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The 9 Most Important Benefits of Vacation Management Systems And How They Work Explained

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HR vacation control software is great for managing risks and avoiding costs so that negative outcomes can be avoided. But what about the positive effects that come with using these solutions?

On the surface, managing absences seems simple. Monitor how many vacation days each employee takes and ensure this complies with local labor regulations. When there are three people on board, things are still simple. However, with 20 people it becomes tedious and complicated.

That's why a vacation management system is a valuable addition to risk management and cost reduction in your company.

Do you regularly monitor your employee absence management system?

One of the basic tasks of the human resources department is vacation management. You have come to the right place if you have not yet dealt with this topic or are wondering what makes a good vacation management system.

This blog article covers a variety of topics, including what vacation management is and why it is so important. Let's dive in!

How does a vacation management system work?

A vacation management system is the process by which employees request vacation, supervisors approve it, and vacation balances are monitored.

Most companies initially opt for a manual process, which requires a lot of work from the HR department.

A typical vacation management looks something like this:

     1. The employee uses an Excel file maintained by HR for viewing purposes only to verify his vacation amounts.
     2. The employee sends his manager an email.
     3. The manager reviews the work schedule and absences of other team member before approving or rejecting the leave.
     4. The HR manager is also informed of the approval and is then involved in   adjusting the vacation balances.

For a few people this is essential and unproblematic. But what if you have more than 20 employees working in different locations in different time zones and eligible for multiple types of leave?

As more variables enter the equation, the furlough system takes up a significant portion of HR's bandwidth. At this point, an automated vacation management system can make financial and time sense.

Advantages of the absence management solution

However, the primary goal of the vacation management system is to support the company, not to prevent problems. Introducing a vacation management system in the company has more than ten advantages. Here is the list, as short as possible:

1.Real-time information

Without knowledge it is impossible to make wise decisions. Using a simple vacation management system does not utilize the most up-to-date knowledge because it is not based on the latest information.

As a result, the manager uses a spreadsheet (or a notebook, or something else that isn't a modern vacation management system) to determine whether the employee's request for vacation will be granted in the requested time.

However, the data may need to be updated, so even the best decision is made in catastrophic circumstances. For example, vacation is denied to an employee who really needs it, or too many rights are granted even though there are not enough employees available.

2.Significantly less paperwork

One benefit of adopting digital tools is the elimination of boring and repetitive tasks. An automated and integrated online leave management system significantly reduces paperwork through integration.

Managing vacation on paper is annoying and harmful to the environment. Employees struggle to print and fill out paperwork, and companies struggle to keep such records.

With a vacation management system, vacation requests and their approval can be completed with just a few mouse clicks.

3.Better communication

Before taking a leave of absence, it is common practice to ask team members about their plans and requirements for the coming days. Thanks to the central system and the database that contains all the information about the planned vacations, all you have to do is check the availability of the other team members during the corresponding period.

Plus, it's easier to organize every vacation for team members who share their skills across the company.

4.Reduction of administrative burden.

A vacation management system also has significant administrative benefits. Completely eliminating repetitive tasks speeds up and simplifies vacation management. Modern vacation management systems can be integrated into other office products. Such a high level of automation provides a complete ecosystem for managing employees while saving a lot of time on administrative tasks.

5.Manage vacations easily

With an automated vacation management system, employers can better manage their employees' vacation days. With the vacation management system, your employees can record all absences such as vacation, sickness, etc. In addition, your employees have access to their vacation times at any time.

6.Insightful interface transparency

The business owner can quickly get an overview of all vacation-related metrics when all vacations, whether planned or unplanned, are consolidated into a single, complete dashboard. Information about employees who should be working more productively or misusing their vacation time.

Dashboard accessibility provides a fantastic tool to identify productivity gaps and address issues such as absenteeism or abuse of company policies. It can also be used to adapt the current strategy to new requirements.

7.Management of free time and vacation

The first and most important step to effective leave management is access to real-time information about company-wide leave. Otherwise, the company may prescribe certain basic forms of management, such as: E.g. "appoint your deputy before vacation" or "only one person from a specific team can take vacation".

However, these may not be adaptable enough if they do not take into account how the company's needs for expertise change or if they require staff to remain in place during less hectic times. Of course, policy can be changed to reflect current circumstances, but this undermines the claim that there are "clear and transparent rules" that apply to everyone.

8.Multi-tiered approval system with improved accessibility

Data accessibility and security are inextricably linked. The user must be able to access the data as easily as possible while preserving the data in a way that prevents accidental loss or unauthorized modification.

Typically, the manager who approves the leave works with the employee. In some cases there may also be a second approver, e.g. a project manager, a human resources manager or even a company owner. The vacation schedule and information about vacations for all employees and a specific employee must be accessible to all interested parties.

9.Retention of data

Every company experiences breakdowns. Therefore, it is better if leave management records are more secure. And the best and safest way is to store them in the cloud.

A pen and paper system kept in a notebook could be misplaced while cleaning up the office, spilled on coffee, or even accidentally taken home and never found again. Spreadsheet files stored in computers are often overwritten, deleted, or mistakenly thought to be current.

Even the online spreadsheet becomes clogged and bloated with the increasing amount of information from daily work. The best strategy to prevent data loss is to store vacation management information in a dedicated vacation tracking system.

How important is vacation management?

An employee leave management system is crucial to enforcing a leave policy in the workplace. It makes records easier to access and allows companies to properly offer benefits such as paid sick leave.

A company's leave management procedures should effectively record employee absences. Depending on the restrictions, an employee's vacation can be paid or unpaid, so the process of salary sacrifice or paid vacation is as simple as possible with a vacation management system.

Granting vacation to employees and tracking vacation numbers represent a significant effort for a company that can be managed with the help of a vacation management system. Leave requests can be used efficiently and approved by those responsible for the system.

To maintain effective company operations, it is crucial that employee absences do not result in financial losses. The ideal strategy is to assess how an absence affects work and then decide whether to approve or deny it.

What functionality does the vacation management system have?

With the help of a vacation management system, employee vacation requests can be more easily tracked, managed and recorded. Its main goal is to handle employees' vacation requests appropriately while ensuring that their absence from the office does not have a negative impact on the company. Like attendance management, leave management involves multiple steps, from developing a policy to putting it into practice. The most important steps in the vacation management work process are listed below.

Step 1 Develop a Policy
Step 2 Select a Policy
Step 3 Designate approval officers
Step 4 Month-end calculation

Step 1: Develop a policy

A vacation policy includes a set of standards that must be set for the benefit of employees and the company.

Step 2: Select a policy

The manager communicates the assignment of the policy to the employee after determining all the requirements. Managers assign the relevant policy to a specific group of workers based on that group.

Step 3: Designate approval officers

An employee's absence must be approved by a higher authority if it is to be taken. This responsibility is transferred by the connected HR software to the authorized superiors of the individual employees. If approval is not available, the employee cannot take vacation for a valid reason.

Step 4: Month-end calculation

Management must take vacation days taken for legitimate reasons into account when determining the total number of hours worked by employees. Depending on management's decision, the outstanding vacation days can be redeemed, transferred or forfeited.


The vacation management system is a great example of a function that works in the background and is not visible in core business operations. However, it is a fundamental optimization that offers so many benefits that working without it ultimately seems unreal.

Utilize Icehrm's advanced solution to revolutionize leave management. Increase production by streamlining procedures. Investigate right away! Discover the smooth leave administration of the future.

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