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How to and Why to Use an Employee Vacation Tracker for Your Startup

Last Updated on June 5, 2023 by David

HR is no one’s favorite startup-related topic. But it’s important. A business is nothing without engaged and productive employees.

In this post we’re talking vacation days. We’re talking about how you track vacation days in your startup, what (if any) employee vacation tracker software tool you should be using, and why vacation time is so important for your staff in the first place.

All this is part of building a productive, happy team, who meet expectations, go the extra mile and stay with your startup for the long haul. Keep reading to learn why.


First, a quick TL:DR; of what we’re going to be discussing:

  • It’s important to build an efficient process to track vacation days for your employees. This saves time, saves your team’s mental energy, and boosts productivity.
  • Vacation days are important to your employees, allowing them to recharge their energy stores, avoid burning out, and feel valued.
  • The best way to track vacation time depends on the scale of your startup. Some can work with a simple spreadsheet, while others should use a dedicated vacation tracker app.

Now let’s dive a bit deeper.

Why the Way You Track Vacation Days is Important (and Why You Should Automate It)

This might seem like an incredibly minor part of running a startup. Why even let this enter your headspace?

That’s kind of the point. If you don’t have a process for tracking time off, it’ll constantly be a minor headache every time someone wants to take a day off, a longer holiday, a sick day, or any other type of PTO.

You want this to be automatic, requiring zero thought, so you (or your managers) can dedicate time and energy to tasks that actually grow the business.

Here are the biggest reasons why this process is worth figuring out.

Save Time on Repetitive Tasks

Tracking vacation time/PTO involves a lot of data entry. It’s time-consuming, and there’s no reason you need to be paying someone (or spending your own valuable time) on this.

Most data entry can easily be automated, or at the very least you can follow a streamlined process that minimizes how long it takes. The time you save can add up to hundreds of dollars per week, or even per day, in reclaimed productive hours.

Preserve Mental Energy

Repetitive data entry is not only a waste of time, but a waste of mental energy. This is particularly true if important people are involved in this process, like HR managers, team leaders, or founders themselves.

Key people should be able to dedicate their mental focus towards more valuable tasks. Every time their focus is pulled away to a simple data entry task, it takes longer to refocus on things like deep work or analytical tasks.

You want to automate and delegate as much of this as possible, to leave as little as possible for higher-ups to think about.

Reduce Disruptions Due to Human Error

Data entry also leaves room to human error. A missed leave here, a missed reply there. As humans, we’re fallible creatures, open to mistakes.

These kind of errors lead to confusion and disruption. Someone’s on vacation and no one else knew about it. A key person for a client or account is off, and everyone else is left scrambling to cover. It all, eventually, leads to discontent as well.

Wouldn’t it be great if you could remove human error from the equation almost completely?

Make it Easier to Track Data and Trends

Processes and automation make it much easier and more efficient to gather data and analyze trends.

HR needs this data to know how much of each employees’ leave balance is remaining, who may be showing signs of absenteeism, who isn’t taking enough leave, as well as keeping records for payroll and compliance purposes.

If your process is casual and you don’t keep formal records, this will be a pain, and a huge time-sink. A streamlined process (even better, a process automated by a vacation tracker software tool) saves a massive amount of time in this respect, saving money and energy too as a result.

Incentivize Employees to Take Paid Time Off

The final point is no less important. You want employees to take regular time off, and a smooth process makes it more likely they’ll do so.

If it’s difficult or unclear how to ask for time off, employees will take less time off. Then they’ll be more likely to become overworked, burned out and dissatisfied with their job.

You’ll see lower productivity, and your top talent will start moving elsewhere for better jobs.

Vacation tracker apps are a proven way to increase the amount of PTO employees take – as shown by Dynamite Jobs, who saw a marked increase in overall vacation time (and a happier team as a result) when they started automating this process with a vacation tracker.

Why You WANT Employees to Take Their Vacation Days

A lot of founders, execs and managers don’t want their employees to go on vacation. They want them in the office or online, constantly grinding.

As such, they’ll actively make it harder to take vacation time, with complicated or confusing processes. Or, they’ll make it pretty clear that they don’t like people asking for paid time off.

This one of the biggest missteps you can make, thinking that it’s a good idea to squeeze every bit of productivity out of your team members.

Here’s what happens when you disincentivize PTO in your startup:

  • Employees get overworked and unhappy.
  • Their productivity drops, generally losing more productive hour than what you would have lost had they taken a vacation.
  • Overall workplace productivity is lower.
  • Lower overall job satisfaction and engagement spreads like a virus, damaging company culture.
  • The best employees jump ship as soon as a better opportunity comes around.
  • Others become quiet quitters, actively disengaged and turning up to work just to watch the clock.

