Do Your Time-Off Policies Need a Reboot?

Corporate America moves to broaden parental leave rules and offer ‘limitless vacations.’ Small businesses may need to look at changes in these areas to compete for top workers.
Do Your Time-Off Policies Need a Reboot?
Judy Kneiszel

Earlier this year, U.S. Secretary of Labor Thomas Perez was quoted as saying: “We are on the cusp of huge breakthroughs on paid leave and paid sick days. I believe that in 30 years, we will look back at this as the moment we began to turn the corner, when a sleeper issue finally began to awaken and when grass-roots momentum began to gather steam and roll toward a broad national consensus.”

Are you on the cusp of changing how you view paid time off for your employees? Have your company policies on vacation, sick leave, parental leave and other employee benefits changed over the past five or 10 years? Are you prepared if the “broad national consensus” demands change?

Playing catch-up

One of the side effects of becoming a more global society is how easily we can compare ourselves to other countries. And Americans who compare downtime are looking with envy on their foreign counterparts.

Take, for example, maternity leave. Almost all developed countries have mandated paid leave for new moms and many also have paid leave for new dads as well, including the U.K., Australia, Brazil, France, Indonesia and the Netherlands.

But it’s not just new parents who get more paid time off in other countries. According to a 2013 report by the Center for Economic and Policy Research, “the U.S. is the only advanced economy in the world that does not guarantee its workers paid vacation. European countries establish legal rights to at least 20 days of paid vacation per year. Australia requires 20 vacation days per year; Canada and Japan mandate at least 10 paid days off.”

And that doesn’t include holidays. If you throw in paid holidays, the gap widens further because while the U.S. doesn’t legally mandate any, most other wealthy countries offer at least six.

But just because paid holidays, vacations and leaves are not legally mandated doesn’t mean Americans aren’t getting time off, does it? Well, yes it does – for some. That same Washington think tank reports almost a quarter of Americans get no paid vacation or holidays. The average American private sector worker, however, gets about 10 paid vacation days and six paid holidays each year.

Raising the bar

It seems inevitable that the way we think about working, or rather not working, will evolve in America. Vacation, family leave and sick days are all under the microscope thanks not only to what we see as common practice in other countries, but also because some U.S. corporate giants are introducing sweeping changes.

In August, Netflix announced unlimited paid maternity and paternity leave for up to a year. A day later Microsoft Corp. announced it was offering up to 20 weeks of paid leave for mothers and 12 weeks for fathers. Less than a week later, Adobe Systems Inc. extended its parental leave policy.

These changes will only affect a small number of workers in our nation’s labor pool but got a lot of press coverage. It may cause a ripple effect to other large companies. And if more large companies start offering this kind of benefit to employees, expectations could shift for all workers. While we’re unlikely to see laws requiring companies to offer more paid time off, attitudes regarding time off might trickle down to smaller companies, effectively changing the standard.

In general, the goal of generous leave policies is attracting and retaining the best and brightest employees. Companies that offer paid leave and paid vacations must see value in their policies.

Other HR trends

Netflix and a few other tech companies also offer what’s called “limitless vacation.” Their vacation policy is that they have no policy. They trust employees to monitor themselves and take the time they need when they need it. While this may be an interesting idea, it’s hard to see how it could work in a service industry. And while it is far from being a trend, there are trends to watch where employee benefits are concerned.

In its most recent survey of employee benefits trends, the Society of Human Resource Management found an increase from 2014 to 2015 in wellness benefits, like employee fitness competitions.

The survey also showed an increase in companies offering personal investment and financial advice.

Also, the number of employers giving one-time financial incentives called “spot bonuses” to reward a job well-done are also up from 34 percent in 2011 to 45 percent in 2015.

Overall, 35 percent of the 463 randomly selected HR professionals who completed the survey said they offer more benefits this year than they did last year.

Pay attention

One final statistic from the survey: 88 percent of those questioned said their company reviews its benefits program at least once a year. So while you may not have the means or motivation to offer unlimited paid leave or huge spot bonuses, it’s good to keep an eye on trends in the area of benefits and re-evaluating what you are providing.

Updating your benefits program may make your company a more attractive place to work. And keeping an eye on what the big players like Microsoft and Netflix are offering may prevent you from being blindsided by an employee or job candidate asking for a perk you didn’t realize anyone else was even putting on the table.


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