13 benefits of a leave management system

Leave management HR software is great when it comes to managing risks and avoiding costs – so they are great when stopping bad things from happening. But what about good things that will come from using these solutions?

Leave management is a simple business at first glance. One needs just to keep an eye on the number of leave days of every employee, and ensure it is sticking to the local labor laws. An automated leave management system also reduces human errors by accurately calculating leave balance, accruals, and entitlements. Additionally, it can integrate with payroll systems to ensure employees are paid correctly for paid leave, sick leave, or unpaid leave.

But what is easy when there are three people on board gets painstaking when there are 20 and deviously complicated when there are more. Modern leave management systems automate the entire leave management process, eliminating manual leave tracking, paperwork, and repetitive HR tasks. This significantly improves operational efficiency and allows the HR team to focus on more strategic activities.

In this article you will learn:

• What are the key benefits of a leave management system
• How automated leave management improves efficiency
• How to manage employee leave requests effectively
• How leave tracking supports workforce planning
• How modern leave management systems improve employee satisfaction

Why is leave management important?

When it comes to managing the employee leaves, the employer deals with numerous challenges, starting from multiple leave types, the differences between state-specific employee laws, and the tensions in the teams regarding the spare time taken.

According to the DMEC Leave Management Survey, leave management is fairly straightforward when it comes to smaller companies, yet it is both costly and complicated with the growing number of employees.

The vast majority (93%) of companies with less than 100 employees on board deal with the leave management internally. With the growing number of people working for the business, the share of companies outsourcing the leave management increases. When the number of employees reaches more than 20,000 people, the share of companies that outsource the leave management rises to 36%.

Significant differences start with the industries, with the clear sign that more tech-savvy segments, in telecommunications, have a share of companies that outsource leave management, reaching 71%. In retail and wholesale, the share reaches 30%, and in services it accounts for 19%.

Leave management system benefits

But the core principle of the leave management system is not in avoiding problems, but in bringing benefits to the company. In fact, there are at least 13 benefits of implementing the leave management system in the company. Keeping things short, here is the list:

• No data loss
• Accessibility and multiple approval processes…
• …but no way to skip an approver
• Real-time information
• Vacation management
• Audits and backward checking made easy
• Admin operation
• Significantly reduced paperwork
• Limited availability of manual interventions (especially unauthorized ones)
• Improved communication
• Transparency with a dashboard
• Boosts compliance
• Promotes the company’s values

No data loss

There are accidents in every company. So the more secure the data records regarding the leave management, the better. And storing them in the cloud is probably the best and the most secure way available.

A pen-and-paper system stored in a notebook can be lost during the office tidying; there can be a coffee spilled on it, or someone can mistakenly take it home and never return. Multiple spreadsheet files stored in computers get deleted, overwritten, or mistakenly taken as the most recent one.

Oh, and nearly 1% (0.86%, to be precise) of hard drives used globally have failed in 2020. So how many hard drives are there in your company, and how many of them will fail out of nothing?

Even the online spreadsheet gets messy and bloated when packed with the increasing amount of information from everyday work. So storing the leave management information in the dedicated leave record management system is the best way to keep the data from being lost.

Accessibility and multiple approval processes…

There is always an uneasy relationship between data availability and security. The data needs to be kept in a way that makes an accidental loss or unauthorized changes impossible, yet the user needs to get access to it as easily as possible.

In the typical scenario, there is an employee and the manager who approves the leave. Occasionally there is an additional approver – for example, an HR manager, project manager, or a business owner in some cases.

All of the interested parties need to have access to the leave schedule and the information regarding the leave of both all employees and a particular one. Modern leave management software empowers employees to submit leave requests, check their leave balance, and track leave time independently. This self-service approach improves employee satisfaction and reduces the workload for HR management. The ability to show it in a convenient dashboard is a strong side of cloud-based leave management systems like Calamari.

Calamari is a modern leave management solution that helps organizations manage leave requests, track employee absences, and automate approval workflows in one centralized platform. It supports multiple types of leave, integrates with attendance management software, and ensures efficient leave management across teams. Want to give it a go? Start your free trial now!

...but no way to skip an approver

On the other side of the same coin – with multiple approvers, it is possible to skip one – either on purpose or by mistake. The situation when one of the approvers is not informed about the leave can come with multiple consequences – from building tensions in the company to failing to deliver a key project due to the lack of desired skills.

Real-time information

There is no way to make informed decisions when being uninformed. When using an unsophisticated leave management system that is based on the latest knowledge available, not the latest at all.

Consequently, when the employee wishes to take a leave, the manager uses a spreadsheet (or a notebook, or anything that is not a modern leave management system – you name it) to check if that is possible in the desired time.

But the information can be outdated, and the best decision in the known configuration can end with a catastrophe – either by refusing to grant the vacation to the employee who really needs it. Or by granting too many permissions and staying understaffed. With real-time visibility into employee absences, managers can better plan workforce availability, avoid overlapping leaves of absence, and ensure business continuity during peak periods.

