Managing time off at your small business

Managing time off is often the first challenge you face when you start putting together HR processes for your small business, and it’s a critical step towards success!

Ensuring everyone gets the time off they’re entitled to is crucial if you want to keep your team engaged, retain top talent and ensure steady growth.

At Charlie, we’re a team of around 50 now. Back when it was just a handful of us, time off wasn’t really something on my mind as a CEO, but it soon became one of my day-to-day tasks.

As soon as we started growing and hiring, I faced a few challenges:

I didn’t have enough time to handle time off properly, and it always ended up on the back burner, leaving people chasing for answers regarding leave requests or allowances.
I wasn’t sure we were 100% compliant. And I kept thinking I needed to check my calculations were correct when it came to calculating pro rata holiday and allowances, but couldn’t find the headspace.
I was already juggling countless administrative and business tasks, making it difficult to cram one more.
I wasn’t confident our annual leave policy was the best to attract and retain the right people.

As a small business owner yourself, or someone taking care of HR when it’s not your main role, you might be experiencing similar setbacks. That’s why I thought it might be helpful to share our experience of building an effective time off management process for our small business, without any prior experience or specialist knowledge – read on to find out more.

1. The many challenges of managing time off at a small business

Small businesses often face way more challenges than larger corporations when it comes to managing time off, mainly because of a lack of resources.

Whether it’s having too many people away at once, no one to cover for someone on holiday, not enough notice for leave requests, or too much leave to carry over onto the next year, poor time off management can cause a strain on your team members and your business – ultimately, it’s your responsibility to prevent these problems from happening over and over again.

But that’s easier said than done. At Charlie, we started by identifying the problems getting in the way of effective time off management:

We didn’t have the right HR policies in place, leaving a lot of room for interpretation and confusion.
We didn’t have clear time off allowances, meaning it was difficult to understand how much time off was acceptable to take within a year.
We still did a lot of manual adjustment and used spreadsheets – despite having our own HR software to record time off, we still calculated pro rata holidays and kept track of carry over on spreadsheets, and that needed to change.

It was, frankly, very scrappy – it worked fine for a little while, as it was just a few of us in the office, but it became a bigger problem as soon as we started growing.

I don’t think this is uncommon. I’ve heard similar stories from other small businesses — it works in the beginning, but it doesn’t look professional, and can quickly turn chaotic, especially when you have no visibility over what’s happening to your team.

“Before Charlie, it was something people had to think about and taking holidays almost became another job on the to-do list. It’s now so seamless we don’t even have to think about it.”

Sophie Hanman, Customer Happiness Manager @ London Nootropics - see how Sophie and her team turned their time off management around with Charlie

2. Refining our time off policies as we grew

Our time off policies weren’t great. We iterated and tried so many approaches before getting to where we are today! Let’s rewind a little bit.

Scrapping our unlimited holiday policy

As a young CEO, I thought it was a good idea to allow your team to have as much time off as possible. In truth, it really sounded ideal – who wouldn’t want unlimited holidays? But the tough reality is this:

High performers still performed high, but neglected their time off as they didn’t have a clear allowance and no one to remind them to take it.
It opened the door to unfairness when people in the team didn’t take the same amount of time off, often resulting in big discrepancies.
Not having a limit caused anxiety over what was okay and what was too much.

We wrote about this experience in our unlimited holiday policy blog if you’d like to find out more – but all this to say that we ended up scrapping the policy altogether and instead settled on 25 days of holiday per year on top of bank holidays.

We also gave our team members the 24th and 31st of December off when they don’t fall on a weekend. It was a difficult decision, but was better for us in the long run.

Dealing with sick leave and other types of leave

What you don’t realise at first, when running a small business, is that you’ll encounter the same problems as bigger companies, but not as often and at a much smaller scale – which doesn’t mean they’re easier to deal with.

Having less team members doesn’t mean their life will come to a standstill outside of work; they’ll still get ill, have children, want to take extended time off, etc.

To make sure we covered all aspects of absences, we created different types of leave, trying to cover a large range of circumstances for our team:

Sick leave – we allow team members to take 20 days at full pay on a rolling basis, and they’re entitled to more after that, just not at 100% pay.
Personal days – our equivalent of what people call duvet days. We give 4 days per year.
Sabbatical – we offer 1 month paid at 50% for people who have been with us for 3,5 years
Carer’s leave – we give 5 paid days to people who have to take care of a dependent.
Jury service – we pay our team members in full if they are ever called for jury duty.
Compassionate leave – we want our team members to take paid time off when they’ve lost a loved one.
Parental leave – we offer 10 weeks fully paid and 10 weeks at 50% for new parents.
Pregnancy loss and parental bereavement – our team members are entitled to two weeks fully paid.

