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Learn the benefits of using a leave management system

A leave management system can benefit companies in various ways, including saving time for HR staff. Learn more, including the most important leave management system features.

A leave management system helps HR staff track employee leave and can benefit HR departments and employees in various ways. However, HR leaders must make sure their company's leave management system is configured correctly and includes some key features to ensure their organization reaps the maximum benefits from the software.

A leave management system can be standalone software or a module that integrates with an organization's human capital management system. It helps organizations remain compliant with leave laws.

Learn more about leave management systems and their benefits.

What is a leave management system?

A leave management system is an automated tool that enables HR practitioners to track and manage employee paid leave requests.

The paid leave requested by employees can include the following:

  • Sick days.
  • Medical leave.
  • Disability.
  • Bereavement days.
  • Vacations.

Many leave management systems are available in mobile form, which can make it easier for employees to submit leave requests.

3 of the most important leave management system features

HR leaders should confirm their leave management system includes some crucial features so their company can get the maximum value out of their software. Here are some of the most important.

1. Automated form delivery

One important leave management system feature is the automation of form selection for leave requests.

For example, if an employee reports that they are on emergency medical leave, an HR staff member can select that option in the software and the leave management system automatically generates all needed forms. This ensures that HR staff members don't forget certain forms and eliminates the need for HR to gather the necessary paperwork manually.

Headshot of James Lieck, Dimensions implementation manager at HRchitect.James Lieck

A leave management system can also select the proper forms based on an employee's location, said James Lieck, Dimensions implementation manager at HRchitect, an HCM systems consulting firm located in Frisco, Texas. For example, a Wisconsin-based employee will receive forms that reflect the labor laws of that state.

However, companies should choose a leave management system that was created for their particular country, Lieck said. Some leave management systems are U.S.-centric and aren't necessarily compliant with, for example, Canadian leave laws. The software buying team must look into this themselves rather than relying on vendors' promises.

"Sometimes they will tell you, 'Yes, it [does work for that area],' but in reality, there are some shortcomings," he said.

2. Reporting and analytics

Leave management systems' reporting and analytics capabilities are crucial because they make it easier for HR staff to report on certain metrics. These metrics include the following:

  • The amount of leave employees are taking.
  • Trends in employees' leave.
  • Certain employees' leave -- for example, analyzing the amount of leave taken by one department.
Headshot of Eric St-Jean, independent consultant and TechTarget contributor.Eric St-Jean

Leave management systems can help identify employees who are abusing a company's leave policies, said Eric St-Jean, an HR technology consultant at CleaHRStrat Consulting, an HR consulting company located in Ottawa. For example, if a manager notices that an employee is consistently "sick" on Monday morning, they can use the data from the leave management system to back up their argument that the employee needs to be disciplined.

3. Automatic notifications

Leave management systems can automatically send out messages to employees.

For example, the system can email or text an employee who has been on medical leave and is due back at work in a week, Lieck said. The message can include directions on how to submit the necessary documentation to extend their leave if needed.

3 benefits of using a leave management system

A leave management system can help companies and their HR departments in various ways. Here are a few.

1. Helps organizations stay compliant

One of the biggest benefits of a leave management system is that it helps HR staff ensure their organization is complying with paid leave laws.

"Compliance is almost always [the] number one [benefit of using a leave management system]," Lieck said.

Since a leave management system is configured based on employees' region or regions, the system automatically examines compliance with applicable laws.

2. Saves time for HR and employees

A leave management system saves HR staff time because employees don't have to reach out to staff with questions such as an employee's remaining amount of vacation days and sick days.

"It's all right there in your employee portal," Lieck said.

A leave management system can also improve employee experience, since employees can easily access this information.

In addition, leave management systems make the leave request process more efficient. For example, if an employee schedules a surgery, they can enter a request for leave through their employee portal. HR staff receive a request notification and can then send the employee the necessary forms within the same system.

"It reduces the [need to chase] people around for forms," Lieck said.

3. Simplifies leave tracking

Leave management systems can also help simplify the process of tracking the amount of employee leave.

For example, if an organization offers its employees five sick days per year, an HR staff member enters that information into the employee's profile and the system calculates that individual's balance based on the number of sick days they have taken during that period.

HR doesn't have to manually track each employee's leave.

What to consider when implementing a leave management system

As with any software implementation, implementing a leave management system requires careful preparation to avoid extra costs or problems down the road.

Before embarking on a deployment, HR leaders should work with their staff to confirm that the company's leave policies are up to date.

If the company plans to change any leave policy soon, HR leaders should implement the change prior to integrating a new leave management system, St-Jean said.

HR leaders must also work with others to examine how well the new software will work with the organization's existing technology.

"Make sure during the sales process that you really understand the integration between [the] leave [management system] and your other software modules," Lieck said. "It's crucial to ensure that you're getting the full benefit of that leave software that you've selected."

Headshot of Kyler Cheatham, global marketing director at Third Stage Consulting Group.Kyler Cheatham

Some software enables users to customize their leave management system, which can be helpful.

However, companies should avoid getting carried away with this, said Kyler Cheatham, global marketing director at Third Stage Consulting Group, a business and technology advisory firm located in Denver.

"Stick to your plan as opposed to getting enchanted by all of these additional exceptions or customizations that you can make, because that's only going to create a complex web," Cheatham said. "You need to stick to a standardized process as much as possible."

Headshot of Amanda Patton, director of ERP strategy and transformation at Third Stage ConsultingAmanda Patton

The software buying team should also consider what their company needs from a leave management system now rather than getting excited by potential add-ons.

"It's cool knowing [the add-ons are] there for future growth and being able to scale, but is that really what we need right now?" said Amanda Patton, director of ERP strategy and transformation at Third Stage Consulting. "Don't over-engineer, because it gets complicated to keep all of that up to date."

Carolyn Heinze is a Paris-based freelance writer. She covers several technology and business areas, including HR software and sustainability.

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