Taking time off is good for employees; it prevents burnout and increases job satisfaction. Leave management, however, can be a headache for overworked HR teams. As your team grows, the manual work it takes to track employee leave can become overwhelming. Poor absence management can lead to mistakes and cause operational disruptions, including understaffed shifts or costly legal problems. To make sure employees get time to recharge and managers don’t lose their minds, many businesses rely on a leave management system.
We’ll outline everything related to leave management systems, such as what they do and how they can benefit you. Set your team up for success and see how you can save your managers, HR team, and employees can all benefit from using leave management software.
What is Leave Management Software?
What exactly is leave management system? This software takes care of all time off needs, from managing PTO requests to handling employee’s bereavement or parental leave. The main goal of a leave management software is to ensure there are no surprises down the road. This will not only save valuable man-hours wasted on inefficient systems, but also help your company ensure compliance with paid time off (PTO) and overtime laws.
Leave management systems are useful for all businesses, but they are especially key for hospitality and retail businesses, where an understaffed shift can have a serious impact.
3 Signs You Need an Online Leave Management Software
If you are wondering if you can afford to invest in an online leave management system, we have a question for you: can you afford not to? Here are 3 signs that you are more than ready to take the plunge:
1. You feel like the business concierge.
HR managers have a lot to do, and fielding time off requests is a heavy burden. Ensuring requests comply with company policy, running them past the appropriate supervisors, and then balancing the schedule again to make sure there’s adequate coverage can take a long time! If you crave time to concentrate on the bigger picture, it may be time for a change.
2. Shifts go uncovered.
If you are managing leave manually, there may be mistakes and miscommunications which lead to missed shifts. This will stress and stretch employees who need to cover an understaffed shift. Even worse, customers notice. In restaurant and retail, businesses depend on repeat customers. This means one bad customer experience can lead to future losses. If you want to minimize human error and keep your business running smoothly, it’s time to consider software.
3. You’re using excel for any aspect of human capital management.
If you are using spreadsheets to track employee hours, PTO accrual, or absences, you are opening your business up to legal liability. Be better than excel! Your employees are valuable, so provide them with the professionalism and transparency they deserve. If you’re stuck doing it the old-fashioned way, leave management software can help you modernize your system.
Top 6 Things Leave Management Software Can Do For You
Leave management software can clean up your books and keep employees and supervisors happy. Here are the big benefits:
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Eliminate Paperwork:
Go green! In addition to reducing unnecessary and clutter, getting rid of paperwork is good for the environment. Bonus: With an online leave management system, there will be no more lost or mislaid request forms. Everything will be in one (digital) place.
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Reduce the Effect of Human Error:
Automation means no more scheduling errors. Online requests which can be accepted or rejected mean no more miscommunications. Meanwhile, schedule visualization tools will prevent understaffed shifts.
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Improve Communication:
Stop fielding requests on the fly! If employees are currently making leave requests by email, post-it, verbal, and courier pigeon, software will streamline and centralize the process.
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Increase Transparency:
With the right software, both management and employees can review attendance and time-off data at any time. With the information that is always up to date and available, employees can relax and trust the data.
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Equal Enforcement:
Does your staff try to bribe you with pie and compliments to get their vacation requests approved? A leave management system ensures each request is treated fairly and is in compliance with company policy.
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Software to Track Vacation and Sick Time:
Track PTO and vacations efficiently to ensure your business is in compliance with regulations.
Key Features of Leave Management Software
By now, you probably agree: it’s time to invest in leave software. Here are 8 key leave management system features to look for as you shop around:
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Automated Absence Requests
When employees need time off, they can send absence requests to managers ahead of time. Managers will be able to review the request on their own time and approve or reject the request digitally. Further, automation prevents miscommunications and limits last-second alterations and changes.
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Team Calendar Overview with Leave of Absence Tracker
Managers can take a bird’s eye view of the schedule with team calendar overview capabilities. These will allow supervisors to see who is on the schedule and easily pinpoint holes. This means that the floor will never be understaffed again! Additional bonus: Employees looking to swap shifts now have full visibility into their team’s time off. They can easily check their team calendar with an online leave management system.
