Excels sheets, applications, and paper forms are no good for managing employees’ leaves. These are traditional tools that do not stand a chance to stay in line with government rules and regulations.

Even small businesses these days aren’t limited to a specific area. The internet has allowed them to expand their services nationally and internationally. It is impossible to keep a correct record of employees and their leaves on a simple spreadsheet as it would be difficult to synchronize it with your payroll system.

Managing leaves is a critical HR activity and significant for any business because it is associated with compliance of the company’s leave policy, availability of staff at work times, and employee satisfaction and motivation. Proper leave management also ensures no legal complications, company disasters such as unavailability of workforce and payroll errors.

What is Leave Management System?

Leave management can be referred to as a process of managing employee leaves and tracking their absenteeism in a business or company. Everything comes under the leave management system from submitting of leave requests or applications by the employees to leave approval.

In short, it is a process which takes care of any time off request placed and tracks the period in which employees are not working. Depending on the type of leave approved – paid or unpaid, the HR calculates the attendance management system and the compensation and processes it with the employee’s salary.

Earlier, leave management was done manually in all businesses. However, this is now an obsolete method and businesses have now started benefiting from the available technologies. An automated leave management process offers immense benefits.

Significantly, the leave management system selected for the business is effective and easy to handle. It helps address some of the challenges like:

1. Ineffective Leave Management Process Can Impair Productivity of a Business

Most business owners underestimate the impact of absenteeism on productivity. It is something that they oversee until absenteeism begins to take a toll on their productivity. Employees or workers are the main reason why a company is running. Absenteeism and unplanned leaves reduce productive time, damaging the efficiency of the business.

2. Ineffective Leave Management Harms the Profit of a Business

Leaves also have a financial impact on the profits of a business. All the paid leaves given by the employers are what affect the profits. Thus, businesses should always look for a good leave management system provided by reputed online leave management systems in India that calculates all the leaves without making any errors.

Key Characteristics of an Efficient Leave Management System

All businesses understand that employee engagement and productivity are related to each other and are highly impacted by leaves. Yet, they fail to forgo their old manual ways of handling leaves where the employees are always running around their seniors to get their leaves approved. On the other hand, the higher management is trying to figure out whether or not the leave can be approved and if they have enough employees working to cover for the person taking leave on their excel sheet.

Both physical paper applications and excel spreadsheets are outdated. Moreover, they do not offer accuracy or a clear insight into leave management. They are simply consuming resources and time, causing employee dissatisfaction and affecting the business’s productivity.

Giving an approval requires access to a platform where the managers can see everything clearly. Information of every employee and the features with which they can look up the details of their leave history – what is available or not available.

A good online leave management system allows the employee to pre-plan their leaves and the HR to approve long-term plans for the year or month or any sudden leaves. Approving or rejecting a leave application would require a single click. A good software would bring adherence and transparency to the leave policy of a business.

A comprehensive and advanced leave management system allows accurate, fair and efficient processing of employee leaves. Before selecting a leave management system for your business, you must remember that the same software should be implemented in all work locations (if any). Besides processing and approval etc., it should also be able to generate reports.

What to consider while searching and selecting an effective Leave Management System?

There are several factors that must be considered before hiring a vendor for the leave management process. The provider’s experience, real-time eligibility, embedded compliance features, implementation support, etc., should be present in the leave management system. Here are some factors and/or features that a good attendance management system should have.

1. Powerful Automation

A good leave management should offer powerful automation as it is the key to efficiency and productivity. Automation is all about:

  • Leave management:

Features and settings that automatically manage annual leave allocation, including leave carry-over and auto-increment.

  • Absence reports:

This allows to view insights based on real-time data for absenteeism. This way, the senior management staff would be able to better understand where their employees stand when it comes to taking leaves.

  • Custom approval:

For every leave request applied, the leave planner should be able to route the request to the relevant manager. All emails should be auto-generated and the tasks should be updated to ensure the real-time data is managed efficiently and accurately.

  • Custom leave types:

There should be a feature to add/approve various custom-created leaves for better management. For instance, half-day requests, custom allowance, etc.

  • Calendar feeds:

The calendars for all the employees should be auto-updated with various events such as public holidays, birthday feeds, work anniversary feeds, new vacation feeds, etc.

Applying for leaves shouldn’t be difficult for the employees neither should their approval. One-click option to apply for leaves and similar for approval or declining the request should be made available. Employees should be able to view their leave balance so they can apply for them accordingly. It is efficient and time-saving.

  • Email notifications:

Automatic emails should be sent to managers about having received a leave request. Similarly, the employees should also receive emails about their leave status.

  • Multiple permission and access levels:

Access to certain rights and information should be given to various people in the management depending on their position. For instance, certain data should be kept confidential from employees, but the business owner should be able to access it.

2. Cloud-Based Web Application

A Cloud-based online attendance management system allows you to access it anywhere, making it convenient for the employees to check and apply for leaves and the managers to approve or reject the leave requests from anywhere at their convenient time. Cloud-based applications also solve the issue of software installations and updates.

3. Configurable Fields (Leave Type, Policy, Holiday List)

Every business is different, and with time, the policies may change too. A good leave management process is one that is flexible and customizable. The fields must be customizable as per the business’s policies. A leave management system that functions with policy – one size fits all, is not going to work.

4. All-in-one Dashboard

An easy-to-access all-in-one dashboard allows the employees to check their leave balance from where they can apply. There should be a page which also reveals the days off of their co-employees of the same department, so they have a better understanding of which day to plan their leave. The senior staff should be able to have access to the holiday list, workforce coverage, etc., so they evaluate the leave requests in a better way.

5. Seamless Integration

Outdated software creates several issues and doesn’t merge or integrate with your existing software for payroll, timesheet, etc. It helps in eliminating errors, saves time, and enables cross-functional reporting.

6. Easy Report Generation

It should comprise several easy features that allow the generation of reports in various formats and fields, allowing the business to have actionable insight on taking important decisions.

Outsource Your Business’s Leave Management System to an Efficient Service Provider

As one of the leading payroll service providers in the past 18 years, TopSource Worldwide has served more than 900 esteemed clients across North America, Europe, Australia and Asia. With a team of 250 skilled employees, we have been providing custom services to all our clients for the leave management system, payroll, statutory compliance, employee self-service and more. Having worked with a variety of industries and countries, we are  known to have one of the best online leave management systems in India and are proficient with handling different types of payrolls.

We always stay updated with the rules and regulations and keep you apprised of the compliance and best practices required by your business. Working in modern infrastructure with highly secure systems, we streamline and optimize your payroll management system, so you are relieved of the services you have outsourced us.

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Published On: January 20th, 2022Last Updated: March 10th, 2022

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About the Author: Sachin Disa

Sachin heads the India Payroll business unit and is responsible for global sales into India, India domestic sales and delivery, and local finance support in India. Sachin has over 17 years of experience with the company, his previous roles include head of UK payroll operations, head of accounting support services, head of sales in India and VP of finance.