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In an ideal world, businesses pay employees every hour or day they work, not when they’re lounging on a faraway secluded beach. However, a good employer knows that each hardworking employee deserves a break from the daily hustle and stress of work. Thus, most businesses offer paid time off (PTO) leaves as a standard benefit. 

Whether it’s an extended family vacation in another state or country or just a short weekend rest to recuperate and recharge your mental health, a time off can do wonders for your employee’s well-being and productivity. 

However, anyone who’s ever tried to request time off knows that it’s not always as simple as it sounds. Your human resources (HR) manager doesn’t just need to approve leave; they need to find substitute employees, calculate payments, and keep track of employees’ time offs.

If you’re wondering how to handle your employees’ time off and leaves, this article takes a closer look into PTO policies, why you should track time-offs, and common tracking methods. You’ll also learn more about PTO tracking software, its benefits to your business, and choosing the right one for your needs. 

PTO: What Is It?

Before anything else, you first need to know what PTO is. Paid time off (PTO) is an employee leave policy and one of the primary benefits offered by a company. 

It provides employees with a number of leaves that can be used for any purpose, including marriage, sickness, vacation, bereavement, or personal time. The best thing about this type of leave policy is that employees are paid when they take leave from work. 

Types Of PTO

In general, businesses provide many types of PTO to their employees. Choosing the correct type of PTO policy can enable companies to attract great talent. That said, here are the common types of PTO offered today:

  1. Traditional PTO Policies

The traditional PTO policy gives employees an allotted set of paid time leaves for specific categories, including sick, vacation, and personal days. 

The allotments can be offered as hours or days off under each category and can only be replenished every calendar year or the employee’s work anniversary. Furthermore, most employers increase the allotment for employees who stay for years, thus encouraging loyalty. 

  1. PTO Banks

A PTO bank combines most, if not all, types of leave categories instead of having an allotted set of PTOs for specific classifications.

PTO banks allow employees to use their time off for any purpose, regardless of whether they are sick days, personal days, or vacation days. It also offers more privacy to employees since they don’t have to reveal the type of leave they’re requesting. In addition, a PTO bank is preferable for businesses that wants to cut back on PTO tracking while still providing employees with a set number of days off. 

Please take note that PTO banks function like regular savings bank accounts; the more you invest in them, the more you earn in interest. It allows an employee to accumulate leaves over a specific period. When employees work for a month, PTO leave credits to get accrued to their leave balance. 

For instance, if an employee gets 2 PTO every month they work, the accrued PTO will be 24 days, collected over the 12 months. Depending on the company’s policy, an employee would accrue PTO hours every pay period or receive it in a lump sum at a specific time throughout the year.

  1. Unlimited PTO

A growing trend in the company leave benefits is unlimited PTO. This type of PTO allows employees to take time as they need without a set number of allotted days. Therefore, unlimited PTO gives employees the flexibility to take time off from work with no administrative burden, whether they need a day off for a family event at their child’s school or are going on an overseas trip. 

In general, businesses that use this policy don’t require employees to report or track their days off to HR managers. Instead, time off approval is at the discretion of their manager. Unlimited PTO is particularly popular in startup and tech companies with no HR infrastructure to manage and track accrued time off policies. 

The Importance of PTO Tracking

Managing your employees’ time off is critical for the HR department. Whether you’re a small business or an established corporation, PTO tracking should be handled very carefully. Here are some reasons why you should take PTO tracking more seriously. 

  1. Proper Resource Allocation And Planning

PTO tracking allows you to plan employees’ time-offs and ensure that you have enough coverage to prevent staff shortage issues. Although there’s little you can do if the number of employees fall sick or have emergencies simultaneously. PTO tracking and planning can help reduce work disruptions and ensure that there’s no drop in productivity to continuously meet its deadlines and obligations. 

  1. Reduce Employee Burnout

Proper resource allocation also minimizes the risk of employee burnout. Remember that no one wants to always take on extra work because the HR manager didn’t carefully plan leave covers. In addition, employees who haven’t taken time-offs may showcase poor engagement and lower commitment to their work, which can increase employee turnover. 

Consequently, an employee taking more than their assigned leave and another employee always having to cover for absent co-workers can develop inter-team conflicts. Thus, HR managers must have proper PTO tracking practices and ensure appropriate leave utilization. 

  1. Avoid Legal Problems

Keeping track of paid time-offs and leaves and correctly paying your employees can keep you on the right side of the law. While each state and country have different labor laws, in general, employers need to keep accurate records of the daily hours that their employees work and pay for those hours, including accrued PTO, entitled leaves, and taken time-offs.

Keeping accurate track of PTOs can minimize or eliminate errors in leave entitlement and payment calculations. This way, you can ensure that your employees get the right amount of leave and pay. In doing so, your business can avoid paying backdated PTOs or getting fined by the relevant government body for unfair employment and labor practices. 

