Leave Management system: A Complete Guide for Businesses

Leave Management is a process of managing time-off requests of your business such as sick leaves, holidays, vacation, emergencies, and parental leaves through a series of rules, guidelines, and policies that are business-specific.

Managing all the aspects of the leave management system and
handling everything fairly and accurately is crucial for any business. It
ensures that employees receive the benefits they are entitled to and helps in
the smooth flow of business processes.

The key activities of the Leave Management System include:

  • Maintaining employee satisfaction.
  • Ensuring Legal compliance.
  • Verifying adherence to business policies.
  • Manipulating staffing requirements to keep your business

Employees need a fair share of time off to rest and recuperate
to rejuvenate themselves away from the constant work-flow. Overburden of work
results in an unproductive employee. Therefore, organizations need to come up
with a good leave management system.

The responsibility of handling employee leave requests is
carried by HR staff, supervisors and workforce management staff of an organization.

The Key Features of a Leave Management System 

A Leave Management System (LMS), helps to automate the leave
request process and makes the entire process hassle-free for both employees and
the management. The solutions chosen by the organization should be strong
enough to easily handle all stages of the management process from application,
managing leave balance, filling leaves, approval/rejection to analysis. 

Important features of a good leave management system are as follows:

* Configurable Fields (Holiday list, Leave type, Policy)

The policies and procedures of each organization are unique and
vary from one another. A rigorous leave management system doesn’t work well
with organizations and companies should always look for products that can be
customized by their staff and suit organizational policies.


With an All-in-one dashboard, employees can check the holiday
list and co-worker’s day off before applying for leave for themselves from
their portal and can also view their leave balance.

 On the other hand, HR staff and supervisors will also have
access to department schedule, employee leaves balance and workforce coverage
and enables them to evaluate leave requests in a better way.

 * Auto-update Leave Balance

If the HR staff need to track, compute and update the leave
requests and balance of employees manually, then it is useless to purchase
leave management software for the company. 

The attendance management system of an organization should be
automated and should track the leave history of all employees displaying it to
both employees and managers.

 * Customizable workflow Approval

one of the critical features of a leave management system is
being able to customize workflows to set up a department-wise hierarchy
ensuring a streamlined process.

Once the department is selected by the employee, the predefined
workflow must auto-populate making the whole process simple and easy.

 * Cloud-Based web App

With a cloud-based online leave management system, businesses
can operate through multiple channels and have instant access along with
hassle-free software installations and updates.

With a cloud-based web app, employees leave requests can be
approved or rejected anytime from anywhere. There are various HR softwares
available in the market that provide services to work as an online web-app.

 * At a Glance Reporting 

Companies leave management system should include a built-in
reporting module to create interactive reports based on the acquired data.

Organizations will be able to easily analyze patterns and
acquire insights to take actions with company-wide and employee-wise reports.

Benefits of a Leave Management System for Business 

A leave Management system is an all-in-one platform for any company
to handle employee leave requests while ensuring the proper flow of business
operations. It improves the organization-wide leave structure and improves HR
work efficiency.

Some of the benefits of a leave Management system are:
  •  Elimination of paperwork.
  •  Highly increases employee
  •  Removes manual
  •  Increased Productivity.
  •  Overall cost Reduction.
  •  Provides accurate
    information by removing payroll errors.
  •  Creates visibility of
    employee availability.
  •  Increases leave policy
  •  Transformation of classic
    HR Practices.
  •  Better planning and
  •  Ensures Legal Compliance.
  •  Offers Real-time
    visibility of Data.

Tips for an effective Leave Management system 

The following are a few tips to keep in mind before running a
successful Leave Management program:

 * Understand Your Business Goals and Strategies 

Before implementing a leave management program, or making an
existing program better having a proper understanding of your business goals
and strategies about time-off is important. You can formulate strategies at
business, corporate and functional levels after fixing the goals.

Create Guidelines for Leave policies 

Leave policy guidelines should consist of information such as:

Types of Leaves offered by your company(sick leave, emergency

  • The procedure for applying for leave.
  • Information on what happens if employees don’t use their leave
  • How the paid time off (PTO) is calculated.
  • Holidays observed by your business.

* Incorporate Leave options into standard operating Procedures

Once the leave policies are prepared by an organization, incorporating
them into standard operating procedures is the next step. This means publishing
guidelines in employees handbook for most businesses. You need to provide
access to leave program details in such a way that they can be viewed anytime
from anywhere.

* Communicate changes as soon as possible 

If any changes are made to the leave policies after implementing
them, make sure to communicate them to your employees as soon as possible. One
of the easiest ways to do this is by editing employees handbook and send them
an email to inform about the changes.

* Have Knowledge of the Law 

Being informed about the local and state federal laws of your area keeps you away from going against the rules, mandates or ordinances that apply particularly to your business. Consult an attorney who is well informed with business laws to ensure that your leave management system is 100 % legal.

* Be consistent 

You must remain consistent with all employees and policies you
put in place for your business. Companies need to be understanding and flexible
in cases of maternity leaves, emergency leaves and disability leaves
irrespective of designation and work history.

An efficient leave management system allows HR managers to make
the most suitable decisions for a specific problem. A company’s success relies
on employees and the Management need to ensure to keep them motivated.
Therefore, it is essential to implement a Leave management system to have a
positive impact on employees and their overall performance.


Businesses can transform their employee experiences by implementing the best employee leave management system. It helps to automate and simplify business administrative tasks. A customizable leave management system reduces the paperwork and time and efforts of HR staff and centralizes the whole process of employee leave management.


  • 12 March, 2021
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