MBA1359 How To Form A Leave Policy That Works For Your Business

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They're observing public holidays in their country. They might fall ill. You need to make sure it's clear how your company handles this. Some companies have a totally open ended leave policy with unlimited days off. Recently evidence has been shown that that actually doesn't work in favor of the employ. We'll talk a little bit more about that as well as some of the things to consider when you're forming your leave policy for your team. So let's get into it. Let's get down to business. When you start growing your team, you're creating contracts, you're creating terms. And one of the things you need to consider is leave. How much time can your team members have off now? Leave is usually broken into four categories one is holiday time, just vacation, R&R. Two is sick leave. Three is public holidays, and four, maternity slash paternity. Now there are other types of leave, leaves of absence and all that kind of stuff. But let's just talk about the four major ones for now. Now there are companies, successful, well known companies that had a policy where it just said, hey, you could take as much leave as you want, you can take as many days as you want open ended. And that actually didn't work for them because many of the employees didn't know what they were entitled to or what was a good amount of days to take off. They felt guilty, so they didn't take time off. One of those companies is Basecamp actually, and they mentioned this in one of their books. It doesn't have to be crazy at work. But it's interesting. When you don't have any kind of policy, it actually doesn't help your employees. It hurts them. And they tend to work longer and take few days to recharge every year. So let's start with the easy one, which is public holidays. Now if you employ people from different parts of the world, then you need to familiarize yourself with the major public holidays in that country. In the US you can look this up in a Google search and they're days like 4th of July, Christmas Day, New Year's Day, Thanksgiving. These are days in the calendar that are national public holidays. And that's kind of easy because you can write that out in the contract. The next is sick leave. You should have a number of days allocated to sick leave. If people are not feeling well enough to go to work, they shouldn't go to work, they shouldn't be working, they're not going to be performing at their best. So, so you gotta give them some leeway, some allowance to sick days. And what many companies do is that sick days are not paid out if they don't use them, they can't roll them over into vacation days. They're there if they need them and if they don't use them, they just kind of go away. So it encourages people to say, hey, if I'm sick, I shouldn't work, I'm not at my best and I should ask for sick leave. Some companies ask for a doctor's note if they're taking more than two consecutive days. But that's up to you. In our team, we run on the trust system. We believe that people are not lying to us when they say they're s. If we trust them with our business, I think I can Trust them with them saying when they're sick and when they're not. So having a prescribed number of days for sick leave is very helpful for your staff. Third, holiday. Every company can choose how much holiday they want to give their staff. Now, depending on the country you live in, this might be required a minimum amount of days. Some countries no. Now, when it comes to holiday, some companies use a cumulative leave system, which means they actually earn the days as they work. Say for example, you're giving 12 days holiday every year. This is just for the sake of argument. They don't get these 12 days from day one when they start working. They actually earn it with every day and every month that they work at the company. So after one month they would have accumulated one day of leave. By the end of 12 months, you get it, 12 days. This is just an example and it's just to show you how a human lived leave system works. This prevents people that just got hired taking off for two weeks. And it may be something you want to stipulate in some positions that are high risk or you need some time to replace them. Some sort of warning. Regardless of if you use cumulative leave or not, you should encourage your team members to give you as much ample warning as possible by filling out even just a Google form. That's what we do. We have a Google form where people fill out when they know they're going to take some leave, the earlier the better. So we are in the know when somebody applies for leave. So that way if they have something on their plate that we know is important, we need to make sure somebody else takes care of it while they're gone. Maternity paternity. This is giving leave for when people fall pregnant. Right? When somebody in your company has a baby or is going to have a baby again, each company will decide how long this is. Some companies it's a week, some of them is a month, some of it is a few months. Some companies choose to pay them salary for the full time and some people will pay full salary for a certain point and then after that it's 50% and after that it's sort of like a leave of absence. So just to give you an example, it might be your first two weeks of maternity leave is fully paid, the next two is half pay and anything after that is a leave of absence. Where means we'll hold a job for you, you can jump right back in, but it's unpaid leave. This is just an example. You could do what you want. It's your company again. Check with the laws of your country. Some countries have laws with this, so make sure you're not breaching those laws. But if you have the liberty to choose, then choose what you think is best. My personal advice is to have a maternity policy, some sort of policy to accommodate this. Why? Because hiring somebody new is going to cost you more than giving somebody a paid salary for a certain period of time, training them up, getting them on speed. You want people to stay for the long run and not feel like they have to choose between starting a family or having more kids and working at your company. So if I were going to wrap this up in a bow with each four categories, take a look at your country's laws, maybe even the city or state you're in, see what your limitations are and then work from there. See what works best for your team and your company. You can always update and change your leave policy. And of course, if you're in a contract system with your employees, then you can update this on their next contract. A lot of companies evolve and improve upon their leave policy as they grow. We've done that in the last few years as well. So it's okay to test things out. Just like Basecamp tried, the open ended take as much leave as you can. That didn't work. So they actually prescribed how much leave they can have. So feel free to understand that, hey, as long as you're within the laws that you have to abide by and you're being fair to your team and it's transparent and clear to them what they're getting into and agreeing to understand this is not written in stone. You can always improve upon it later on.

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Today'S lesson, one of the things I learned in entrepreneurship and building a team is there's a couple things you do not want to mess around with when it comes to your employees. It's their money and their time off. Make sure you pay them right, pay them on time and to respect the fact that, hey, they need some time to recharge, they need some R and R. They need some time just in case they get sick. They need to enjoy the festivities of their own holidays. They need to feel like it's okay to have a child or to grow their family while working at your company. So if you need to take a little extra time to sort out and decide on the numbers of your leave policy, it's okay. It's okay to also have an open, transparent conversation with your team on a call in an all hands meeting, say, hey, we're refining our policy. This is what we're proposing. How does everybody feel about this? Any questions about this? This is a work in progress and we look to improve it as we grow. People appreciate the transparency and the willingness to improve the quality of their experience working with you at your company. Thank you so much for listening to today's show. If you love it here, hit subscribe so you don't miss an episode by hitting subscribe. You tell your podcast player, hey, I like this show. When the next episode is ready, make sure it's ready on my device before I go. I want to leave you with this. Some people ask, what about freelancers, people that get paid by the hour? Well, freelancers often understand that, hey, if they're not working, they're not getting paid. But sometimes you have freelancers that are getting paid via retainer. Like they just get paid X amount of money every month and they do the job. In that case, you're going to have to have a conversation with that person because they're going to want to take some leave. And maybe you want to carve out an agreement a number of days, a policy just for them. Thank you so much for listening and I'll check you in tomorrow's episode. I'll see you then. Take care. Foreign.

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