Pros and cons of leave management systems in India

Employee Engagement has gained a lot of buzz in recent years. To that extent where many companies have dedicated departments and officers to make sure that employee engagement is on the rise. Along with employee satisfaction, it plays a vital role in determining the success of an organization. Although there is no universal formula that can work for everyone so most of these try a combination of initiatives and stick to those that work best for them. One of the ways management can ensure employees are consistently engaged is by encouraging them to take leaves to break the monotony.


While it may sound simple, there are many things that can go wrong with this. Manually tracking attendance and leaves of employees is undeniably one of the daunting and tedious tasks. Manual attendance tracking leads to delays and incorrect payroll and thus making employees unhappy and dissatisfied.

What is employee leave management system?

Leave management system is a platform to help employees to track used and available leaves and individual status, in just a few clicks. And also employee able to set multiple leave policies as per organization norms. These systems are able to effortlessly schedule and manage employee time. They enable HR to easily manage attendance for employees working in multiple time-zones, across multiple locations and shifts.

Benefits of having leave management system?

Ease of use:

Leave management systems make the process much easier to manage. You can be anywhere in the world with an Internet connection and get a clear overview of who is working and who is not at any given moment, without having to open any books or spreadsheets.  Also, most of the best employee management solutions are incredibly intuitive, meaning that they will alert the management immediately any time they are understaffed or overstaffed, in the case that any eventual shift scheduling errors were made in the process.

Simple Leave Policies:

Leave policies can be configured as per leave guidelines of the organisation. We have programmed everything in a step by step process which makes it very easy for HR managers to create these policies. The inbuilt flexibility empowers you to create policies as per employee grades and locations.

Leave Approval:

This is very important feature for employees as well managers. Managers know at a glance about the number of people who have taken leave for a given time. It helps them in deciding the approvals for new requests.If there is any rule violation, it is also highlighted.

Some services are on cloud which means employees can make a request even on a mobile if they are on the field, or at home. Managers also have the access on phone, ipads and other devices for approvals whenever they want. Leave ledger is automatically created which shows individuals a clear picture of the various leave types – opening leave balance, leave credits per month, leaves utilised and any arrear adjustments at a glance for any specified period.

Maintain accuracy:

Automating employee leave calculations eliminates errors and ensures that even the most complex leave rules are implemented with precision and ease. In addition, a complete view of workforce utilization helps organizations schedule more effectively and adjust staffing levels as conditions demand.

Disadvantages of leave management system

Security concerns:

Security is one of the biggest worries. Systems must be designed to prevent unauthorized access to sensitive and confidential data and also the unintended publication of such information. This typically required many “compartments” and many levels of authority for access, all of which have to be monitored and maintained.


Then there is the cost factor. Especially for smaller companies, this can pose a problem. With any system, there are acquisition costs and maintenance costs. SaaS (software as a service) systems are somewhat easier to handle from a cost standpoint since they are cloud-based and don’t require as much initial outlay. With larger installations, there’s probably the cost of hiring an IT specialist to manage the system.

How to select leave management service provider?

While choosing a leave management service provider, you must consider several factors to ensure you select a reliable payroll and leave management service provider for your unique business needs. You can take the following steps to choose a leave management service provider:

Consistent Delivery:

This goes without saying really, but there is nothing more valuable than a partner that can, and does, do what they say they can do. The best way to validate the company’s ability to deliver is by giving them several short four to eight week engagements and see how they handle them. Do they do what they claim? Does it go smoothly? Look for how consistent the delivery is over a few projects. If they are consistent, then they probably have quality and precision embedded in their work culture.

IT infrastructure and certifications:

Once again, this is applicable for large outsourcing relationships where the use of best-in-class IT infrastructure and data security is imperative. Companies with employees with long tenure can experience another problem, complacency. The longer they stay with the company, the more comfortable they get. The more comfortable they get, the less they strive to stay on the cutting edge. That is not to say that all employees do this, but it happens enough that you should check. It is very important that when talking with the consultants you investigate what certificates they have, how old the certificates are, and what the company does to keep the consultants current with the latest tools and techniques, etc.

Assess your requirements:

Begin by analysing your company’s leave management requirements. You must consider factors like the number of employees, types of leaves (annual, sick, maternity, etc.), integration with existing payroll systems, reporting needs, and any specific features you require.

Research available providers:

In the next step, look for leave management service providers that align with your business requirements. Then shortlist the providers for further evaluation.

Evaluate provider capabilities:

Review each provider’s website, documentation, and available demos or trials to understand their features, functionality, and user experience. You must assess the key features such as leave request and approval processes, leave tracking and reporting, employee self-service options, notifications and reminders. You must also check if their leave management system can integrate with your existing HR or payroll systems.

Consider scalability and customisation:

You must assess whether the system can scale as your organisation grows. You must also evaluate whether the system can be customised to align with your company’s policies, leave accrual rules, and any specific workflow requirements you may have.

Check for compliance and security:

The next step is to verify that the leave management system provider adheres to legal and regulatory requirements related to leave management. You must also ensure they handle employee data securely and take appropriate measures to protect sensitive information.

Review customer support and training:

Evaluate their response time, availability of customer support channels, and whether they offer training resources or onboarding assistance to help your HR team and employees use the system effectively.

Request references and customer feedback:

Contact the shortlisted providers and ask for references from their existing clients. Contact those references to gather insights about their experience with the provider, the system’s reliability, and the level of customer support received.

Compare costs:

Now, compare the pricing of all shortlisted providers. You must consider the value provided in relation to the features, support, and scalability. Take into account both initial setup costs and ongoing subscription or licensing fees.

Conduct a pilot or trial:

If feasible, consider running a pilot or trial period with one or more providers. This will allow you to evaluate the system firsthand and assess its usability and functionality within your organisation.

Make an informed decision:

On the basis of above points, assess each provider and make a decision that aligns with your organisation’s needs, budget, and long-term goals.

Wrap Up:

Paysquare is a leading provider of comprehensive payroll and leave management services, offering a range of solutions to simplify and streamline the leave management process for organisations of all sizes. Our services are designed to help businesses efficiently track, manage, and administer employee leaves, ensuring compliance with legal requirements and enhancing overall HR operations. With our user-friendly platform, customisable features, and dedicated support, we strive to be your trusted partner in managing leaves effectively and optimising your HR operations.