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Easy Holiday Policy Input
A good leave management system will allow HR managers to create different categories of leave, such as sick leave, annual time off, or general holiday. Employees can choose from these categories when making a request. This is an efficient way to make sure employee absence requests adhere to company policy– even before they are made.
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PTO Management Limits Liability
In order to adhere to paid time off accrual and overtime regulations, it is important that businesses track time off closely. An employee leave management system will limit legal liability and ease managers’ minds. In turn, making sure your team enjoys their time off and your business remains compliant.
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Generate Custom Reports with an Employee Monitoring System
Data is the backbone of an efficient company. Using time off software will allow supervisors unprecedented insight into habits and trends of employee time off requests. With this information, managers will be better equipped to make strategic decisions for their business.
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Integration with Other Tech
Employees should be able to access their schedules through the tools they regularly use, such as Google calendar and Slack. This increases team visibility and ensures alignment between other teams. A great leave management system will centralize all time off related information to give you an snapshot overview to keep you in the loop.
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Mobile App with Attendance Monitoring System for Employees
For increased accessibility, choose leave management software that has a mobile app. Employees will be able to make their requests on the go, and employers will be able to approve them just as quickly. It’s quick, easy, and efficient for from both sides.
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A Free Trial Before You Commit
It’s a bad idea to sign up for a system before you know how it is going to work for you. Make sure to take advantage of leave management system free trials. Once you know it’s the right fit, you can commit!
How to Calculate the Benefits of Leave Management System
When evaluating the ROI of a leave of absence software, we must consider both tangible and intangible benefits.
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Tangible ROI
This is a traditional form of return. You invest X to receive Y. For example, automation will reduce the number of hours the HR team spends processing time off requests. If an HR professional currently spends 10 hours a week managing time off, software may help to bring that number down to 2. This saves 8 hours of labor. If that employee makes $45/hour, 8 hours is worth $360. Saving $360 a week translates to $1440 per month, or $17,280 a year. That’s a lot of money– but it’s not the ROI.
We still need to subtract the cost of the leave management software. Factorial (which has many capabilities beyond leave management) costs $3 per month per employee. That means a company of 100 can expect to pay $300 per month or $3600 a year. We subtract this cost from the money saved: $17,289 – $3,600. The net return is $13,689 per year. We divide the net return by the cost of the investment and multiply by 100: (13,689 ÷ 3600) x 100. This is a 380% ROI. Not bad!
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Intangible ROI
This is not as easily measured. Intangible ROI refers to things that don’t have a concrete numerical value, such as employee satisfaction and long-term company success. For example, say employees love the ease and transparency of the new system. They get to spend less time haggling over their vacation and more time enjoying it! This helps improve employee satisfaction, which in turn improves employee workplace productivity and retention. Employers will certainly save money in the long run by holding on to talented and knowledgeable employees. They’ll also save the costs associated with vacant positions, and hiring and training new employers. However, it is difficult to put an exact price on employee satisfaction.
Calculate ROI: Essential Metrics of Leave Management Software
There are several ways that leave management software helps businesses succeed in tangible and intangible ways.
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Time Saved Through Automation
With leave software, employees can send time off requests to their supervisors electronically. They can select the type of leave from categories (sick days, personal days, bereavement leave) pre-designated by management. Managers can review all relevant requests on their own time and accept or decline the request as necessary. Keeping everything in one place means no requests get lost in someone’s desk or cluttered inbox. Requests that need approval from multiple supervisors will automatically be sent to the appropriate parties. This automation keeps time off requests organized, saving valuable time, and reducing opportunities for human error. Time is money! Simply streamlining requests gives the HR team an opportunity to address more pressing issues.
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Boosted Employee Morale and Retention
Good leave management software will have portals where employees can review schedule updates and check on their time off requests. This kind of accessibility and transparency will lead to increased employee engagement and long-term success. Happier employees are more productive and more likely to stick around to contribute their knowledge and expertise to the business. The attrition rate reduction is a major goal of every company. By limiting turnover, a business can avoid costly hiring processes and lapses in productivity that accompany vacant positions.
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Reduced Liability Through Increased Compliance
Certain states require employers to track Paid Time Off (PTO) accrual. Businesses will also need to track time off to stay in accordance with Family and Medical Leave Act (FMLA) laws regulated unpaid time off. Failure to correctly track time off whether it is paid or unpaid can lead to big costs down the road. If a business fails to provide government-regulated time off or overtime pay, they may be hit with legal penalties or even costly lawsuits! Time off trackers can offer the protection and peace-of-mind businesses need.
