Employee Vacation Management

You want to support employees by providing the opportunity for work/life harmony, but you also have customers to service and a business to run. Sometimes it is difficult to juggle multiple vacation requests around popular vacation times, especially during the summer months and other holiday times throughout the year. Below we have provided a few tips, suggestions, and best practices for employee vacation management to help you strike the right balance based on your organization’s typical activity model.

“Peak and Valley” Employers – A Peak and Valley employer is one in which there are historically predictable increases and decreases in activity level throughout the year. Extreme examples include tax preparation firms, landscaping companies and the like. However, most organizations have at least some degree of historical peaks and valleys throughout the year and may benefit from the following vacation management concepts. Strategies for managing vacation requests for Peak and Valley Employers include:

• Black-Out Dates – They’re not just for airline reward miles. Some employers list blackout dates in their Employee Handbook’s Vacation Policy to make it clear that there are certain dates for which employees may not request vacation. Employees generally prefer to know ahead of time about black-out dates, rather than request vacation and receive a denial. Therefore, Peak and Valley Employers may wish to consider being up-front about black-out dates and listing them in the written Vacation Policy.
• Forced Use During Slow Months – Peak and Valley Employers may wish to enact a policy requiring employees to use all or a specific amount of vacation during the slow months. For example, if your workflow significantly decreases in the first quarter of the year, you may consider stating in your vacation policy that employees are required to use at least half of their annual vacation allotment during this time period.
• Incentives for Use During Slow Months – If you prefer incentives rather than prohibitions, consider incentivizing employees to use their vacation during slower months. For example, you may allow employees to use four vacation days and get one free for vacations during pre-determined slower periods.

“Steady Workflow” Employers – A Steady Workflow employer is one in which the annual workflow is fairly consistent throughout the year. Some examples include certain manufacturing or telecom employers. Steady Workflow Employers typically struggle when multiple employees request vacation time over the same dates, which are generally popular American vacation periods (summer, Thanksgiving week, Christmas week, etc.). Below are a few vacation strategies to manage conflicts when the organization’s workflow cannot support multiple employees on vacation concurrently:

• Decisions Based on Seniority – Some organizations allow employees with more seniority to elect their vacation days earlier or have precedence when it comes to vacation requests.
• Decisions Based on “First-Come, First-Served” – Some organizations opt to approve vacations strictly based on when the request was submitted.
• Shared Online Vacation Calendar – This method is simply a way of implementing the “first-come, first-served” system, but places more responsibility on the employee. The organization may opt to post a vacation calendar (by department or functional area) on its Intranet and list how many employees the department may have out on vacation for any one day. Then, each employee may fill in their vacation requests on the calendar, knowing that if the maximum number of employees have already requested the desired dates, the employee must select different dates.

“Seasonal Shutdown” Employers – A Seasonal Shutdown Employer has certain periods during the year in which all or a portion of operations close. Generally the best strategy for these employers is to force the use of vacation during these periods. Employers are permitted to designate vacation time based on the needs of the organization. Employers that close for certain weeks during the year often use this method of vacation management. For example, if the organization closes for the week between Christmas Day and New Year’s Day, the company may require all employees to save five days of vacation time to use during this period.

Whatever decisions your organization makes in this regard, we recommend that the senior management team clearly communicates the company’s policy and the reasoning behind it to employees so they may plan their vacations accordingly. Clear communication and consistent application of the vacation policy are crucial to avoid potential morale problems or exposure to discrimination claims based on the administration of the organization’s vacation policy.

To learn how GTM’s payroll management system helps all types of employers save time by tracking and monitoring employee sick and vacation days, contact us at (518) 373-4111.