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Top 4 Benefits of Absence Management Automation in 2024

Top 4 Benefits of Absence Management Automation in 2024Top 4 Benefits of Absence Management Automation in 2024

Following the COVID-induced shutdowns, businesses had difficulty managing employees’ absence from the physical workplace. This is perhaps evidenced by the increased interest in “absence management”

A disorganized absence management strategy can result in business continuity disruption, overdue or inaccurate compensation, and overall lowered productivity because of the staff not doing their jobs.

Automating your absence management strategy can alleviate these challenges and help HR and management staff focus on more strategic goals, such as training employees, conducting counseling workshops, and more.

This article expands more on the top 4 benefits of automating a business’ absence management.

What is absence management?

Gartner defines absence management as a strategic approach to reducing the effects of an employee’s absence from the workplace. These negative effects include, but are not limited to:

  • Disruption of operational continuity,
  • Inaccurate compensation due to lack of communication between the employee and the employer during the former’s time-off,
  • Administrative cost of getting employees up to speed after being back in the office,
  • Per-employee wage and output disparity,
  • Not knowing which worker is working and which is not, especially during turbulent times with a large number of absentees.

Why is absence management important today?

Following the pandemic, many, if not all, businesses were in limbo as to how they should continue operating. The challenges included, but were not limited to:

  • Should halting operations count as paid time off (PTO)?
  • How to keep operational continuity in the face of workers’ absence from the workplace?
  • How to properly calculate monthly compensation packages?
  • How to compensate workers who are picking up their absent colleagues’ workloads?

And even following the pandemic and during the normalization phase, employees are still being stricken with COVID, other illnesses, and personal circumstances which might hinder their presence in the workplace. According to Investopedia, unscheduled absenteeism costs companies $3,600/annum for each hourly worker and $2,600/annum for each salaried employee.

What is absence management software?

Absence management software is a tracking system that holds all employees’:

  • Name
  • Position
  • Immediate supervisor
  • Wage
  • Number of paid vacation days

The employee can log into the system ahead of time and select the days they will not be working from the calendar, with an explanation. The HR team or their immediate supervisor will then be automatically notified by the software.

If the reason for the employee’s absence is accepted, the software will inform the employee as such. Moreover, because all previous PTOs are recorded in the database, the solution can also show the number of remaining PTOs, or lack thereof.

In contrast, if the justification for the absence is rejected, the employee may be informed that:

  • They should schedule a meeting with their supervisor to discuss it further,
  • A non-reversible decision has been taken, and the day-off has been disapproved, along with the employee’s reasoning.

What are the benefits of absence management software?

1. It’s integrable

Absence management software can be linked to the company’s payroll solution via API and orchestration to exchange information. For instance, if an employee’s reason for absence is deemed “acceptable,” the employer can mark it as such.

At the end of the month, then, the employee’s wage will automatically not be deducted and their days off will be counted as PTO.

Or on the other hand, if the employee had exceeded their PTO amount, and their last vacation day had been marked as “unjustifiable,” the payroll system will automatically deduct from their wage.

The benefit of leveraging an absence management software is that it frees the employer’s time from manually cross-checking each employee’s vacation days, their justifiability, and the overall effect on wages. Rather, and thanks to EDI, the applications will interlink and do the cross-checking on their own.

2. It gives employers time to adjust

The software can be programmed to only accept requests for vacation leaves if they are made more than one week ahead of day zero. (Of course, for family or medical emergencies, direct meetings between the employee and the employer can be scheduled)

This feature eliminates surprises and allows employers to adjust their calendars to prepare themselves for the employee’s absence ahead of time. For instance, if the warehouse’s foreman is taking a time off in 10 days’ time, they have ample time to source a substitute to cover for him/her.  

On the other hand, if calendar adjustments are made on short notice, especially in positions where the employee taking the absence is integral to safety, productivity, and continuity of the operation, then the company will face monetary consequences.

3. It provides data-driven insights

The benefit of absence management software is that it logs all data into its database and leaves a digital footprint. The management team can then, at year’s end, go over each employee’s PTOs to try and detect patterns.

For instance, if the data shows that most absences are made during summer when employees take time off to be with their family or travel, the company can plan to source outside substitutes if applicable.

Or if the data shows that the company’s cafeteria chef takes most of his/her time off during the same times each year, the company could contact a temporary employment agency and request that they have a chef available in the month of August in case of his/her absence.

Or let’s say the company finds out that most of its staff is taking time off because of “mental and physical burnout.” They then can find solutions to address the issue, such as automating their manual and time-consuming tasks to free up their workloads.

4. It provides transparency

The solution can be programmed to inform the employee of the number of PTO they have left or whether or not they have exceeded their quota. In the case of the latter, the software can also instantly calculate the exact amount by which their upcoming payroll will be deducted. 

This feature increases transparency and can give the employees the opportunity to whether or not go through with their desire to take time off. 

For more on HR automation

To learn more about automation use cases in HR, read:

And if you believe your business would benefit from adopting an automation solution in the HR department, head over to our HR hub, where you’ll find data-driven lists of products for various use cases.

We will help you choose the correct tool for your business:

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Access Cem's 2 decades of B2B tech experience as a tech consultant, enterprise leader, startup entrepreneur & industry analyst. Leverage insights informing top Fortune 500 every month.
Cem Dilmegani
Principal Analyst
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Cem Dilmegani
Principal Analyst

Cem has been the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per similarWeb) including 60% of Fortune 500 every month.

Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE, NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and media that referenced AIMultiple.

Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised businesses on their enterprise software, automation, cloud, AI / ML and other technology related decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.

He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.

Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.

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