Measure ROI of Leave Management Software
We have already explored how automated requests could generate a huge ROI. Let’s explore some other ways that leave management can increase productivity and profitability.
The Cost of Absenteeism
Through the reduction of errors, efficient leave management software can prevent missed shifts and holes in the schedule. For example, an employee working in a bookstore makes a verbal time off request. Her manager agrees to think about it but never gets back to her. The employee assumes the request has been approved and is two states away when her shift starts on Friday. The manager has to reshuffle the other 5 employees so that someone is covering the register. This takes them off their usual tasks of unpacking boxes from distributors, helping customers, and organizing shelves. All of this together reduces the number of books sold.
How many times a month does this bookstore have understaffed shifts due to a faulty leave management system? This month, it happened 3 times. Let’s say that every missed shift costs the bookstore $300 in missed sales. That means that the bookstore lost $900 to absenteeism this month. That’s $10,800 a year!
If leave management software can avoid these instances of absenteeism, it will in effect make the business $10,800 a year. To determine ROI, we subtract the cost of the software. Assuming the bookstore has 24 employees, Factorial would cost $72 per month, or $864 a year.
Net profit: $10,800 – $864 = $9936
ROI: (9,936 ÷ 864) x 100 = 1150%
It’s important to remember that leave management software will save businesses time and money in a variety of ways. It will reduce absenteeism in addition to saving hours of manpower. Investing in good software will ultimately lead to higher profit cost-effectiveness.
Leave Management Software FAQs
What is a leave management system?
Leave management software automates, manages, and centralizes all time off related information or requests. This includes short-term time off such as vacation requests and sick leave, and longer term time off requests including parental leave and sabbaticals.
What is exit management system?
Exit management system is the automation of offboarding an employee when they are leaving your company. This transition includes the collection of a formal resignation letter, revoking security access to digital tools, and conducting an exit interview. With an exit management system this process is an expedited and cost-effective transition for both the employee leaving and the company.
Is leave management the same as absence management?
Although the terms leave management and absence management software are often used interchangeably, there are some slight differences. Absence management software typically focuses on general absences that could potentially impact your team negatively. While leave management refers to time-off requests and managing the coordination of your team’s time off.
What is the HR leave process?
The HR leave process involves a set of procedures for handling leave requests, including PTO, sick time, and other types of time off. This includes the company’s approval process, how to track time off spent and update leave balances, as well as general leave policies.
How to create leave management system?
Creating a leave management system involves the following main steps:
- Defining your company’s leave policies
- Implementing your policies
- Managing and monitoring employee time off
Ensure your team is up-to-date with your company’s current HR processes and how to manage employee time off properly. With the assistance of technology, your leave policies will be easy to implement and tracking employee leave will be easier than ever.
Best Leave Management Software for You
When you shop around for leave management software, you might be overwhelmed by the choices. It is important to look for leave management software with capabilities that will work for you and your company. Make sure to find software with automated requests, an employee portal, and a free trial. Investing in leave management software now will lead to savings down the line.
That’s why Factorial will be a great fit for any company looking to automate their leave management. With Factorial’s platform, you can approve time off requests in just a few clicks. Saving you time and your team time spent on formalities and filling out paperwork manually. Factorial’s user-friendly interface makes it easy for both managers and employees alike to use it. As a manager, you can view your team’s leave requests, manage employee time off, and see leave balances all in one centralized location. As for employees, they can refer to their company’s leave policies, review their time spent on vacation, and request time off from a single platform.
Additionally, Factorial’s all-in-one business management software can help you beyond your leave management needs. With it’s sleek design, you can automate:
- Recruitment: Attracting and finding the best candidate to fill your critical roles.
- Onboarding: Start your newcomers off on the right foot with a warm welcome.
- Time Tracking: Let your employees clock-in/out from anywhere, at the click of a button straight from their phone.
- Project Management: Monitor your projects and their associated expenses.
- Payroll: Sync your employee hours to payroll to ensure accurate payslips.
Get a free trial to see Factorial in action! Transform how you run your business today.
