Sabbatical leave: Does it pay dividends toward employee retention?

Sabbatical. You have heard the word before. It’s often associated with the teaching profession. What does it mean/?  Should you offer it as an option, an employee benefit?

What is a sabbatical?  Is it a form of vacation?  There are plenty of variables when it comes to providing an answer. It is time off from work. It might be a form of paid leave, but it might not be paid. The time period can vary. It might be four weeks or as long as a year. The purpose of this type of break is to allow the employee to work on a project or undergo an activity they would not be able to do while fulfilling the requirements of their full-time job. Sabbaticals are often associated with academia, so examples of the reasons might be to write a book, complete a research project, work on an archeological site or study towards an advanced degree.

Who offers sabbaticals as an employee benefit?  Quite a few companies offer paid or partially paid sabbaticals.  Some recognizable names include AARP, Adobe, Bank of America, Biogen, Blue Cross/Blue Shield. Charles Schwab, General Mills, Intel, McDonalds, Microsoft, Nike, Paypal, Padagonia, Price-Waterhouse, Purina and Zillow, and plenty more.

Is this paid leave/?  As of 2018, 15% of firms made sabbaticals available, but only 5% offered them as paid leave from work. Whole Foods is an example of an employer offering a six-week sabbatical to employees who have been with the firm 3+ years, but their sabbatical is unpaid.

What’s the logic of letting employees take off long periods?  This can be an employee retention strategy. During the pandemic we heard about the Great Resignation. Many people chose not to return to work. Burnout is a serious problem in corporate America. The cost of hiring and training a new employee to replace a departing one is considerable. One strategy is to allow employees to take an extended period of time off to cope with stress or address other issues. Suffered the loss of a child or the end of a relationship? Offering a sabbatical as an employee benefit lets them know the company is being supportive.

Is there a “waiting period”?  Years ago, I saw a film where an executive has made the decision to hire the person sitting in the chair opposite their desk. When they delivered the good news, the first thing the new hire asked as: “When is lunch?”  One of the fears an employer might have is the abuse of a very generous employee benefit. Most firms have a waiting period, or a period of full-time employment before an employee can take a sabbatical. As an example, Bank of America allows four weeks after seven years.

Are there other requirements?  The work still needs to get done. An employer might require the person taking the sabbatical to train the person who will be covering for them during their absence. If an employee is paid while they are away, they might be prohibited from doing paid work elsewhere during their sabbatical.

Can this become even more complicated?  Yes. Your employee is still your employee, but they are not coming into work every day. How does health plan coverage work during this period?  How does accumulating years towards pension benefits affected?  A lot of thought needs to go into designing and explaining this new benefit.

Related: Employee leave requests are expected to increase from 41% to 60%

The idea of allowing an employee to be away from work for a month or even a year can sound radical. Paying them while they are away can sound expensive. In high stress jobs, retaining your employees is a constant issue. When competing to hire new employees, you need to offer benefits that will make your firm the first choice for the candidate receiving multiple job offers.

Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book, “Captivating the Wealthy Investor” is available on Amazon.