A comprehensive guide to leave management in 2025

All employees should be able to take generous time off work to rest, connect with their loved ones, tend to personal needs, and simply enjoy their lives. Yet, managing unplanned absences, coordinating holiday leave, and ensuring team members fully utilize their paid time off (PTO) is no easy feat.

From navigating labor law compliance to keeping accurate records and splitting workloads when employees are away, leave management presents unique challenges for HR teams of all sizes and sectors. Still, as employers look for new ways to stand out in the competitive recruitment landscape, implementing clear, attractive leave policies is critical — especially with a staggering 82% of workers saying they feel at risk of burnout in 2024.*

Even more concerningly, 60% of managers and 50% of individual contributors report feeling more overwhelmed than they did a year ago.**

‍People-first leave management has also become a powerful differentiator for organizations that may not always be able to offer the highest salaries. By implementing fair, compliant absence policies, companies can support a healthy work-life balance, boost retention, and maximize productivity.

This guide will cover the role that leave management plays in helping organizations achieve their people enablement goals — plus five top tips for nailing your strategy.

*Mercer, 2024
**Leapsome’s Workforce Trends Report, 2024
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Our platform now includes an HRIS with a people-first approach! In addition to our people enablement features, you can also streamline leave management with automations, intuitive approval workflows, and shared team calendars (and do much more!).

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What is leave management?

Leave management involves the processes HR teams use to handle all aspects of employee time off, including:

• Planned vacations
• Public holidays
• Sick leave
• Parental leave
• Jury duty
• Compensatory leave
• Religious and cultural holidays
• Personal emergencies  

Sometimes called “time-off management,” this HR framework helps employers ensure that employees have access to the leave types they need — from vacation days and sick leave to parental leave and jury duty. By providing structured leave policies, organizations can support work-life balance, ensure compliance with legal requirements, and foster a healthy company culture that encourages employees to stay and thrive. 

These are crucial considerations for business leaders and HR professionals in today’s market, as 74% of employees named good work-life balance (a core pillar of leave management) as their main source of happiness at work in 2024.

👀 You may have heard the term “absence management” mentioned in the context of leave management. Leave and absence management are closely linked, but it’s worth noting that absence management is often more associated with unplanned leave due to illness, bereavement, emergencies, or unsanctioned absenteeism.

How effective leave management benefits your organization

Great leave management is good for business. It allows for smoother internal operations, ensures legal compliance, and contributes to overall employee happiness — helping reduce turnover costs and maintain an enjoyable work environment. 

Here’s how a robust leave policy can benefit your business:

• Increasing employee retention — The CIPD Good Work Index 2024 found that 17% of workers struggle to take time off, even though poor work-life balance is one of the three leading reasons why people leave their jobs. Implementing a robust leave management process can clarify internal leave policies so that employees can request time off more easily. HR professionals can also leverage leave management technology to ensure workers take all the leave they’re entitled to. 
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• Mitigating compliance risks — Compliance with labor laws is vital, and this includes regulations on absences and PTO. Up-to-date leave policies with legal expertise help protect businesses from potential liabilities.
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• ‍Streamlining HR processes — Leave management systems can automate routine HR processes, reducing the time HR teams spend on manual tasks and allowing them to focus on other high-impact work. Leave management technology also allows HR teams to analyze leave patterns to allocate resources more effectively.
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• ‍Boosting productivity across the organization — Good leave management practices ensure smooth workflows, even when key team members are away. Studies show that people are healthier, more focused, and more productive when they take time off throughout the year.

💡 We recommend that your People team consult with a legal professional to ensure that your leave management policies comply with the labor regulations that apply to you.

5 top tips for effective leave management

Whether you’re revamping your approach to leave management or creating policies for the first time, these best practices will help you establish a people-first, efficient framework.

1. Define your organization’s leave management priorities

Before creating or updating any people management policy, ask yourself: Why are we working on this project? What will this leave program help the company (and employees) achieve, and how does it align with our goals?‍

Say you aim to optimize your leave management to increase employee engagement. In this case, emphasize transparent leave policies that encourage PTO usage; some companies even require staff to take a minimum amount of PTO each year.

Or, if your main motivation is operational efficiency, you may choose to focus on workforce planning and data management within your leave processes — i.e., how will teams handle the workload when someone is away?
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2. Maintain clear, consistent leave management policies

According to Pew Research, despite the majority of workers placing a high priority on PTO, less than half (48%) take all the leave they’re offered. About 49% of these individuals say they don’t take time off because they’re worried about falling behind, and 43% report feeling guilty about asking colleagues to cover their workload.

This highlights a deeper workplace issue: unclear expectations around leave and a culture that doesn’t fully support employees taking time off. These challenges can lead to employee dissatisfaction and burnout.