Vacation and time off management

Having real-time and convenient access to the information about the company-wide vacation is the first and most important step toward real-deal vacation management. Without that, the company can impose some initial forms of management, like “appoint your deputy before the vacation” or “only one at a time from a particular team can take a vacation”.

But these can be not flexible enough by skipping the changing demand for skills in the company or forcing the team to stay in position during the less intense time. The policy can, of course, be adjusted to the current situation, but it ruins the narrative of “clear and transparent rules” that apply to everybody.

Audits and backward checking made easy

So again, where was that notebook with a Lion King on the cover we used in 2004? Or maybe it was that one with a maple leaf with our boss’s daughter’s hand-drawn superhero bee, we used in 2005?

There are numerous situations where the company needs to check the archived data – setting an agreement with a former employee, an external due diligence audit, or employee rights control done by authorities. Delivering a reliable source of information as fast and conveniently as possible can be a game-changer, either in avoiding the penalties or scoring better in the eyes of the investor.

Admin operation

With the online-based, dedicated tool designed to manage the leaves, the administrator of the system can do all the repetitive tasks in a fast and convenient way. Either adding or removing users can be automated and comes with little to no struggle.

Also, using the dedicated employee leave management system, the administrator can build or remove groups of employees depending on the type of their contract, the project they work for, or any other factor one considers important.

More sophisticated attendance management software is integrated with modern office tools like Slack, Microsoft Teams, or Google Docs and shares the information in real-time. One can ask for leave using the Slack vacation tracker and get updated about his or her case status via that channel. Moreover, the tool can automatically fill in the data gathered with the system. The admin operations on the system can also come in the form of integrations with clock-in clock-out or other systems to track time to deliver a more comprehensive ecosystem dealing with human resources in the company.

Administrative access to the system is a powerful feature that is not to be underestimated.

Significantly reduced paperwork

The power of integration and automation delivers a reduction of dull and repetitive tasks. The painstaking amount of paperwork comes to an end with the HR leave management software that supports all the leave management processes. The paper versions of every step, either inquiry or granting the leave, can be printed at will, yet it is not necessary to do so.

Furthermore, reducing the paperwork is a more convenient way to deal with the leave management from the employee’s point of view – the process is reduced to several clicks. There is no need to print, sign, or collect approvals around the company.

Limited availability of manual interventions (especially unauthorized ones)

When there is an admin in the organization who takes care of the system and the enclosed environment of people with various roles, the ability one has to do an unauthorized change is significantly reduced.

In a traditional system, there was also a risk of fraud – taking a leave and then removing it, taking it one day shorter than it should be, or manually adjusting the number of leave days one has.

Not my problem, you say? According to Varonis's global data risk report, up to 22% of all folders in the company (yep, folders! These little ones that are usually too small to bother) were open to every employee in the company. So why is this particular one, which contains the information regarding the leave management, considered a secure one? Is there something more than wishful thinking behind that?

When there is a mess with constantly updated spreadsheets or a manual tracking system, the risk of some mess-on-purpose is always present.

Improved communication

Before one takes a leave, it is common to ask the team members about their plans and needs for the upcoming days. With the centralized system and database containing all the information about the planned leaves, one can just check the availability of other team members in the desired timeframe.

Also, it is easier to plan every leave for members of multiple teams, who deliver their skills across the whole organization.

Finally, when all leaves are easy to check, the situation where one just forgets about the upcoming leave of a colleague becomes uncommon. But the benefits of the leave management system do not end here.

Transparency with a dashboard

When all the leaves, either planned or unplanned, are summed up by a single and comprehensive dashboard, the business owner can easily check all the leave-related metrics in one place. The information about the employees abusing their leave policies, underusing their vacation, or just being below the desired productivity.

The availability of the dashboard delivers a great way to spot productivity leaks and tackle problems like absenteeism or abusing company policies. Also, it can be used to adjust the existing approach to new needs.

Advanced leave management systems provide actionable insights from leave data, helping organizations identify absenteeism trends and proactively manage employee well-being by spotting potential burnout risks early.

Boosts compliance

This challenge is especially seen in the multinational companies and teams distributed around the globe. Regardless of the headquarters’ placement, the company needs to stay compliant with the local employment laws. When there is only one legal framework to stick to, it is not that challenging, but keeping an eye on multiple legal systems gets increasingly painstaking.

When there is a specialized provider, keeping all the compliance is on its side, and all the pain is transferred elsewhere.

Usually, that’s the whole point of HR leave software.

Promotes the company’s values

The last point is about delivering all the aspects that build the company culture – transparency and compliance deliver trust among all company employees, regardless of their roles. On that, there can be other values built.

Without transparency, the company can be no more than a bunch of people working together for money and nothing more. That is the last of many benefits of the online leave management system on our list.

Summary

The leave management system is a great example of a feature that works in the back-end without clear visibility in the core company activities. Yet it is a crucial optimization that delivers so many benefits, that after some time it is just unbelievable to work without it.

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