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How tightly do you manage your employees’ vacation days? I’ve seen companies succeed maintaining a disciplined reporting of vacation day use. I have also seen environments where there is a painstaking, micromanagement approach. Which one should you employ to maximize productivity in your organization? The cost of one employee taking one extra day here or there that doesn’t get counted against his or her allocated paid time off may not seem like much, but when calculated at a more macro-level, such a situation can add up to a significant impact to your bottom line. Here are three reasons why you should track and record employee time off.
- It’s the conservative approach, which means you conserve money. Ensuring that your employees only take the amount of vacation days they are supposed to take is simply good business. Very large companies may be able to weather the storm if a small percentage of employees take advantage of the system; but if you are a medium- or small-sized business, the accumulated cost of vacation days that go unreported can mean the difference between hitting critical earnings targets and missing deadlines and targets.
- Discipline in vacation reporting commands discipline in other areas. If you establish tight control over vacation day management and this approach is accepted as a company standard, you can implement similarly tight policies in other employee administrative areas such as dress code, client service behavior, and travel & expense management. Strong vacation policies can beget a culture of accountability that can deliver benefits elsewhere.
- Honesty and transparency that goes both ways resonates with employees. Employees who know that management is serious about honesty will respond in kind. A manager who does not encourage proper vacation reporting and “look the other way” when an employee takes a day off and doesn’t count it risks losing credibility and a weakening position of authority. Strong control over vacation days sends the right message that no one is above policy and everyone needs to play by the rules.
If you observe that pockets of your organization do not have tight controls in place over vacation days, take the time to implement the change required to bring about stronger controls. Managing all areas of the business, use of vacation time included, will drive long-term overarching business benefits.