Creating and maintaining a straightforward, fair, and compliant leave management policy can help address these concerns. For example, a clear policy sets expectations for workload coverage, communicates the importance of rest, and ensures employees know they can take leave without negative consequences. 

While leave policies are unique to every business, a basic framework might cover:

• Types of leave offered (e.g., vacation, parental, medical)
• Eligibility criteria and accrual rules
• Procedures and timelines for submitting, processing, and recording leave requests
• Carry-over policies and forfeiture guidelines
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3. Leverage leave management technology

Thanks to modern technology, you can find human resources information systems (HRIS) that are designed to automate different aspects of people management — including leave.

‍Leapsome’s brand-new HRIS tool includes an absence management feature to help People teams run an organized, efficient leave management process. Its intuitive interface is easy for HR and employees to use, allowing for a reduced administrative workload and a better overall employee experience. 

With Leapsome’s absence management tool, HR professionals can:

• Create and maintain leave policies for different locations 
• Approve or deny requests in moments
• Select from a predefined list of different types of leave (from parental leave to unpaid time off) 
• Outline a process for managing leave requests
• Change system settings to suit company leave guidelines (e.g., allowing half days or requiring a doctor’s note after a specific number of sickness days)
• Define who can access, generate, and edit leave requests
• View a calendar of pending and approved leave of absence requests

Our absence management feature also syncs seamlessly with the rest of our HRIS module. So, you can easily pull employee data related to employment contracts, work anniversaries, probation period entitlements, or overtime agreements from other modules.

The tool’s self-service function also means that team members can easily request days off and keep track of their leave throughout the year, minimizing the number of inquiries that come through to the HR team.
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4. Regularly review and adjust leave management policies

Considering how quickly circumstances can change for your business and its employees, be prepared to consistently review your leave management process and ensure that all the elements still make sense and are compliant over time. Conducting regular audits will provide insights into areas for improvement, helping ensure leave policies remain relevant and effective.

Changes in team sizes or new HR trends may also require policy adjustments. For example, floating holiday allowances are increasingly popular; these allow employees to take extra paid days off at a time of their choosing. This is a great option for businesses that want to accommodate diverse employees who may observe different holidays.

💡 Remember to ask for feedback! 

Whether you’re sending out a dedicated pulse survey or just having a casual chat, hearing directly from other team members can help you develop and maintain effective, relevant, and meaningful leave management policies.

5. Ensure compliance with local and industry regulations

Every region has different rules regarding leave entitlements, and it’s crucial to research the legislation that applies to your organization. If your business operates in different countries or has employees across the globe, you may need to follow different labor laws. Regardless of your company’s circumstances, it’s ideal to consult a legal professional to make sure you’re checking all the boxes when it comes to applicable labor regulations.

For example, companies in the United States have to adhere to both state and federal requirements to mitigate legal and insurance risks. In some states, employers are required to offer paid sick leave, but not all. Meanwhile, under the Family and Medical Leave Act (FMLA), US businesses with over 50 employees who have employed an individual employee for at least 12 months and at least 20 workweeks during the current or previous calendar year must provide unpaid medical leave for this person.

On the other hand, organizations in countries that belong to the European Union might need to follow both national and EU legislation, such as national laws implementing the EU Working Time Directive.

Once you’ve consulted your specific regulations, you’ll be able to streamline some of these processes with Leapsome’s new HRIS. For instance, it helps users centralize documentation and allows them to enter custom rules into the leave management tool, allowing for the automation of various routine tasks involved in effective compliance management.
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Gain new confidence in your leave management processes

Leave management isn’t a “nice-to-have” — it’s an essential part of people management. Rethinking your approach to time-off policies can help you unlock new benefits, increase employee satisfaction, and simplify a range of time-consuming HR processes. 

To create an effective leave management framework for your organization, you must:

• Prioritize work-life balance by creating clear leave policies that encourage workers to take their entitled leave.
• Ensure compliance with labor laws and data privacy regulations (such as GDPR) to avoid penalties and support fair working environments.
• Leverage automation through purpose-built leave management tools that reduce errors and alleviate HR workloads.

By harnessing people-first leave management software, you can do all of this without overwhelming your HR department.

Leapsome’s HRIS enables HR leaders to strike a balance between employee enablement and operational efficiency. Through intuitive admin tools and powerful analytics, your business can integrate comprehensive leave management policies into your human resources strategy — all while enjoying the perks of automation. 

The result? A simplified tech stack, rich data insights, and, most importantly, happier employees.
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✅ Elevate your HR workflows

Implement and streamline people-first leave management policies with Leapsome’s HRIS.

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Disclaimer: This article is for informational purposes only and doesn’t offer legal, tax, or financial advice. While we’ve done our best to ensure accuracy and completeness, we can’t guarantee everything is up-to-date or error-free. For tailored advice, we recommend consulting a qualified lawyer or tax advisor.