Ascentis blog: What Can Employers Learn From Amazon’s Leave Management Problems?

I’ve written blog posts about workforce management issues for Ascentis for several years. Here is one of those.

Workforce management and payroll operations got an unexpected moment in the spotlight recently with the publication of a New York Times report on Amazon employees’ struggle with systemwide leave management and payroll errors. The piece describes a range of difficulties for hourly workers in the company’s blue collar roles — delivery drivers, warehouse workers, and shipping center employees — as well as many white collar employees.

The article quotes a number of current and former Amazon employees whose leave requests have been processed incorrectly, subject to long delays, or simply lost in the shuffle of the company’s day-to-day business. Some have experienced underpayments or delayed paychecks that have taken months to correct. Some have had disability benefits cut off unexpectedly. Some have been disciplined or even fired from their roles for taking sick leave and other time off that they believed had been fully approved. In many of these cases, the impacted workers live on a paycheck-to-paycheck basis. These errors have set off chain reactions that have left them in desperate financial situations.

The silver lining to this upsetting story is that these mistakes can be used as valuable lessons for other workplaces. We’ve identified five key pain points touched upon in the New York Times piece, as well as some ideas about what companies can do to avoid similar situations in their own systems.

  1. Integration: One of the biggest root causes of confusion in the Amazon leave management system appears to be that it is, in fact, multiple systems. The Times article characterizes it as a “patchwork of software from a variety of companies,” all of them with their own processes and requirements. That means that two employees trying to submit a leave request might have to go through two entirely different sets of steps, both of which might feed into a software system designed to manage completely different processes for tracking time and leave. This is actually not an uncommon problem for businesses that have experienced rapid expansion and have outgrown some of the systems that worked for them on a smaller scale. This underlines why it is so important for employers with multiple divisions or facilities to invest in software systems that integrate easily and seamlessly with each other. That could be an all-in-one solution that can be customized to manage multiple processes across the same system, or a leave management system that is proven to integrate smoothly with the employer’s payroll, time and attendance, and scheduling systems. Relying on a “patchwork” system virtually guarantees costly miscommunications somewhere along the line.
  2. Automation: According to the Times, the unwieldy nature of Amazon’s leave management system “forces human resource employees to input many approved leaves, an effort that last fall alone required 67 full-time employees.” Not only is hiring that many workers just to manage leave and time-off requests expensive, processing that volume of data by hand is a sure way to maximize human error. The mistakes that come out of processing leave management by hand will assuredly snowball, creating even more work for administrators who the article notes are already burning out at a rapid clip. A reputable workforce management system can automate many of those time-consuming leave management processes. Incoming leave and vacation requests can be submitted via an electronic dashboard. Those requests can be automatically checked against employee schedules and previous time-off requests. Schedule adjustments can be automatically synced with payroll to prevent over- or underpayments. Managers can see automatically generated criteria, such as leave balances and leave tracking, which help them decide whether to approve or deny leave requests. The entire messy process can run so much more cleanly and efficiently with the right software system in place.
  3. Retention: The chain reaction carries on further as the Times article details the high rates of burnout among HR department staffers trying their best to process leave requests and payroll adjustments in the midst of all of this chaos. “Current and former employees involved in administering leaves say that the company’s answer has often been to push them so hard that some required leaves themselves,” the story notes. What started as an attempt to do right by the impacted workers had the effect of pushing many HR professionals to the point of burnout, as trying to resolve an issue of this magnitude manually simply proved to be too much work. As more and more of those employees left their positions, the leave management problem was compounded by high rates of turnover amongst the workers who were tasked with alleviating it. This is another area where increased automation amongst well-integrated systems can save time and also have a real impact on employee retention, productivity, and the bottom line.
  4. Education: High rates of turnover often means that roles have to be filled by workers who may not be fully prepared to fill them. The Times report finds numerous cases where workers tasked with explaining and administering leave “regularly gave incorrect information to workers.” It isn’t clear what leave management training these administrators received, but it clearly was not enough. Giving employees incorrect information about such a crucial and sensitive subject makes an already difficult situation all the more volatile. A worker who believes they have followed the proper procedures and still ends up having their leave denied is likely to become justifiably frustrated and less effective in their roles. Some of these problems could likely have been avoided with a robust learning management system that requires administrators to complete leave management training and certification programs before handling these tasks for employees.
  5. Compliance: Amazon’s concerns in this area go beyond turnover and employee dissatisfaction. The Times reports on several instances where employees allege that the company has violated their rights under the Family and Medical Leave Act (FMLA). Those complaints include cases wherein employees were fired for absences that they believed were approved. Noncompliance with FMLA requirements, as well as any similar local or state laws, is a major pitfall for any employer. Beyond the fines and sanctions that come with violations of labor laws, a business with a reputation for mishandling employee leave and payroll will quickly find it that much more difficult to recruit quality hires. Yet again, an automated HR management software system that can automatically check leave requests against all applicable compliance requirements can help an organization avoid some serious complications.

The Times piece does include some hopeful notes, as Amazon is reportedly working hard on updating its systems to avoid this kind of difficulty in the future. For the time being, other employers can take this case as both a cautionary tale and a teachable moment. These issues are not exclusive to a giant corporation like Amazon. They are distressingly common in businesses of all sizes. In an era that offers so many simple, technological solutions, upgrading to a well-integrated, easy-to-use, fully automated employee leave management software system is a must.

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