In this article, you will learn what are accrual policies in Personio, and how to configure them for the absence types that allow it.
What are accrual policies in Personio?
Accrual policies are used to indicate that an absence type can be taken only a limited number of times.
Whether you need to create an accrual policy for an absence type (and therefore activate the Enable accrual policies? settings option), depends on whether the absence type can be taken:
- An unlimited number of times (for example, “Sickness” or “Remote work”)
You do not need to create an accrual policy because you are simply recording the number of days/hours, instead of deducting them from a total count.
- A limited number of times (for example, “Paid vacation” and “Parental leave”)
You need to create an accrual policy so that the system automatically subtracts the number of taken days/hours from a total count.
Create a new accrual policy for an absence type
If you activate the Enable accrual policies? option when creating a new absence type, you will need to create at least one accrual policy for each absence type.
To create a new accrual policy for an absence type, follow these steps:
- Go to Settings > Work Hours and Absences > Absence and select the absence type you created in the previous step.
- Scroll down and click Create accrual policy.
- In General settings, enter a name for the policy, define if the accrual year should start on January 1st, or on the employees' work anniversary each year, and enter the annual entitlement in days/hours.
For absences tracked in hours, you will be able to enter a custom date for the start of the accrual year. This option will soon also be available for absences tracked in days.
If the entitlement always accrues at the beginning of the year, an employee who started on November 1st, 2022, for example, will initially receive 2/12 × 24 days = 4 days and then another 24 days on January 1st, 2023. Note that if the annual entitlement is 24.5 days, Personio will round it up to 25 days.
- In Granting, define the granting mode to allocate the entitlement All at once (on January 1st or the employee's work anniversary, depending on what you have selected in the previous step) or In monthly installments (either on the first or on the last day of each month spent at the company).
▸ The start of the month: the entitlement generates on day 1, regardless of whether the month is fully worked.
▸ The end of the month (currently only available for absences tracked in hours): the entitlement only generates at the end of every fully worked month.
Following the previous example, if you select In monthly installments > The start of the month, and the employee won't start until November 2nd, they will receive 1/12 × 24 days = 2 vacation days for the remaining year.
- In Employment start/end, define if you wish to activate temporary granting mode and if so, define the length of the period (currently only available for absences tracked in hours), and the number of days/hours to be granted at the end of each fully worked month during that period. Define also the applicable proration rule for Start of employment and End of employment.
If the employee's contract end date or termination date (only termination date, in the case of absences tracked in hours) falls within the first 6 months of employment, the absence entitlement will be prorated regardless of the settings. Likewise, if the employee's contract end date or termination date falls within the second half of the year, the employee will always receive their full absence entitlement, regardless of the settings (as long as you select Granting mode > All at once).
Temporary granting mode means that the employees to which the accrual policy is assigned will only receive a limited entitlement for a certain amount of time after hire date, and will eventually receive the remaining entitlement. This settings option is only relevant to some markets, such as Germany.
Following the previous example, if an employee who started working on January 1st, 2023 is effectivity leaving the company on May 2nd 2023 and was given a yearly entitlement of 24 days with no proration at the end of employment, the employee will still only receive 8 days by May 2nd. Note that if the annual entitlement is 8.5 days, Personio will not round up. Therefore, the entitlement will stay at 8.5 days.
- In Carryover (currently only available for absences tracked in hours), define if employees will be able to carry over their entitlement to the next year and if so, how many hours and for how long.
Following the previous example, if carryover is allowed with no further restrictions and the employee did not use the 4 days they received on November 1st, 2023, they will receive 24 + 7 days on January 1st, 2023. Note that if the carryover accounts to 7.5 days, Personio will not round up. Therefore, the carryover will stay 7.5 days.
- In Tenure-based rules, define if the employee's annual entitlement should automatically increase based on how long they stay in the company. If so, define the frequency (currently only available for absences tracked in hours), the number of granted days/hours and also the granting moment (on the day of the tenure anniversary or at the start of the accrual period after the work anniversary).
Following the previous example, if you activate the Reward extra entitlement based on tenure? option and set the rule "After 2 year(s), add 24 hours", the employee joining the company on November 1st, 2022, will receive some additional 24 hours of time off on January 1st, 2024. These days are cumulative, so if you also add "After 1 year(s), add 24 hours", the employee will receive a total of 48 hours of time off on January 1st, 2024.
- In Summary, check that the configuration is correct and click Confirm and create.
Assign the accrual policy to the relevant employees
You will need to assign the accrual policy to the relevant employees for them to actually see the absence type.
Before going ahead and assigning the accrual policy to the employees, make sure that you are happy with the accrual policy settings, as you won't be able to edit it once it has been assigned to the employees. Accrual policies can only be edited while they are assigned to no employees.
To assign the accrual policy to several employees at once, follow these steps:
- Go to Employee list either directly from the accrual policy settings or from the main navigation bar.
- Select all the employees you want to assign the accrual policy to and click Actions > Change accrual policy.
- Select the relevant absence type and the accrual policy you would like to assign.
- Enter a date on the Applicable from field.
When assigning the accrual policy to an employee for the very first time, select the Assign since hire date option.
- Click Update policy to implement the changes.
Alternatively, you can also assign an accrual policy to an employee directly through their employee's profile.
Archive or delete the accrual policy
When you no longer need an accrual policy, you can decide to either delete it or archive it:
The accrual policy will be permanently deleted, and you won't be able to restore it. The accrual policy will no longer appear anywhere in Personio. Deleting the accrual policy will affect the employee's absence balances and entitlement: all the data, including any absence periods, will be permanently removed.
- Archive (currenlty only available for absences tracked in days)
The accrual policy will be permanently archived, and you won't be able to restore it. However, the policy will still appear as Archived accrual policy, and will be used as the basis for accruals for those employees who are still assigned to it and who did not get assigned a new policy. In other words, archiving the accrual policy will not impact the employee's absence balances and entitlement.
To either delete or archive an accrual policy, follow these steps:
Unassign the accrual policy from all employees who have it currently assigned
- Go to Employee list from the main navigation bar.
- Select all the employees who have the accrual policy currently assigned to and click Actions > Change accrual policy.
- Select the relevant absence type, but a different accrual policy. Click Update policy.
Archive or delete the accrual policy
- Go to Settings > Work Hours and Absences > Absence and select the relevant absence type.
- Scroll down to the accrual policy that is now assigned to 0 employees.
- Click on the accrual policy to open the overview, and click either on Archive or the Delete.
- In the pop-up window, click Archive or Delete to confirm.
- The archived accrual policy will now appear at the very bottom under Archive, but you will no longer be able to assign it to any employee. The deleted accrual policy will be removed entirely.