Is it time to update your company’s annual leave policy?
It’s a new year, and that means new changes. Is it perhaps time to also change your company’s annual leave policy? Employee benefits trends are shifting towards creating a balance between work and life for employees and emphasizing productivity vs. time spent in the office. Does your company’s annual leave policy seem a bit old-fashioned compared to what’s currently offered on the market, and even by your direct competitors? If you feel like that’s the case, stay with us as employee benefits experts from Pacific Prime shed light on some annual leave options you might want to consider implementing in 2019.
Employee Benefits trends in 2019
While not directly connected to the annual leave topic, 2019 will see a definite rise in employee benefits, such as corporate health plans, not only for the workers, but their families as well, with an emphasis on preventive care, mental health support, and family-oriented offices and policies. Creating a successful and meaningful leave policy is more than just deciding on the number of days. Such policies should allow employees to de-stress, gain energy to remain productive at work, and give them time to deal with everyday life issues.
The workforce is shifting, and companies who want to stay competitive must offer more to top talent than an increase in salary. In fact, a 2015 Glassdoor survey shows that 4 out of 5 employees prefer having better or new employee benefits rather than a higher wage. Topping the list of such desired benefits were healthcare insurance, vacation/paid time off, paid sick days, and more. Leave policies are quite high on the list, so let’s look into them further.
Annual leave policies every employer should know about in 2019
If your company strictly follows local labor laws, and offers the minimum level of benefits required by local rules, you might be missing out on other leave policies that might just align perfectly with your company goals, culture, and employees. The emerging annual leave policies you should at least know about are as follows:
Paid Time Off
Instead of having separate policies for annual vacation, personal days, and sick leave, it’s all combined into one policy called Paid Time Off. Before, employees would take a sick day when they were ill, and a vacation day for holidays, or to arrange some other personal matters, or even to care for another member of their family, such as a sick child. That might create some inequalities in how employees were using their vacation or sick day allowances. Putting all of the mentioned paid time off benefits in one pool allows employees to manage their paid time off however they prefer.
Sabbatical leave is a type of policy that allows your employee to take an extended unpaid leave, ranging from one month to even up to a year, but having security that their job is there for them. Employees will opt for that option if they need extra time to focus on their studies, travel, learn new desired skills, or simply do anything they dream of. Such programs are usually available as a reward for long service, and treated by companies as part of their talent retention strategy.
Parental Paid Time Off
Companies are shifting towards either offering paid parental leave or extending statutory paid paternity and maternity leave, which can also be used when a couple is adopting a child. Such a policy gives employees the necessary time to adapt and develop a strong connection with a new addition to their family.
Paid Family Sick Time
Some companies take things a step further in devising their annual leave policies, allowing them to take paid days off to care for an ill family member. This will enable employees to come back to work and focus only on work performance, knowing that everything at home is taken care of.
Extended Bereavement Leave
Losing someone important to us is a truly stressful and hard experience, and as such employees should be offered time off to grieve, but also to arrange all necessary arrangements associated with a loved one’s passing. Depending on your location, most countries grant between one to a couple of days of bereavement leave.
Just as with parental time off, marriage leave is becoming more and more popular. Usually, companies grant one day for formalities, whereas others allow for extra paid days off for the honeymoon. Marriage is a happy, yet stressful event, and as such, having a few extra days off to get used to a new marital status would probably be appreciated.
Volunteer Day Off
What’s a better way to show your employees you care about what they care about than giving them a day so they can give back to their communities, or causes that are important to them?
Unlimited Annual Leave
While an unlimited annual leave policy might sound a bit contraventional, if enforced in the right company, it can bring very positive results, without staff taking advantage of it. In a company where the emphasis is on results, engaged and motivated employees would plan their holidays in a way so they can finish projects successfully first. However, in a company where leaders work long hours and barely take holidays themselves, such a policy might not be a good solution, as employees would not feel encouraged to use the perk anyway.
Structuring your company annual leave policy in 2019
There are a few other things to consider when you want to revise your current employee benefits package:
- Leave policy enforcement according to local law – Consider local labor laws, and make sure your employees take off the minimum days off.
- Carrying over unused annual leave at year’s end – Consider if you want to allow your employees to take remaining days off and to what extent?
- Cashing out unused leave days – Do your employees have an option to cash out on the days they didn’t use?
- Unpaid annual leave – Does your company approve of your employees taking more than their allotted annual leave each year?
How do you create a win-win situation when devising your annual leave policy? Besides legal requirements, should you offer better or the same annual leave policy as your competitors? Should your company devise a global program, or allow regional offices to take charge of their own leave programs? What type of annual leave policy is the most important/relevant to employees, company culture, and industry?
Annual leave policy is just one of many aspects of employee benefits, but should be taken into consideration just as much as corporate health insurance, wellness and employee assistance programs, and flexible work arrangements, among others.
Don’t know where to start? Pacific Prime is here to help
As you have seen above, deciding on a successful annual leave policy is a long process, with many variables. One way to approach the subject is to partner with an experienced employee benefits specialist such as Pacific Prime. Our approach in consulting with companies designing employee benefits consists of a few essential steps, including identifying your company’s needs, performing benchmark market reviews, reviewing existing employee benefits packages, and helping to devise, improve, and implement new ones.
Contact our advisers today to find out for yourself how Pacific Prime can help you with structuring employee benefits.