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Leave Management: What Is It and How It Works

Let's explore the importance of an effective employee leave management policy, and how it can be easier to achieve than you think.
Published 8 Oct 2021
5 min read
Leave Management: What Is It and How It Works

We often hear a lot about HR departments being under the pump, with a lot of spinning plates at all times. So why add yet another task to the list? Employee leave management seems like another “to-do” that has no real benefit or necessity, but in fact, it is one of the keys to a successful business and happy employees.

Your employees need to recharge and give time to their lives outside of work. Work-life balance makes a happy team and a well-run business, so you need to encourage employees to request leave every now and then.

Let’s explore the importance of an effective employee leave management policy, and how it can be easier to achieve than you think.

What is HR leave management?

Employee leave management is the processes and policies designed for your business to effectively handle requests for staff leave, inclusive of vacation, holidays, sick leave, and parental leave.

A successful employee leave management system will provide a fair and accurate way to manage these requests to ensure that both the employee and the company are taken care of. Employees are entitled to these benefits, so leave management is more of a must-have to ensure your facilitation of them is as efficient as possible.

The HR department managers are responsible for the facilitation of time-off requests for both staff and management leave, inclusive of when to approve leave or deny. A clear leave management process makes the job easier, while ensuring both business and staff needs are catered for.

Leave management process best practices

The best employee leave processes start by taking into account local, state, and federal labour laws. It is no surprise that your policies must comply with the law, but this can also help to provide a framework for where to begin.

Ensure policies are applied consistently to avoid discrimination of employees, and allow enough room-to-move to take into account personal circumstances, as these will always vary. There needs to be a balance here as there is a thin line between being considerate, and legally fair across the board for all managers and staff.

Ensure your policies are written clearly, so all employees understand what to expect, and include:

  • Clear outlines for leave policies
  • A detail of the different types of leave
  • The holidays that will be observed
  • How time is accrued/what to do with unused leave
  • The procedure for requesting time off
  • The types of employee leave offered

Take into account your company benefits package and communicate your policies clearly via an employee manual. You want to ensure that staff are aware of their rights and benefits and can refer back to a document that clarifies your processes and procedures if need be.

Employee leave, and proper leave management are vital elements to ensuring your business is successful, and your team works to their optimal capacity.

Proper leave management is important as it:

  • Increases satisfaction and retention levels
  • Allows for consistency across the business for annual leave, sick leave, etc.
  • Ensures compliance in leave policies
  • Reduces HR errors
  • Increases productivity and efficiency

Paid leave is an important benefit for staff and has a direct correlation with attracting and retaining talent. A quality time-off management process allows for consistency and fairness across the business, resulting in HR efficiency due to fewer errors in communication or documentation. Management also see benefits as they can effectively plan workloads around leave.

The best leave management software

Employment Hero makes leave management easy. Staff can see their leave balances and submit leave requests electronically, automatically notifying management who can view an individual’s leave balance as well as a team leave calendar. Everyone has transparency into their team’s movements.

Employment Hero offers the following elements to make leave management a lot simpler:

  • Custom fields which let you record the information that you need about your employees from a favourite coffee to which car spot they’ve been allocated
  • Organisational charts to form a staff directory so everyone can stay in touch
  • Hero Passport which allows past employees to access important documents such as payslips and payment summaries automatically
  • Company Announcements which allow you to post an update to every employee
  • The Company Feed a social network style feed that allows you to share important information including PDFs, documents, videos and more with employees and managers
  • Assets Register which keeps track of all laptops, iPads, mobiles cars and furniture
  • Tasks, a section that makes accountability and transparency easy to help promote collaboration and productivity


Why leave management is important

The benefits of leave management are clear, but to help illustrate why it is so important to have good leave policies, let’s consider some scenarios that you’ll want to avoid, but probably won’t without good leave management practices in place.

Leave management without a proper leave management system can result in:

  • Being understaffed
    • Why is half of your team missing on the day you need to hit that deadline? A proper leave management process allows you to work leave in with project deadlines so you’ll always have enough staff to cover the workload.
  • Incorrect understanding of time-off requests
    • You are asking for trouble if you approve an annual leave request without the proper visibility or other requests, both approved and pending. It’s easy to say yes to people when they ask, but this can come back to bite you later when you realise you forgot about your other approvals.
  • Evaluating same-day requests
    • How do you fairly compare identical time-off requests? You can only let one employee off that day, and without access to information about their leave history, you might refuse a valid time-off request and risk creating a bigger issue.
  • Incorrect calculation of leave

How do you manage employee leave?

One sure easy way to effectively manage employee leave is with Employment Hero software. From the clear display of leave balances and the easy submission and management of leave requests, you can electronically handle every process step from both a desktop and mobile app.

Leave Management

All managers and HR staff can automatically be notified of employee requests, and simpler decisions are made when you can view an employee’s leave balance and team leave calendar before approving.

Employment Hero gives everyone more transparency of their entitlements and more insight into the team’s movements so you can schedule leave to benefit all involved. If you would like to learn more about Employment Hero and how it can help automate the leave management process at your business, book a demo with us today!

Annabel Thompson
Customer Marketing Executive Manager - Employment Hero
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