Absence management wasn’t always as difficult as it is now. In the past, when an employee requested time off, a manager approved it, HR tracked it, and payroll adjusted accordingly. But things are more complicated now, with today’s patchwork of federal, state, and local leave laws; rising leave-of-absence rates; and the operational complexity that comes with multistate or hybrid workforces. Absence management is now its own discipline and carries real consequences when handled poorly.
Organizations wrestling with leave compliance — whether they manage it manually or have a patchwork of systems — face the same questions. What does it actually cost when absence management breaks down? How can third-party service partners help, especially if you’re using Workday? And how do you tell a good provider from a poor one?
Absence management is the process by which organizations track, approve, and administer employee absences in accordance with federal, state, and local leave laws. It covers planned absences — vacations, parental leave, scheduled medical procedures — and unplanned absences — sick days, short-term illness, and family emergencies.
For every request, absence management determines whether the employee is eligible, whether the absence complies with applicable law (FMLA, ADA, state and local leave statutes), and how the time off affects pay, benefits, and accruals.
Consistently handling those questions across hundreds or thousands of employees is what makes absence management a discipline. Done well, it gives HR teams a clear view of who's out, why, and what coverage is in place. It also gives employees a predictable, compliant process for requesting the leave they're entitled to.
Absenteeism costs U.S. employers an estimated $225.8 billion each year in lost productivity, or about $1,685 per employee, according to the CDC Foundation. However, that figure only covers productivity losses tied to illnesses and injuries, not the additional costs of overtime pay for employees covering shifts, reduced output from overworked teams, and the hidden costs of mistakes from rushed or reassigned work.
And the problem is getting worse, not better. Between 2019 and 2024, absence rates in the U.S. rose from 2.8% to 3.2%, according to the Bureau of Labor Statistics, while overall leaves of absence rose 30%, according to ComPsych. Mental health leave alone climbed 300% over the same period. For most organizations, that means the cost of absenteeism today is higher than it was before the pandemic.
Most absence management services combine software, specialized expertise, and established processes to handle leave from request to return. Third-party providers can help with tracking, approvals, compliance checks, and documentation — all tasks that would otherwise fall to an in-house HR or benefits team. The goal is consistent, accurate handling of every leave request, regardless of type, complexity, or volume.
Most providers offer some combination of the following:
A provider's value comes from handling these functions together rather than in isolation. When leave tracking, compliance, case management, and reporting all run through the same system, data remains consistent, and the employee experience is predictable.
Workday is a powerful tool for absence management when you're also using it for pay, benefits, and time tracking. Leave requests and manager approvals live in the same system and run through the same workflows. Critical absence data — accruals, leave balances, FMLA designations — also lives alongside each employee record.
Unfortunately, not every third-party absence management provider lets you keep Workday as your single source of truth. Many operate only on external platforms and pull data from Workday through file transfers. This creates problems for your team later, as payroll, benefits, and HR all end up working from different leave balances and accruals.
A Workday-native approach protects that single source of truth. Instead of living in another platform, your absence data syncs back to Workday through an established integration, so payroll, benefits, and HR are looking at the same information. When an audit request comes in, the answer is in one place.
OSV's Leave of Absence solution is built around this model. Employees and managers interact with leave through Workday. From there, a dedicated leave platform handles eligibility determinations, FMLA tracking, and return-to-work coordination. The data then syncs back, so Workday remains your record of truth. The result is a single employee record and consistent data across payroll and benefits, without making HR manage multiple systems.
Because many providers offer similar features, the real test when evaluating potential service partners is how well they fit your organization. Any service partner should be able to answer these five questions.
Providers that operate on their own external platform must pull data via file transfers. This means that, eventually, your team will have to reconcile different versions of the same employee record. A provider committed to preserving your system as your one source of truth will help you avoid this problem. For Workday customers, this is the difference between a Workday-compatible approach and a Workday-native one.
The rules of the federal FMLA and ADA are the same nationwide. But at the state and municipal level, laws vary widely. Can the provider you're considering track regulatory changes, apply them to your workforce, and handle multi-state compliance?
Vacations and sick leave are easy. Intermittent FMLA and ADA accommodations, concurrent leaves, and return-to-work coordination after an extended medical absence are harder to manage. The provider you're considering should be able to tell you:
Being able to see absence patterns across your organization without a custom data pull is critical. You should also be able to produce documentation for a compliance audit without a weeks-long scramble. Ask your prospective partner what reporting is available out of the box, how quickly you can access historical leave data, and what audit trail exists for eligibility decisions and notices.
Some providers give you a dedicated contact who gets to know you and your business. Others route every inquiry through a shared support queue. These approaches lead to very different experiences. What does your prospective partner do when an employee has a question during a leave? How quickly are they committed to responding? How do escalations work when something goes wrong?
The right partner will be able to answer these questions thoroughly. If an evaluation meeting produces more brochures than answers, that itself is a useful sign.
The right absence management approach depends on the systems your organization already runs on. For Workday customers, that means finding an approach that preserves Workday as your source of truth rather than working around it. OSV's Leave of Absence solution is built specifically for Workday customers. It handles the case-level complexity of modern leave administration while keeping employee data consistent across payroll, benefits, and HR. Talk to an OSV expert to see how it fits your organization.