In this guide, we’ll discuss nine aspects to consider if you want to create the best leave management system for your team.
We’ll also talk about why leave management is important, and why it’s a good idea to use a leave tracking software.
But before we jump in, let’s briefly cover what is the purpose of having a leave management system, so you can better understand why the features discussed below would benefit your business.
What is leave management?
Leave management is the process within your business that handles the administration of your team’s time-off from work. It is also known as absence management or time off management.
Here are some of the tasks that are part of your employee leave management process.
- Time off requests
- Approving absence requests
- Communication about time off between your employees and HR
- Tracking your organization’s vacation calendar
- Notifying payroll about employee time off
- Updating absence records for each employee
What is a leave management system?
A leave management system can include the tools or SOPs (or both) used by your team to implement your leave management processes.
In other words, it’s the system your team uses to request, approve, and track employee absence. A leave management system also helps communicate and implement your leave policy throughout your organization.
9 features of an ideal leave management system
The purpose of a leave management system is to streamline the process of requesting and approving leave, while eliminating errors in leave and payroll tracking.
Your system should also reduce the time that your HR department spends on leave management.
Here are nine features to look for to build the best system for your team.
1. Integration with your favorite tools
Your leave tracking system would ideally integrate with tools you’re already using, like Slack, Microsoft Teams, etc.
For example, it would make sense to be able to request and approve leave within Slack, if you’re already using it to communicate, share files, etc.
Integration with your current apps would keep things simple and eliminate the need to train your entire team on how to use a brand new tool.
2. Organization-wide leave tracking
A leave tracking system should provide a calendar view that combines the absence schedules of all team members across the organization.
Being able to see an organization-wide leave calendar provides real-time information about staff availability during the coming weeks and months.
Understanding your team’s availability will help you plan production schedules, as well as other business operations.
For international teams, the calendar should include local holidays in each country so you can plan for any absences in advance.
3. Calendar Integration
Similar to communication platforms like Slack or Teams, your leave management system should integrate with the calendars you’re already using.
Instead of maintaining a separate time off calendar, it would make things easier if you could see your team’s availability within Google, Outlook, or Apple calendars.
It would help keep everyone up-to-date on the leave schedule, making it easier to plan tasks and projects.
4. Simple leave request and approval process
Arguably one of the most important features of a high-performing leave management system. It should be easy to use for your entire team.
Team members should be able to check how many leave days they have remaining, and use a quick and simple process to request time off.
The process should be equally simple for HR. They should be able to view the team member’s profile, who else is on leave on the requested days, and make a decision to approve/deny the request.
The workflow should be simple, efficient, and eliminate paperwork and unnecessary admin tasks.
5. Keeps everyone up-to-date
Your system should be set up in a way that keeps everyone up-to-date and informed about scheduled leaves and holidays.
This helps to prevent unexpected disruptions in your workflow.
Ideally, team members should be able to see when fellow employees are due for leave, in order to better plan and manage upcoming projects, or arrange time off of their own.
6. Customizable leave types
Your system should let you customize leave types in your leave management system.
Depending on your company’s time off policy, and sometimes local labor laws, you might provide different leave types. Sick days, unpaid leave, parental leave, paid time off (PTO), and vacation days are some examples.
You might have separate leave policies for your business’ different locations, and you’d want to be able to tailor your system accordingly.
7. Accruals and carryovers
Once again, depending on your time off policy and local regulations, you might have to allow for accrual and carryover of leave days.
Your leave system should allow you to set your carryover policy, and it should automatically track and display leave balances to both HR and employees.
If your HR staff has to manually compute vacation balances, it could lead to errors in tracking and cause payroll issues.
Detailed reports help you identify trends within your team and understand your employee’s needs better.
You might find that your team members are taking too few days off, which could potentially lead to burnout and affect performance. On the other hand, you might find certain employees have a tendency for absenteeism, and that you might need to find new ways to motivate them.
Ideally, you’d be able to generate reports within your system and then export them as CSV files.
9. Team member profiles
Finally, your leave tracking system should allow you to create a profile for each team member.
Your time off agreements may vary between different team members, and their profiles should specify how many leave days they get for each leave type. For example, how many paid time off days, how many vacation days, etc.
HR staff should be able to access employee profiles easily to check their time off status when approving leave requests.
Why is your leave management system important?
With a leave management system, you can play it by ear, or you can make sure you have a rigid and effective plan in place to manage employee leave.
Here are some of the reasons why your company should put thought into your leave management system:
Increased productivity – Tracking and managing employee absence takes up significant bandwidth for your HR manager. Leave management simplifies the entire process, allowing your HR and payroll departments to focus on more productive tasks.
Accurate payroll processing – Since payroll is related to employee absence, any errors in leave tracking can also cause payroll errors. Leave management reduces/eliminates errors, allowing for accurate payroll processing.
Prevent short-staffing – One of the biggest issues with not planning employee absence is that you could inadvertently end up with too many people taking time off at the same time. You could miss deadlines, the quality of your work could suffer, and it could overstrain your other team members. Good leave management prevents short-staffing.
Compliance with labor laws – Depending on where your team is based, especially if it’s a remote team, there could be labor laws that regulate different types of employee leave. Leave management includes awareness of those laws and designing your leave policy accordingly.
Leave management software
Many small to medium businesses are still using email to manage their leave tracking process.
Team members email their leave requests, the HR staff manually looks through the company leave schedule and employee profiles, and responds with their decision via email. If the leave is approved, they update the absence calendar.
This process might work well for very small teams. But it can quickly become complex if you have more than 5-7 team members. It can lead to errors in tracking, short-staffing, and other negative outcomes for your business.
A leave management software is a tool that automates and streamlines the leave tracking process for your HR department.
The ideal leave management software would include many of the features mentioned above. These features correlate to the following benefits for your company, and your company’s leave management system:
- Eliminates paperwork and time-consuming HR tasks
- Streamlines absence-related communication
- Reduces/eliminates errors in tracking leave schedules
- Allows real-time calendar view of staff availability
- Clarifies company time-off policy
- Helps you stay compliant with labor regulations
Leave management is a vital task for your HR staff. But it is often unnecessarily inefficient, time consuming, and error prone, leading to loss of productivity for businesses.
A leave management system can increase accuracy, save time, and make the leave request process easy and simple for your team. For best results, try to create a leave tracking system with as many of the nine features mentioned in this article.