When we asked 1,200 HR leaders to tell us about their biggest challenges on the job, their responses showed us what it’s really like to tackle leave management. For instance, respondents reported that employees are taking leave more than ever. As our survey has shown in previous years, more than half of employers reported an increase in leave requests in 2025. Of those, two-thirds said the increase amounted to more than 20%.
But HR’s expanding workload isn’t the only factor complicating leave management. Employees’ expectations are also on the rise. Workers expect companies to provide robust leave benefits, and they want the leave experience to be sleek, efficient, and uncomplicated.
HR teams are hard pressed to deliver on those expectations, however. An expanding slate of state laws are making leave management both increasingly complex and high stakes. As states levy new requirements, HR has more to keep up with, and even more opportunities to make mistakes.
With these realities, it’s not surprising that some employers lack the headcount or tech stack to keep leave management in-house. Many organizations are turning to third-party leave administration as a result. This move can be a strategic one, but success depends on choosing the right partner with the right platform.
Below, we’ll discuss the potential and pitfalls of third-party leave administration and provide a few pointers on choosing a partner that suits your organization.
What Is Third-Party Leave Administration?
When an organization uses a third-party administrator (TPA) to manage leave, it outsources the leave management process to an external partner. There are several different types of TPAs and multiple arrangements organizations can choose from, including:
- Third-party administrators: The vendor manages leave requests on behalf of the company, often at scale, while aligning to client-specific policies and processes.
- Co-sourced vendors: The employer and vendor split responsibilities, which can be split in different ways to handle the entire leave process.
- Insurers: Insurance carriers can also administer leave, sometimes combining leave management with services like payroll, systems, or benefit billing reconciliation.
Employers may choose one of these options for any number of reasons. They may be overwhelmed with the volume of leave requests coming from employees. They may feel unequipped to handle compliance risk. Or they may simply need to allocate leave management due to limited time, headcount, and bandwidth.
The Landscape of Third-Party Leave Management
It’s increasingly common for employers to tap a third party for leave management. According to our 2026 State of Leave and Accommodations report, 21% of employers reported outsourcing management for the Family and Medical Leave Act (FMLA). And 14% said they outsource other types of leave, like state and company policies.
Our survey revealed the kinds of vendors employers are using for leave management. Of those who outsource FMLA, for instance, about half used a TPA, while 30% used an insurance carrier and 20% used a co-sourced vendor.
The breakdown was similar among organizations outsourcing other types of leave:
- 44% said they use a TPA.
- 29% said they use a co-sourced vendor.
- 27% said they use an insurance carrier.
As more organizations decide to tackle leave management with an external provider, the role of technology becomes clear. Technology helps TPAs deliver on organizational goals in three ways:
- Improved efficiency: With automation, leave platforms can eliminate repetitive administrative tasks. Software also improves workflow in the leave management process.
- Enhanced communication: High-quality leave platforms open up multiple communication channels for employee engagement, including online portals, emails, texts, and chatbots.
- Improved service: Technology-driven solutions allow client and employees to access information, track claims, manage leave requests, and utilize on-demand service.
More organizations are choosing to implement leave platforms, demonstrating the importance of technology within the leave administration process. In the last year, adoption of leave platforms nearly doubled, rising from 12% to 22% of respondents in 2025. Among adopters are third-party leave managers, who use the technology to optimize leave management for their clients.
Is Outsourcing the Right Solution?
As more organizations choose to outsource leave management, it’s important to carefully consider whether outsourcing is the right decision for your organization.
Think about whether, for example, your team has the capacity to manage growing leave volume and complexity. Is your organization equipped or comfortable owning documentation changes and case tracking? Or would your team benefit from having a partner take ownership of those responsibilities?
Evaluate the kind of leave experience your company wants employees to have. Is your team able to deliver that experience consistently? Could you improve your employees’ experience by leveraging a dedicated partner?
If you’re not sure whether outsourcing leave management is the right move for your organization, tune into our webinar replay: Improving Leave Experiences for Every Program: Insourced, Outsourced, and Everything in Between.
