Best leave management software: what should SMEs look for?
Three holiday requests by email, a spreadsheet with leave balances and a team lead who has no idea who is around in August: that is still how many small businesses plan time off. The best leave management software for an SME calculates leave balances automatically, lets employees request time off in an app and shows team leads in one calendar who is away and when. You save the most time when leave management is part of your HR software, so leave, sickness and hours worked all line up. Below you’ll find which features matter, which types of tools exist and how to choose the right one for a company with 10 to 500 employees.
What is leave management software?
Leave management software is a system in which employees request leave digitally, team leads approve requests and HR manages all entitlements and balances in one place. Instead of forms, emails and spreadsheets there is one fixed flow: request, check, approval and an automatically updated balance. Good tools handle more than annual leave, such as parental leave, training days or sick leave through absence management.
How do you recognise good leave management software?
Good leave management software takes calculations and questions off your plate instead of creating new ones. Check these features when you compare tools:
- Leave requests in an app or browser, approved by the team lead in one click
- Automatic calculation of leave balances, including for people who join or leave mid-year
- An up-to-date balance for employees, team leads and HR
- Custom leave types, such as parental leave, training days or time off in lieu
- A team or leave calendar that shows overlaps straight away
- Reports on leave and absence per team or period
- GDPR-compliant storage and clear access rights
Calculating leave balances correctly
Calculating leave balances is where spreadsheets fail most often. Part-time staff, people joining or leaving during the year and carried-over days make every spreadsheet error-prone. Statutory leave rules differ from country to country, so always check the official government guidance for the country your employees work in.
An overview for team leads
A shared calendar stops half the team from going on holiday at the same time. When approving a request, the team lead immediately sees who is already away in that period and can plan around it.
What types of leave management software are there?
There are three types of leave management software: HR software with built-in absence management, standalone leave planners and leave modules inside time tracking or scheduling tools. Which type fits best depends on how many other HR tasks you want to handle digitally.
Well-known HR software vendors include Personio, Factorial, HiBob, BambooHR and HoorayHR. Features, plans and prices change regularly, so always compare the current offer directly with each vendor.
Leave management software compared: three types of solutions
| Type | Fits | Strength | What to check |
|---|---|---|---|
| HR software with absence management | SMEs that want HR in one place | Leave, sickness, personnel files and hours in one system | Whether it is easy enough for every employee to use |
| Standalone leave planner | Small teams with simple rules | Quick to set up | Sickness and employee data stay in other systems |
| Leave module in time tracking or scheduling | Businesses with shifts or changing rosters | Leave visible directly in the schedule | How well balances and leave types are supported |
What are the pros and cons of leave management software?
Leave management software mainly saves HR and team leads calculations and back-and-forth, but it does need clean data to start with.
Pros of leave management software
- Leave balances are always up to date, without recalculating
- Requests and approvals are recorded and easy to trace
- Employees see their own balance, so HR gets fewer questions
- Team leads spot busy periods before they become a staffing problem
Cons of leave management software
- You need to transfer existing balances correctly once at the start
- Special arrangements from employment contracts need to be set up properly
- A standalone leave planner without links to other HR data means duplicate work
How to choose the best leave management software
You choose the best leave management software by writing down your leave rules and process first, then testing your shortlist in day-to-day work.
- Step 1: List every leave rule that applies, including extra days agreed in contracts
- Step 2: Decide who approves leave and who decides when the team lead is away
- Step 3: Decide whether sick leave and hours worked should live in the same system
- Step 4: Test a leave request from the point of view of both employee and team lead
- Step 5: Transfer current balances and check them once against your old spreadsheet
An example: an agency with 25 employees, six of them part-time and two who started in May. In a spreadsheet, HR calculates each balance separately and matches it against requests in the inbox. In leave management software, HR enters the start date and working pattern once, and the system calculates the balance itself. When a colleague submits a request, she sees her new balance immediately, and the team lead can see in the calendar whether it overlaps with anyone else’s leave. If you are moving away from spreadsheets, read our blog on HR administration in Excel.
Leave management with HoorayHR: simple for employees and HR
HoorayHR is all-in-one HR software for SMEs that lets you manage leave, sickness and other absences in one place. Employees request leave in the app or browser, per hour, per day or across several days, and see right away how much balance they have left. Team leads approve with one click.
We calculate leave balances automatically, and you create the leave types that fit your organisation. The company calendar shows who is away and syncs with Google Calendar or Outlook. Because leave is connected to our time tracking and personnel files, you only maintain employee data once.
Leave management software pays off well before your team gets large. As soon as leave requests arrive in several inboxes and someone has to recalculate balances, a digital tool gives you back time and overview.
What is the best leave management software for SMEs?
For most SMEs, the best leave management software is part of HR software with absence management. That way leave, sickness and hours worked line up, and you maintain employee data only once. Look for an easy app, automatic balances and a team calendar.
Can employees request leave on their phone?
Yes, with leave management software employees request leave in an app, follow the status of their request and see their balance. Team leads can approve requests on mobile too.
Does leave management software calculate leave balances automatically?
Good tools calculate balances automatically based on working pattern, start date and the leave types you set up. When comparing, check how part-time work, mid-year starters and leavers, and carried-over days are handled.
Can leave management software replace a spreadsheet?
Yes, leave management software fully replaces the leave spreadsheet. Unlike a spreadsheet, it always shows the current status, records every approval and lets you control who sees which data.
How much does leave management software cost?
Most vendors charge per employee per month, often as part of a wider HR package. Include setup time in your budget as well as the licence. Our blog on HR software costs explains how to compare offers fairly.
Written by
Ramon Glebbeek
Expert in HR
Ramon is a true expert in HR, thanks in part to his many years of experience at HoorayHR. With a passion for writing relevant blog posts and knowledge articles about HR, onboarding, performance management, and more, he offers a unique perspective on challenges and opportunities in the field. As an experienced human resources professional and content writer, Ramon is happy to share tips to help you save time on HR tasks and build a Great Place to Work.
