How tech is changing the leave management game for HR leaders

Paid parental, medical, and caregiver leave have become table stakes for the modern and competitive employer. We see this trend in our own data, where 68% of companies offer employees paid parental leave on their first day of employment, doing away with tenure requirements. While it’s promising to see employers moving in this direction, there’s more to implementing these policies than just having them on paper. If company leave policies are going to have the desired impact, HR leaders need to clearly articulate them to employees so that they know how to access them in times of need. They also need to be able to effectively and reliably manage employee leave. However, this is much more fragmented and complicated than it should be.

For HR teams, the job of managing employee leave extends far beyond helping individual employees navigate the process. Employers have to juggle countless tasks at the organizational level: determining the best policies, ensuring equity and compliance across employee types and geographies, making sure they’re not leaving money on the table, and more. Most of this work is performed manually.

The next frontier for employers isn’t just adopting robust paid leave policies—it’s operationalizing them. That is—figuring out how to efficiently and thoughtfully execute leave, and the policies that support employees during critical life moments.

HR compliance isn’t getting any easier

Despite the fact that more than 15 million people took leave in 2022, many HR teams are still ill-equipped to tackle leave for an employee in need. The huge administrative burden can be difficult to navigate by solely relying on traditional methods, like endless phone calls, emails, and spreadsheets.

The complex, fast-moving, and continuously evolving employment laws haven’t made this any easier for HR leaders either. Though the Family and Medical Leave Act (FMLA) and Americans With Disabilities Act (ADA) have been around for nearly three decades, the Pregnant Workers Fairness Act was a major change that went into effect last year. This means that employers with at least 15 employees are now required to provide “reasonable accommodations” to a worker’s known limitations related to pregnancy, childbirth, or related medical conditions.

At the state level, thirteen states and the District of Columbia now have mandatory paid leave programs. But they’re all distinct, with different benefit periods and different qualifying events. On top of that, six states have passed regulations to allow for the creation of family insurance programs, which introduce yet another avenue employers need to navigate around state leave pay.

The shift toward distributed workforces has put even more strain on HR resources. Employers have to manage multiple employee leaves across different states, making it more difficult to navigate the myriad federal, state, and local regulations. The result is that employees might not get paid correctly, or even get the full job-protected time that they’re entitled to by law. Not only can this end up costing employers more money, but it could lead to lost pay for employees, or worse—unintentionally breaking the law.

Without robust software that can streamline compliance needs and leave programs broadly, employers will continue to find that the age-old way of handling leave management doesn’t hold up in this new, ever-changing landscape.

Giving HR leaders a better experience

The process for implementing an employee leave program requires the involvement of so many entities, from the employee and the HR manager, to the person in charge of payroll, to the state and private insurance. When these entities—not to mention, the many workflows—operate in disparate systems that don’t work together, it leads to a higher margin of error and confusion. This has more or less been the status quo, and it’s created an unnecessarily complicated and frustrating experience for HR teams and their employees.

HR teams already rely on robust software to manage other critical functions for themselves and their employees—leave management shouldn’t be any different. Employers need to place the same level of importance on comprehensive, cohesive solutions to manage payroll, compliance, and other critical functions of leave management.

Related: How small companies can afford paid parental leave

Without that, employers are unnecessarily losing time and money over employee leave, while potentially opening themselves up to legal risk. For instance, when employees don’t file for all the benefits they’re eligible for from the state or private insurance, employers that offer a fully paid policy end up paying more to keep their salary at 100%. Depending on the state, they may also be leaving benefits on the table that have been partially funded by employer-paid taxes.

Leave programs are more than just an employee benefit, and HR leaders can’t unlock all the upsides without running that program effectively. Managing employee leave is a critical HR function and teams need robust technology infrastructure to administer it in the same way they do for managing payroll or option grants. Doing so gives HR teams easy access to policies, leave plans, and correct payroll calculations, which reduces administrative burdens and minimizes common errors that happen with manual processing. It also benefits leave-takers, making it easier for them to understand what they’re eligible for, preview their pay, and track paperwork and deadlines. Having a clear and fair process for leave requests ensures that every employee gets a consistent, predictable experience, increasing satisfaction, and ultimately, contributing to better retention rates.

Employee leave shouldn’t be compromised because employers are forced to work within vastly complicated systems. Fortunately, that’s starting to change. Employers are increasingly recognizing that they need to adopt policies that support employees through life’s most challenging and vulnerable moments. More than ever, having the right solutions in place is critical to ensure that HR teams are equipped to successfully navigate the leave management process accurately and cost-effectively.

Mahima Chawla is the CEO & co-founder of Cocoon, a leave management platform that streamlines taking and managing employee leave.