Why do we need a leave management system?

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The term “Leave management” means that employees request leave from work and supervisors grant or deny leave based on human resource policies in an organization. Managing leave is one of the simplest but critical HR activities, often taking up a significant part of the HR team’s time. Staff must ensure compliance with leave policies, the availability of sufficient staff at all times, and also to ensure employee satisfaction.

In a simple term, leave management is a process used to manage any leave requests and track absenteeism. If paid leave is offered as a benefit, the leave management system can calculate compensation for absent staff and record this information in the company’s HR records.

Why Leave management is important?

To be successful as a company, it is important to have a reliable leave management system. Research has shown that poor leave management practices can negatively impact employee performance. It can also affect employee morale and thus project results.

Ineffective leave management can harm the profit of a company

Leave management processes to take an important place in organizational policies simply because PTO (paid time off) makes a significant financial impact on a company’s profits. Employers are therefore always looking for effective, paperless solutions that reduce or eliminate the margin of error in calculating leave payments.

Ineffective leave management can harm productivity

Business leaders often underestimate the impact of absenteeism on employee productivity. Even if they are aware of the absenteeism, they do not understand how serious the situation is. People are one of the critical success factors of a company. Unauthorized absenteeism, lack of time and leave planning, reduction of productive times can cause damages to the overall efficiency of the company.

Here are 12 reasons why do we need a leave management system;

1. The commitment and satisfaction of the employees are significantly increased

The process of managing leaves and absences due to illness or other reasons is called holiday management. A good holiday management system increases employee satisfaction, provides transparency and reduces unexpected events. It also reduces or eliminates unexplained or excessive absenteeism.

2. Reduce costs

The cost of leave and absences represents approximately 35% of the company’s payroll. For this reason, effective leave management is extremely important. In small and medium-sized companies, paid leave has a significant financial impact on the company’s financial results.

The cost of implementing and maintaining a leave management system exceeds the benefits it would provide. As for the return on investment, costs remain low and the results will be visible in a few days rather than a few months since these solutions are hosted in the cloud.

The conclusion is clear: the introduction of an efficient leave management system will significantly reduce administrative costs.

3. Increases productivity

In addition, companies benefit from an enormous increase in productivity:

  • Fully automatic idle time monitoring without human intervention, so that you and your employees are always up to date.
  • Self-service functionality, an employee or a manager can access the dashboard and take action.
  • Dynamic holiday entitlement calculators, every time a new holiday entitlement is added.
  • Handy ready, book your next weekend vacation from anywhere.
  • Employee records, need to know when you last took a break, or want to know how many PTOs are available?
  • Single Sign-On, no more trouble remembering the password of the different websites.

4. Ensure that policies are consistently applied throughout your organization

Do you need to ensure that employees use only the authorized number of PTOs each year? Would you like to give your employees the opportunity to book a half-day leave? Does a colleague need 3 additional days of leave because he or she has worked overtime in recent months? No problem, no problem. The holiday guidelines will help you deal with this situation. In addition, you can apply maximum balances or correct the leave authorization workflow for each employee.

5. Eliminates errors

Management is looking for effective systems to reduce errors in the calculation of HR and annual leave.

Unexpected employee behavior can be costly for any organization. Staff inconsistencies can lead to missed deadlines, poor customer service, billing delays, unfinished tasks or unfulfilled goals, and more.

6. Transformation of HR practices

The leave management system replaces old paper-based practices. If you’re still using Excel or online tables to easily determine the number of days off for each employee, it’s time to change them.

We do not recommend Excel PTO sheets because they can cause errors and employees can abuse them. Spreadsheets for vacation tracking are not optimized with calendars. Such XLS models do not notify managers when changes are made, and when a hard drive crashes, all records disappear.

Online leave tracking also help companies to ensure compliance with labor law.

Accountants and payroll teams will be more efficient and will have the information they need at all times.

8. Informed decisions

As a manager, you know who is in the office and when, who is constantly absent and what the company’s productivity is. As a team leader, you know who you can count on during the holiday season. Even if someone requests a PTO, you can easily approve or refuse such a request because you know that the area is covered by other colleagues. As an HR analyst, you can find out about a new position based on employee demand and availability.

9. PTO monitoring

A leave management system is intended to improve the management of absences, vacation, paid vacation or sick leave. All this in accordance with the strict company-wide guidelines.

10. Better planning

Once you know what your free time is, when your colleagues will be gone, what your company’s holiday policy is and when the next holidays will be, you can book your next holiday with confidence. All this can be accessed directly from the interactive calendar. The workforce planner is a great asset for any small or medium business.

11. Optimized operation and communication

Once you have submitted the request, the records are updated immediately. The manager then receives a notice with the request for approval of your exemption. It’s incredibly simple and very effective.

12. Powerful automation

In addition, to leave management, automation in small businesses is another reason to move to a human resources management solution. Here are some ideas of what this automation is all about:

  • Employee Self-service — Employees can register for absences themselves, understand their available PTO quotas and know who is not present at the same time.
  • Centralized employee files and data — All balances are constantly updated when an employee makes a new PTO request or when a recruiter adds a new policy.
  • Holiday calendar — If you leave the calendar and are automatically synchronized, you can make your business more efficient.
  • HR reports — Create customized reports on employees when they need them.
  • Integrations — Integrates with many platforms including Slack, Google, and Outlook.
  • Mobile functionality — Vacations booked on these platforms may be approved by managers or supervisors on the road.

Looking for an automated Leave Management system, we suggest you IceHrm which is one of the best HRIS systems which has so many HR functions automated into one system. Get more details here.