Today’s employers are looking to increase employee retention at all costs. Some even go as far as offering paid sabbaticals–an extended leave to work on personal and professional development. Many are seeing considerable success, but are paid sabbaticals viable for your company?
Current Retention Statistics
Retention rates across most industries are quite dismal. Gallup’s State of the American Workforce study found, “51 percent of workers are looking to leave their current jobs.” When it comes to higher education employees earning top salaries, it’s even worse. Another study from meQuilibrium reports, “42 percent of employees earning $75,000 or more intend to quit in the next 6 months.”
Statistics like these prove that employers need to be proactive about reducing turnover and remain diligent about retaining top talent. Paid sabbaticals are one of the more alluring options.
Here’s how the sabbatical process works. Eligible employees who have worked for a company for a designated amount of time (usually at least three years) receive paid leave for a pre-determined duration. In most cases, this ranges anywhere from one to six months. During this time, the employee engages in enriching activities such as travel or volunteering that contributes to their personal/professional development.
Employees on sabbatical still receive either full or partial compensation. The main purpose is to provide employees with a chance to recharge and grow. In turn, it should result in more loyal, educated and enlightened employees.
Does it Work?
You may be wondering about the practicality of paid sabbaticals. Is it really viable for SMBs?
If you look at the employers listed on Fortune’s 100 Best Companies to Work For in 2012, roughly 25 percent of them offered paid sabbaticals. This is unlikely to be a fluke and shows that there is, in fact, a correlation between this type of program and company success. For the most part, employees respond quite favorably to this type of perk. It can be especially popular among millennials who tend to value flexibility and self-development.
However, it’s important to note that most companies have at least 1,000 employees and many have 2,000 plus. Employee absences are not always feasible for really small businesses with tight budgets and 100 or fewer employees.
The employees who typically participate are those who are highly skilled, talented and sought after. Some of the most common industries taking advantage of sabbaticals are finance and high-tech. In other words, you don’t usually see low-wage workers taking paid sabbaticals.
Making the Call
This is definitely a program worth considering. It encourages loyalty and retention because only employees who have been part of your company for an extended period of time are eligible. However, you’ll want to examine all of the angles before deciding whether or not it makes sense for your business.