Why Does Your Business Need an Automated Leave Management System?

When you look at it, leave management is quite a simple term. It is just about tracking the leaves taken by the employees. This is definitely an easy task when you’ve got only a handful of employees. The same job can be a source of headaches for human resource management in companies with a significant number of employees.

Leave management is important for the organization because it can impact the bottom line. Employees are often curious about the leave policies at their organization and want to clearly understand them while going through their onboarding. This is where a leave management system helps you. The software seamlessly implements various complex leave policies at your company and makes them easy to understand.

The conventional leave management system involving the use of classic pen and paper or an Excel sheet is not reliable. Many companies have gone through heavy damage control measures to cover up the error-prone system. A single mistake here can cause the firm to lose the employee’s trust, make payroll mistakes, and sometimes even invite legal trouble.

How does the traditional leave management system work?

In the traditional leave management system, if an employee wants to apply for leave, they first need to check their leave balance with the human resource personnel or on an Excel sheet, which is typically a view only. Then they send requests to their manager via email and might need to remind the manager several times to check their leave application.

When a manager sees a leave application, they go through their work schedule and the availability of the workforce, so they can accordingly make a decision about whether to approve or disapprove the request. Typically, HR is part of all the email exchanges too, so they can watch and then update the leave balance and attendance on the Excel sheet accordingly.

What are the disadvantages of manual leave management?

  • This process is lengthy; a single approval takes days.
  • There is more possibility of errors.
  • Many employees may face unfairness due to favouritism.
  • In companies with multiple and complex leave policies, people find it difficult to understand.
  • Often employees underutilize their leaves due to complex leave structures.
  • Mistakes in leave management cause errors in payroll, which are unpleasant to everyone involved.
  • Employees take time to understand leave policies from HR, to reduce chances of rejection. They put their requests late and managers face difficulty in getting the necessary workforce.
  • In organisations with larger teams and huge staffs, human resource management has to dedicate a lot of time to leave management.
  • There is less time at their hand along with the need to spend extra time rectifying the mistakes as human errors are bound to occur now and then in keeping all the leave records manually.

In this blog, we will discuss the benefits that an automated leave management system brings to the business.

Better Utilization of Time

As mentioned above, the simple task of leave management can be a huge burden if done manually for a large staff. Every month, it takes around seven hours or more for HR personnel to mark and calculate leaves for employees. This time can be saved with online leave management software. HR does not have to spend time answering questions about leave and related policies. The software also updates the leave balance automatically.

Eliminate Manual Work

Doing the entries manually to update the employee leave balance every time is likely to have some errors. The mistakes that cause unfair depreciation to the leaves for the employees lead to resentment and extra time to rectify the mistakes. The balance of paid days may go back to what it is supposed to be, but it is not easy to regain the employee’s trust.

An automated leave management system, auto-updates the leave balance and also provides the correct data for the payroll. Since there is no manual intervention, companies get data that is free of human errors. Both managers and employees get correct, updated information with no need for manual data entry.

Since the process is fully automated, it makes sure that no one gets a chance to mishandle the records. When leave management relies on emails or manual datasheets, it becomes easy for employees to manipulate the data. This ensures that the records are always correctly updated and maintains uniformity throughout the system.

Real-time data

With an automated employee leave management system, it is easy to check the leave balance and apply for the leave with a few clicks. Employees no longer need to send multiple emails for approval or consult the human resource department about the type of leave balance every time they need to apply for leave.

The streamlining of the leave management process also benefits the managers, as they can see the real-time data for the available leaves for the employees. The system also gives comprehensive data about the workforce available at the time the leave is requested. This makes sure that the time off by staff does not tamper the work and the projects in process, giving the company the efficiency necessary for leave management.

Legal Compliance

Organizations are legally bound to give employees their deserved time off and can add to it some more if they feel like doing so. Now we work with the global workforce, and teams are often scattered across multiple nations. Being compliant with regulations in one place is still easy, but it can be cumbersome when a firm needs to stay compliant with different policies.

Irrespective of where the business headquarters are, organizations need to follow the local labour laws. This is not just an issue for companies that have their operations in multiple nations, but also for firms that operate in multiple states, where laws typically vary from state to state. The leave management system makes sure that all the regulations are being followed while processing the leaves.

Saves Cost

If not managed properly, leave and absence can have a significant impact on payroll expenditures. This might result in exorbitant costs for huge organizations. Automating employee leave management can help you save a lot of money because every leave can be monitored and accounted for.

The leave management software can help to reduce absenteeism while also ensuring that necessary staff are present at work to maintain productivity. The system also helps to save more productive time for the HR team, which can be utilised for strategic things like employee engagement and performance management.

Streamlines the Approval Process

The leave approval process is often a lengthy one, involving interaction with multiple people such as HR, team managers, second managers, and so on. In many organizations, the team leader and the one who is supposed to take action on the leave request are different. As a result, this typically leads to complications and a string of emails.

The leave management software allows you to set the approval flow and the system will automatically follow that. Employees no longer need to use multiple emails, and can instead apply for leave with a few clicks. The concerned managers get the notification regarding the same and check the data to take the appropriate action. Employees also get notified about the action that managers have taken on their requests.

The system eliminates the need to personally check on the status of their leave application with their manager. Multiple face-to-face interactions can be awkward and often lead to employees underutilizing their off-time, which may lead to stress, and negatively affects productivity. While automation makes the process smooth and hustle-free for everyone.

Leave analytics

It is observed that the average cost of leaves taken by employees is about thirty per cent of their salary. The automated leave management system tracks the data accurately. The data helps to draw valuable insights.

Another observation says that employees that take unplanned time off frequently are usually on their way to leaving the organization. The leave analytics also make it easy to compile reports with the necessary elements much quicker, giving better efficiency in less time.

The leave data is essential for the employer to identify trends and gauge employee productivity. A significant portion of the payroll goes to paid time off, and leave data can be very insightful for upper management. With the traditional methods, leave data is either not maintained at all or is heavy with errors, depriving the organization of very essential information.


With an automated leave management system, it is not possible for someone to tamper with the data. The employees get access to their leaves and related information but do not get to make changes. The system also helps to avoid instances where managers can play favourites. Employees get their well-deserved vacations and are treated equally.


Leave management sounds like a simple process when there are only a handful of employees. Companies with a large staff cannot rely on manual record-keeping or Excel spreadsheets. These methods eat up a lot of productive time, are prone to errors, are easy to tamper with, and sometimes involve malpractices. The automated leave management system, on the other hand, makes the process streamlined, quick, and much more effective. It is easy to apply and take action on leave requests, irrespective of complicated leave policies or the number of employees. There is more transparency, security of data, and valuable insights for organizations. The leave management system saves you money, keeps you compliant and delivers better performance.

Author Bio

Shital Jogalekar has been a content writer at Sage Software Solutions Pvt. Ltd. for the past 6 months. She writes HR-focused blogs for Pocket HRMS, one of the best HR solutions in India. She holds more than 2 years of experience in content writing. You can connect with her through her LinkedIn profile.