlighting just how expensive mistakes can be. And that’s not to mention the effect poor leave management can have on your operational efficiency.

So let’s look at the prime reasons why you should accurately manage employee leave.

  • Meet your legal obligations – under the Fair Work Act 2009, all Australian employers must keep accurate records of the daily hours every employee works and their pay for those hours, as well as the leave accrued, entitled leave, and leave taken. Failure to do so can mean being fined by the Fair Work Ombudsman and/or having to pay backdated leave.

  • Better leave and holiday planning – managing absences in advance means you won’t be regularly caught short without suitable cover or overload your existing team, so the business can continue to meet its obligations and deadlines smoothly.

  • Reduced costs – paid time-off and accrued leave can have a significant impact on your bottom line and contractors or temps can be expensive. Good leave management systems also make handling leave easier and more accurate, so you can spend that time on more important tasks.

  • Increased employee confidence – team members who know they’re getting their proper leave entitlements have more confidence and trust in the business, which boosts engagement and motivation.

  • Reduced absenteeism – taking leave improves people’s work-life balance and promotes good physical and mental health, which helps lower stress, improves focus, and reduces unscheduled days off.

If you don’t have the tools to accurately track leave, especially sick leave, you may not know how many days a year your employees are taking and how much that is affecting your business.

Proper leave management systems can give you a much better understanding of leave patterns across the business, and if there are issues, you have the chance to work on solutions with your employees.

Modern leave management systems allow employees to see their leave balances and request leave electronically. This provides transparency and the automation also reduces admin for the business.

If you would like to know more about the benefits of a leave management system, come and talk to us.

Graham Burfield
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