How To Track PTO?

Over the years, employers and HR managers have devised numerous creative ways to track PTO. That said, the most common methods to track PTO include:

  1. Paper

Most employers and HR managers still rely on paper trails when tracking employee PTOs and work hours. They may track PTOs with the use of post-it notes on a wall calendar or desk, a spiral notebook, or a dry-erase whiteboard. 

Although there’s nothing wrong with these methods, manual tracking of PTOs can be time-consuming and prone to inconsistencies and mistakes. Hard copies are also vulnerable to becoming lost or damaged. 

That said, paper tracking is suited for smaller businesses with less than 20 employees. 

  1. Spreadsheets

Google Sheets or Excel can represent a better solution for small to medium-sized companies. Since most office workers are adept at spreadsheets, you can make a PTO calendar that stores data on multiple employees. It also provides a more cohesive vision of employee PTOs dates. 

However, spreadsheets can be quite a headache, especially if your business allows for non-traditional arrangements such as having a mix of remote workers, full-timers, and part-timers or having different office hours, including dayshift and night-shift workers. 

  1. PTO Tracking Software

Thanks to the advancement of technology, there’s a solution or tool for any business process, including PTO tracking and management. PTO tracking solutions are automated leave management systems for approving and scheduling employees’ paid leave requests. It’s an essential part of the employee attendance management process. 

A PTO tracking tool is a modern solution for tracking employee paid leaves, providing numerous benefits to employers, HR managers, and employees. 

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Why Invest In A PTO Tracking Software?

In this section, you’ll learn some of the critical advantages of investing in PTO tracking software for your business. 

  1. It Offers A Centralized Data 

Unlike manual methods, a PTO tracking solution features a centralized database. This means that all PTO requests are stored in a single platform, unifying the employee database and allowing admins to easily and quickly access details of an employee. 

A centralized database ensures a smooth process and prevents confusion and misinformation across the company. Key members, including HR staff and team managers, know when a team member is on leave, making it easier to manage the allotted work. 

  1. It Saves Times And Costs

Businesses are always on the lookout for opportunities to reduce costs. And a PTO tracker can help significantly reduce the costs of processing PTOs. It helps reduce errors and confusion, which can be expensive and reduce employee productivity.

Manual processing of PTOs can also be time-consuming, especially if you have a more prominent company with hundreds of employees. Instead of relying on manual tracking methods like paper or spreadsheets, an automated solution can eliminate the repetitive admin tasks and streamline the process. This helps HR managers save time for more important tasks that can improve the company’s bottom line. 

  1. It Ensures Transparency

The best PTO tracking software features a self-service dashboard for employees. This adds transparency, allowing employees to check for approval on PTO requests and view how much leave they have left so they can plan accordingly. 

In addition, with a PTO tracking system in place, employees don’t have to worry too much about PTO requests and focus on their work. Some software may notify employees when HR staff approves or deny their PTO request, so they’ll know what to do next. This frees up time going back and forth to ask the HR department, as well as reducing mental clutter and improving productivity.

  1. It Brings Flexibility

PTO tracking software offers HR managers and employees the flexibility to easily access work records and manage PTO requests. 

Most cloud-based software allows employees to request and update their PTOs from anywhere. At the same time, admins and HR managers can easily view these requests and approve or deny them on time. This eliminates a lot of stress on both sides, making PTO requests easier to track and manage.

How To Choose The Best PTO Tracking Software For Your Business

Now that you know why you should invest in PTO tracking software, here are tips to consider when choosing the right one for your company. 

  1. Consider Your PTO Policies

Before searching the internet, it’s helpful to review your current PTO policies to ensure you find the right software that fits your current processes. Start by reading your PTO policy documentation and learn about the current carryover rules, how PTO is earned, and more. 

  1. Enumerate Your Requirements

From your PTO policy review, you can start making a list of core features you need in a PTO tracking tool. You can also add more functions that can potentially improve and streamline your current tracking processes. 

  1. Research

Once you’ve established what you need, it’s time to do your research online. A simple Google search will provide you with a list of reputable PTO tracking software vendors. You can also check out software review sites like Capterra for top-rated options. Then, make a short list of vendors offering PTO trackers that meet your needs. 

  1. Do Trials And Demos

Most vendors will offer demos or free trials. A demo can help you quickly determine if the software meets your needs. After a vendor’s demo, ask if they offer a free trial. This allows you to get hands-on experience with the system and determine if it is the right solution for your business process. 

Takeaway

There’s nothing quite like the feeling of getting a well-deserved break. And PTOs can help employees relax and take a break from the daily stress of work, boosting their satisfaction and productivity in the long run. 

That said, whether you’re running a startup with a team of 10 people or a large corporation with hundreds of workers, good PTO tracking practices with the use of the right PTO software ensure that you can effectively manage employees’ time off and facilitate a streamlined and hassle-free process.