That may sound like a lot of policies to build, but it’s important to cover all situations – you never know what might happen, and it’s better to be prepared to support your team members and have clear procedures in place rather than to panic when something happens.

If you’re concerned about how much time off your team is taking and its impact on productivity, it’s a good idea to keep track of all their leave. The easiest way to do this is by automating the process.

At Charlie, we add all of our leave types using our CharlieHR software. From there, it’s up to team members to book their own time off directly through the platform, based on their allowances. We get notified by email, and can follow through with no effort.

Our reports allow us to download clear summaries of the types and amounts of time off taken over specific periods. It’s a great way to stay on top of everything and make adjustments to our HR policies as needed.

Remote working and 9-day fortnight

Another way to help your team make the most of their time is by giving them the option to work remotely. We put together a hybrid working policy that lets our team organise their days however suits them — with no set hours — and gives them the freedom to work from anywhere in the UK, or even nomad work for up to 90 days a year.

We’ve found this works really well alongside our 9-day fortnight policy, giving everyone more flexibility. Plus, it helps cut down on absences throughout the year.

3. Making our HR software the best option for small businesses

Once we had solid HR policies, we realised our software needed to help us put them into action – and we thought it’d probably be helpful for all of our customers as well.

Initially, we built our HR software to allow team members to self-serve and send their own time off requests, whilst flagging overlapping time off for their managers — and that was about it.

Over the years, we refined our product based on all the feedback we gathered from more than 13,000 small businesses we have in our customer base. Here’s an overview of how time off management feature, in particular, is the best for small businesses.

Take annual leave off your to-do list

“In all honesty, we don’t even have to think about it. It’s doing its thing in the background and it’s great.” Rachel Carrell CEO & Founder @ Koru Kids

Our platform has been built to be super easy to use, which means there’s also no time wasted in getting your process up and running.

Once you're up and running (which can be done all by yourself!), you can invite your team to use the system and book their time off themselves.

No need to get out of deep focus mode to review leave requests – just check your emails, click the link, and approve or deny the request. You can even automate approvals for certain leave types if you prefer. See how much time you’ve already saved?

Feel like a proper business

“We finally feel like a proper company with Charlie by our side.” James Chessum, Founder @ Red5 people

Looking professional and getting rid of scrappy processes is something we really cared about at Charlie, and an aspect of our software our customers really value too.

With Charlie, you’re no longer the bottleneck for team queries. With self-serve software, new hires can easily get the answers they need, giving you more time to properly onboard them (which, by the way, Charlie helps with too!).

As Red5 People puts it, Charlie helps small businesses achieve a professional look without all the unnecessary extras bigger HR software tools can have – all at an affordable price.

Comply with employment law and HR policies

““Time off seems like such a simple process, but it can actually make the admin pile up without a proper tool.” Jonathan North – Head of Ops @ Fix Radio

Compliance can be a tricky topic for small businesses – and that’s why we’ve made our software Cyber Essentials and ISO 27001 certified.

By getting these certifications, we ensure our software is super secure and safe to use, and meets GDPR requirements.

And when it comes to time off, we’ve built all of our calculations to ensure your time off process remains 100% free of human error.

The system automatically takes care of pro rata holidays, part time workers, hourly workers and carry over, so there’s no payroll mistake.

4. How an efficient time off management process helped us grow

As the business grew, I became less involved in day-to-day HR tasks and I could spend my time focusing on more impactful work.

Don’t get me wrong, HR is super important, but at the end of the day, it’s not what I should be spending all my time on as the CEO of a small company.

And that’s where HR software was a complete game changer to our growth, as it freed me from the admin – including but not limited to time off.

With Charlie’s help, I was able to:

Let someone else be in charge of time off management with confidence.
Ensure the company stays compliant via a secure platform and integrated time off policies with set allowances for each team member.
Focus on other aspects of the business and concentrate my effort towards growth.
Keep an eye on time off reports to understand trends and make sure our policies were adjusted accordingly.

Nowadays, time off is the furthest thing from my mind and for good reasons: we’ve built strong HR policies, have allowed our team members to work remotely for more flexibility, and we’ve got a strong software to support us through it all.

Maybe you’re also a small business owner, an ops manager or someone working at a small business who is in charge of HR, but HR is not your main role. And maybe the lack of time and need for an easy set up are important for you.

Hopefully this was a helpful introduction to managing time off at your small business, and if you’re looking for an all-in-one solution, maybe it’s time to start a free trial with us.