Choosing the Right Third-Party Administrator
If your organization decides it wants to outsource leave management, the next step is to choose the right vendor. Different vendors offer different levels of service, technology, and compliance rigor. It’s crucial, then, that employers carefully evaluate potential partners and choose one that best aligns with their goals, needs, budget, and bandwidth.
To pinpoint the right partner, ask the following questions:
- Do you use a purpose-built leave platform?
- How do you handle multi-state compliance?
- Can you personalize communications?
- Is your reporting fast and reliable?
- Can you see real-time case status?
The Benefits of Choosing the Right Third-Party Administrator
Finding a partner that uses modern leave technology is a crucial step in your search for a third-party leave vendor. When your vendor builds its service on high-quality technology, your partnership will be marked by:
- Scalability: Your vendor will be able to handle surges in leave requests without burning out your team.
- Consistency: Your partner will ensure every employee gets a fair, compliant process.
- Visibility: You’ll get real-time insight into open cases, timelines, and risks.
- Compliance confidence: You’ll be able to trust that ADA, FMLA, PWFA, and state laws are handled correctly.
- Employee experience: Your employees will get clear, timely updates from a partner who feels like part of your team.
- Time back: Your HR team will be able to focus on strategy, not paperwork.
For more information on how to choose an outsourcing partner, check out this article. You can also look to AbsenceSoft customer stories to see how leave vendors leverage technology to provide top-notch experiences for both clients and their employees.
OneDigital, for example, is a national leader in insurance, financial services, and HR consulting, providing benefits, HR, and leave management solutions for 25 years. After implementing AbsenceSoft for its leave of absence services, OneDigital was able to provide the customization needed for its white glove service promise. With the ability to brand communications, configure employer-specific leave policies, and create customized workflows, the team offers a tailored experience for every client.
Similarly, Better Business Planning (BBP) Admin has been in the third-party administration business for over 47 years. To better serve its clients, BBP Admin implemented AbsenceSoft and saw substantial business growth, all while saving more than seven work weeks of time. AbsenceSoft removes the burden of tracking compliance, which reassures prospective clients that everything is under control, ensuring clients feel confident in the determinations made.
Newfront is another example of a third-party administrator that leverages AbsenceSoft to improve its clients’ approach to leave management. With clients struggling with the complexity of modern leave management, Newfront tapped AbsenceSoft to simplify compliance and streamline processes.
How the Right Leave Platform Gives TPAs the Tools to Scale
Earlier on, we mentioned how technology powers successful third-party leave management. Now, we’ll take a moment to show you how the right tech platform allows TPAs to scale.
When a leave management vendor runs on a modern platform, like AbsenceSoft, it can:
- Automate compliance with federal and state leave laws
- Offer employee self-service
- Centralize documentation and case history
- Provide analytics and insight to HR in-house
- Provide white-glove service with technology-enabled efficiency
These capabilities ensure a company’s leave program is consistent and compliant. They also promote visibility; even though a company has outsourced its leave, it has increased access to data and reporting that provide important insights.
By leveraging this technology and its capabilities, TPAs can provide positive leave experiences at scale — for clients and their employees alike. Vendors can reduce client’s administrative workload, promote cohesion between HR and leadership, and remain adaptable as case volume ebbs and flows.
Employees, meanwhile, receive dedicated support, consistent communication, and clear guidelines. When employers work with TPAs using AbsenceSoft, employees are empowered through self-service technology, which enables employees to request, manage, and track their leave whenever, wherever, and however they choose.
Prioritizing compliance, transparency, and the employee experience
A third-party leave administrator can lighten your team’s workload. But the success of your partnership depends on both the quality of the vendor you choose and the quality of the technology it uses. A leave partner can be a powerful boon for your organization; but only if you partner with a provider that prioritizes compliance, transparency, and employee care through technology.
To find your perfect match, ask thorough questions throughout your search. Be sure to vet the technology your potential vendors use.
Ready to find the right partner? Contact us at tpareferrals@absencesoft.com to get a technology-backed TPA that’s right for your business.
Whether you outsource or not, modern tools and clear processes are no longer optional. If you want to learn more about better managing leave in house, check out our In-House Leave Management toolkit https://absencesoft.com/resources/the-in-house-leave-management-toolkit/