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Buyer's Guide

by Brian Westfall,
Market Research Associate
Last Updated: March 22, 2017

To understand the importance of meticulous employee PTO tracking, let’s break down the numbers.

The average American worker is allotted 10 days of paid vacation a year and uses 84 percent of them, or about 8 days. For a five-person company, that’s 40 days of vacation a year. A 50-person company? 400 days. Oh, and make sure to double those numbers if you work at a company in the EU. By law, every employee is given 20 days of paid vacation a year.

Add in any days for workers who are sick or on bereavement, and the fact that every hour of paid leave costs an average private employer $2.22. It quickly becomes clear that keeping track of your workers’ vacation and PTO allotments is vital to keeping benefits costs down.

Luckily, vacation and PTO tracking software exists to help small businesses manage the numbers for their entire roster of employees with ease.

In this Buyer’s Guide, we’ll cover everything you need to know about employee vacation and PTO tracking software to help you decide on the right system for your business, including:

What Is Vacation Tracking Software?
Common Functionality of Vacation & PTO Tracking Software
Benefits of Using Software for Vacation & PTO Tracking
How Much Does Vacation Tracking Software Cost?
Market Trends to Understand

What Is Vacation Tracking Software?

Also known as time and attendance software, employee vacation tracking software allows HR personnel and department managers to monitor employee absences for vacation, sick leave or otherwise. Many systems also track the hours worked for individual employees, including overtime.

Employee time card in vacation tracking software Optimum HRIS

Employee time card in Optimum HRIS

Vacation tracking software can be bought on a stand-alone basis (e.g., TSheets) or as part of a broader human resources information systems (HRIS) suite with capabilities such as payroll, benefits administration and recruiting (e.g., BambooHR).

It’s important to note, however, that if you’re looking for a system that goes beyond tracking PTO and hours worked to include more advanced functionality for things such as employee shift scheduling and schedule distribution, you should head over to our employee scheduling software page.

Common Functionality of Vacation & PTO Tracking Software

You can expect to find most, if not all, of the following functionality in vacation and PTO tracking software:

PTO management Track individual accruals and usage of different types of paid time off, including sick days, vacation days, holidays and bereavement.
Vacation approval Employees can request time off, notifying managers to approve or disapprove the request.
Clock-in/clock-out Workers can access the system to clock in, clock out and log their hours worked. Managers can manually enter times if necessary.
Attendance tracking See the hours worked for individual employees or whole departments across a variety of date ranges.
Time clock integration Employees can clock in and out of shifts online, from their computer or phone, or through a physical wall clock system.
Payroll integration Automatically carry employee hours and absences over into your payroll system to accurately calculate wages.

Benefits of Using Software for Vacation & PTO Tracking

In a 2015 Software Advice report, we found that 48 percent of HR software buyers are currently using manual methods such as Excel spreadsheets or pen and paper to handle their HR needs, including employee attendance and vacation tracking. You may even be part of this group.

A system dedicated to employee vacation and PTO tracking offers a number of benefits over manual methods, including:

  • Employee self-service. Instead of a single manager or HR employee logging the hours for every worker in the organization, employees can log in to the system and do it themselves. Employees can also keep track of their own PTO accruals.
  • Increased transparency. Many vacation tracking systems will automatically flag strange or incompatible entries (e.g., an employee requesting PTO they don’t have etc.) and notify relevant personnel.
  • Increased security. Unique login IDs, dual authentication and other security features ensure that time and PTO entries are accurate and uncompromised.
  • Payroll integration. Integrating tracking software with your payroll system allows employee hours to be ported over automatically to calculate wages, eliminating tedious double entry.

How Much Does Vacation Tracking Software Cost?

Vacation tracking software is usually priced one of two ways: with perpetual licensing or subscription licensing.

With perpetual licensing, you pay a one-time fee upfront to use the software indefinitely. The obvious benefit with this type of payment method is much lower recurring costs, but the upfront investment is usually significant. This type of licensing is more common with on-premise systems that companies must host on their own servers.

With subscription licensing, you pay for the software on an ongoing monthly or annual basis. Sometimes this subscription is a flat fee (e.g., $20 per month), but more often it is based on how many employees you have at your organization (e.g., $5 per employee per month). This type of licensing is more common with cloud-based software, also known as a software-as-a-service (SaaS), where the system is hosted by the vendor themselves for clients to access through a web browser.

Our Total Cost of Ownership Calculator will show you that the costs for each option tend to equal out over time.

Market Trends to Understand

Employee work-life balance has become an increasing concern in corporate spheres in an effort to boost recruiting efforts and enhance company culture. Here is how vacation tracking software is keeping up with some noteworthy trends:

  • Flexible work arrangements (FWAs). Flextime and remote working have become popular perks in recent years to attract workers tired of the typical 9-to-5 office job. If your company offers FWAs, cloud-based vacation tracking software can allow workers to check in and out of shifts at home or anywhere else. You can also set customized rules for individual workers or departments to accurately track any flextime arrangement.
  • Unlimited PTO. Another recent trend is for companies to offer employees unlimited vacation, allowing them to take off as much time as they want, if their work quality hasn’t dropped off and their manager approves it. If you’re experimenting with unlimited PTO, be sure to still track how much time off is being taken to compare to a standard policy and determine if it’s worth adopting it permanently.

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