Stinginess over sick leave has a similar result. When people are forced to come into work when they’re unwell, they’re less productive, and it takes longer for them to recover. Worst of all, they risk spreading illness among other team members (if you’re office-based), getting more people unwell.

The consequence, in lost productive hours, is worse than if the employee had just taken paid sick leave for the time they needed to get better.

In most cases, strict rules or disincentives around PTO cause bigger problems in the long run than an employee’s temporary absence.

The best play long-term is actually to encourage your team to take vacations, or to take paid sick leave when they’re unwell. The way you track time off should align with this.

Three Ways to Track Vacation Days (Why an Employee Vacation Tracker is a Must)

So how should your vacation tracking process work?

It depends, to a degree, on the size, scale and type of your business. For some, a simple spreadsheet might suffice. But startups over a certain size, or with the ambition to scale, should use a dedicated employee vacation tracker software.

Let’s break it down, with three options to suit different types of startup.

Option One: A Manual Google Sheets/Excel Leave Tracker

Small teams (ideally single-digit employees) can track vacation time using Google Sheets or Excel.

Tracking PTO manually costs basically nothing. You’re using tools you already use, so you don’t need to add another expense.

It’s also pretty simple and straightforward. There’s no learning curve here.

The best way to do this is to create a new sheet for each month, with team members on one axis and dates on another. Create a color-coded system to indicate different types of leave, and tally up the totals at the end of the month.

Click here to get a free Google Sheets vacation tracker template as shown above.

The downside is there’s a lot of data entry involved. As we established, this is time-consuming, and prone to error.

As your headcount grows, these downsides become even bigger. A Google Sheets/Excel vacation tracker doesn’t scale. So while it’s a good option if you don’t want to sign up for a tool, it’s not the best if you expect to grow.

  • Best for: small teams with just a few employees.

Option Two: A Dedicated Vacation Tracker App

The best solution for most startups, whether you’re a smaller team or you’re approaching 100+ employees, is a specialized vacation tracker app.

This is the best way to automate vacation tracking, and create a streamlined system that’s easy for administrators and stress-free for employees.

Take Flamingo – the vacation tracker software we personally use in our business. It works within Slack, and probably saves multiple hours per day for managers and team members combined.

Employees request leave within Slack, with a simple time off request form.

This gets sent straight away to their manager, who can approve or deny the request with one click.

This already saves a ton of time and mental energy compared to, say, if employees had to write an email or message to request leave, then managers had to go into their email, read the request and send a response.

The tool then automatically adds approved PTO to the team’s leave calendar, and automatically notifies the team when someone’s leave is approaching.

The app retains all the relevant data you need to send to payroll, compliance or HR.

A vacation tracker software like this is simple, easy to use and scalable. It costs a little more than a Google Sheets or Excel leave tracker, but the value it delivers outweighs what you’ll pay for a subscription.

  • Best for: small to medium-sized teams and remote startups.

Option Three: Full-Stack HR Tools

Finally, you’ve also got the choice of a full-stack HR management tool, that covers leave management along with other HR and admin tasks.

These tools may be a better fit for enterprise-grade startups, with more specific or extensive needs in a vacation tracker software, along with the need to integrate directly with payroll, compliance, etc.

A few examples include Zenefits (pictured above), BambooHR and Gusto.

Though there’s more you can do with HR suites like these, there are downsides too. You want to weigh the pros and cons.

Pros include:

  • Complete integration of HR, admin, compliance, onboarding, performance management, etc.
  • More in-depth reporting.
  • Higher standard of legal compliance, security.

The downsides include:

  • Price: much more expensive than standalone tools.
  • Complexity: more of a learning curve involved for both managers and employees.
  • More difficult to integrate with your current workflow.
  • Add more mental strain than simpler tools.

Generally these tools are a good fit for large businesses, enterprise-level teams, and those with high-level legal and/or compliance needs.

For agile, remote teams, bootstrapped startups, and those with a lower headcount, the expense and complexity of a full-stack tool is not worth it. You’ll be better of with something simple.

  • Best for: enterprises, teams with high-end needs.

Final Thoughts

Most founders are inclined to focus on high-leverage tasks, like sales, marketing and product development, and discard the rest as unimportant.

But you can only do this by setting up efficient processes for the “little things”, like leave management. Picking the right vacation tracker software to fit your team goes a long way to doing this.

Alongside this process, you want to make sure you’re encouraging your team to take time off. Doing so will help you build a happier, more engaged and more productive team, and your vacation tracking process will ensure that your employees’ absence causes minimal disruption.

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